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<p class="toplink"><a id="top" href="../../../../index.htm" name="top">MIA</a> > <a href="../../../index.htm">Archive</a> > <a href="../../index.htm">Higgins</a></p>
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<h2>Jim Higgins</h2>
<h4>Trade unions</h4>
<h1>AUEW election</h1>
<h3>(November 1975)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From the <em>Spectator</em>, 29 Nov 1975, p.690.<br>
Published here with kind permission of the <strong>Spectator</strong>.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">Hats off for Mr Scanlon, two minutes silence for the blasted career of Mr Bob Wright, a little respect for the fallen, if you please. In the current round of elections in the Amalgamated Union of Engineering Workers, the members have cast their votes in a way that may change the political complexion of the union’s leading body, the executive council. The much publicised and execrated three-all split on the executive, which has permitted Mr Scanlon to exercise his casting vote on some very contentious questions, will be ended.</p>
<p>Before anybody starts celebrating the demise of the AUEW left wing and buying heavily in engineering company shares, they might like to pause and contemplate one or two facts. Just for starters, the three-all deadlock is a very recent phenomena. There are, in fact, seven seats on the executive council. The difficulty arose when the previous General Secretary, right-winger Jim Conway, was killed in the Paris air crash. His successor, John Boyd, another right-winger, had to vacate his Scottish division executive seat to take up the post of secretary. This left a vacancy and reduced “moderate” strength by one. The vacancy has now been filled by Mr Gavin Laird who last week defeated Jimmy Reid by a two to one majority. The latest line-up is really a reversion to the right-wing majority that has existed for years, with the very brief interlude I outline above. It is a chastening thought that the AUEW’s left-wing image was formed and hardened over a period when both the Executive and the policy-making National Committee were invariably under moderate control.</p>
<p>The simple, not to say simple-minded, calculations of too many commentators leaves out of account the complex factors of union politics. Like most other spheres of endeavour, our union hierarchs are often motivated by personal rivalry and antipathy as much as ideological differences. Mr Reg Birch, for example, a Maoist executive councilman, although very much a man of the left, is not overly fond of Mr Scanlon. This probably dates back to the time when Mr Birch was a leading member of the Communist Party. He was told by the CP bureaucrats not to run against Mr Scanlon, a Labour Party member, for the office of President. This instruction was ignored and eventually led to Birch’s expulsion from the party and a certain strain between the two gentlemen. Which may also explain why, on occasion, Mr Birch has voted in solidarity with Mr Boyd, rather than his natural, if more orthodox, left-wing colleagues. Indeed the voting record of the AUEW’s executive would show some very strange alignments. All of which points to the danger of attempting to import the standards of conventional parliamentary politics into analysis of the trade union movement. It can only be misleading and, in the case of the AUEW, destructive of serious analysis. Consider, on any single trade union question there are at least three answers. Because most leading trade unionists are first and foremost trade union patriots, they will divide in all sorts of ways depending on their own experience and estimation of the interests of the union. Even the allegedly disciplined battalions of the CP have found themselves on different sides on a number of occasions.</p>
<p>It would be a mistake for us to imagine that Mr John Boyd has a total aversion to strikes. Moderation is, after all, only a relative term. Mr Boyd has led strikes in his time and may well do so in the future. In the engineering industry, with its multiplicity of pay rates and payments systems, with its, generally, bad to intolerable working conditions, there are countless situations arising daily, not to say hourly, that can give rise to bitter disputes. Under such circumstances no AUEW official who wants to be re-elected can let the members even suspect that he is against strikes in principle.</p>
<p>If we can accept this unpalatable truth, then the future development of the union becomes far less clear-cut, much more uncertain. In truth, the future will depend on factors far outside the control of the AUEW electorate. Today the urgent threat of unemployment, short time and rationalisation are facts that bear heavily on rank and file engineering workers. Against this background of economic disaster, Mr Wilson has won a substantial ideological victory over the trade union left wing. As is proved by their voting patterns, AUEW members have come to the conclusion that a left-wing union leadership would involve them in a confrontation they cannot win. Just as well sit back and hope to get £6. The urgent question, however, and one to which the Government would dearly like the answer, is, how long will this quietism continue? Suppose that the economic recovery is too long delayed, suppose – not a large supposition this – that unemployment and inflation continue to rise. Suppose that the £6 limit gives way to a £3 limit. Then the tide of resentment might well start to run very powerfully.</p>
<p>In the AUEW the most influential group of members are the time-served, highly skilled men. If differentials are significantly eroded over time by flat rate increases there could be serious difficulties with this key section of workers. Difficulties that could snowball throughout the engineering industry. Once a wave of mass militancy of that sort occurs British capitalism would be in a very bad way indeed and all the legions of moderates in union head offices could do nothing to stop the rot.</p>
<p>That, of course, is an extreme projection and for the time being you may still sleep uneasily in your beds. The AUEW right wing are celebrating their famous victory, even Mr Boyd, himself a teetotaller, is no doubt blowing his Salvation Army tuba with increased vigour. Conversely, the left wing is much put down. Bob Wright, that pillar of the “broad left” caucus, finds himself without a job and very dim prospects. He could, as they say, “go back to the tools” but at his age and with his record that might prove difficult. He could run for lesser AUEW office, but for one who was Hugh Scanlon’s handpicked successor that would be quite a come-down. More likely he will take on a job in another union but it will not be the same.</p>
<p>In some ways the defeat of Bob Wright will be a loss for the union. He is an accomplished negotiator, in a union not over-endowed with such talent. His successful opponent Mr Terry Duffy, a previously, unknown assistant divisional organiser, will find his path rather difficult, with militant activists lying in ambush, unless he displays more form than his track record indicates so far.</p>
<p>Also suffering will be Hugh Scanlon; his tenure of office has not been crowned with unsullied success. He cannot boast a massive increase in his members’ living standards, as can Mr Joe Gormley. He cannot give evidence of far-reaching political influence, as can Jack Jones. His drive to build the union through amalgamations is faltering on the difficulty of achieving a joint rule book. The union is financially under par. And now, on top of all this, he is faced with a rejuvenated, right-wing, executive majority flushed with victory. All of which will add to the aggravation of life at his Peckham Road headquarters. Even before this last blow there were signs that Mr Scanlon was beginning to feel the strain. Of late he has left the projection of union policy to others, his appearance; in the public eye and on our television screens less frequent.</p>
<p>Still he has three years to go before he retires. That will cover a crucial time in the calendar of industrial relations. Mr Scanlon, contrary to premature reports, is not dead yet. To achieve and hold high office in the second biggest union in Britain requires a certain intestinal fortitude. One small example may give some insight into Hugh Scanlon’s character and possible future conduct. A while ago, consistent with his station in life, he purchased a weekend retreat atop a cliff on the South Coast. Not long after, this seaside “dacha” slid, uninsured, into the sea. Undeterred, our Hughie has now purchased another such residence at Broadstairs – guess where – on top of a cliff! Now there is determination for you.</p>
<p> </p>
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MIA > Archive > Higgins
Jim Higgins
Trade unions
AUEW election
(November 1975)
From the Spectator, 29 Nov 1975, p.690.
Published here with kind permission of the Spectator.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Hats off for Mr Scanlon, two minutes silence for the blasted career of Mr Bob Wright, a little respect for the fallen, if you please. In the current round of elections in the Amalgamated Union of Engineering Workers, the members have cast their votes in a way that may change the political complexion of the union’s leading body, the executive council. The much publicised and execrated three-all split on the executive, which has permitted Mr Scanlon to exercise his casting vote on some very contentious questions, will be ended.
Before anybody starts celebrating the demise of the AUEW left wing and buying heavily in engineering company shares, they might like to pause and contemplate one or two facts. Just for starters, the three-all deadlock is a very recent phenomena. There are, in fact, seven seats on the executive council. The difficulty arose when the previous General Secretary, right-winger Jim Conway, was killed in the Paris air crash. His successor, John Boyd, another right-winger, had to vacate his Scottish division executive seat to take up the post of secretary. This left a vacancy and reduced “moderate” strength by one. The vacancy has now been filled by Mr Gavin Laird who last week defeated Jimmy Reid by a two to one majority. The latest line-up is really a reversion to the right-wing majority that has existed for years, with the very brief interlude I outline above. It is a chastening thought that the AUEW’s left-wing image was formed and hardened over a period when both the Executive and the policy-making National Committee were invariably under moderate control.
The simple, not to say simple-minded, calculations of too many commentators leaves out of account the complex factors of union politics. Like most other spheres of endeavour, our union hierarchs are often motivated by personal rivalry and antipathy as much as ideological differences. Mr Reg Birch, for example, a Maoist executive councilman, although very much a man of the left, is not overly fond of Mr Scanlon. This probably dates back to the time when Mr Birch was a leading member of the Communist Party. He was told by the CP bureaucrats not to run against Mr Scanlon, a Labour Party member, for the office of President. This instruction was ignored and eventually led to Birch’s expulsion from the party and a certain strain between the two gentlemen. Which may also explain why, on occasion, Mr Birch has voted in solidarity with Mr Boyd, rather than his natural, if more orthodox, left-wing colleagues. Indeed the voting record of the AUEW’s executive would show some very strange alignments. All of which points to the danger of attempting to import the standards of conventional parliamentary politics into analysis of the trade union movement. It can only be misleading and, in the case of the AUEW, destructive of serious analysis. Consider, on any single trade union question there are at least three answers. Because most leading trade unionists are first and foremost trade union patriots, they will divide in all sorts of ways depending on their own experience and estimation of the interests of the union. Even the allegedly disciplined battalions of the CP have found themselves on different sides on a number of occasions.
It would be a mistake for us to imagine that Mr John Boyd has a total aversion to strikes. Moderation is, after all, only a relative term. Mr Boyd has led strikes in his time and may well do so in the future. In the engineering industry, with its multiplicity of pay rates and payments systems, with its, generally, bad to intolerable working conditions, there are countless situations arising daily, not to say hourly, that can give rise to bitter disputes. Under such circumstances no AUEW official who wants to be re-elected can let the members even suspect that he is against strikes in principle.
If we can accept this unpalatable truth, then the future development of the union becomes far less clear-cut, much more uncertain. In truth, the future will depend on factors far outside the control of the AUEW electorate. Today the urgent threat of unemployment, short time and rationalisation are facts that bear heavily on rank and file engineering workers. Against this background of economic disaster, Mr Wilson has won a substantial ideological victory over the trade union left wing. As is proved by their voting patterns, AUEW members have come to the conclusion that a left-wing union leadership would involve them in a confrontation they cannot win. Just as well sit back and hope to get £6. The urgent question, however, and one to which the Government would dearly like the answer, is, how long will this quietism continue? Suppose that the economic recovery is too long delayed, suppose – not a large supposition this – that unemployment and inflation continue to rise. Suppose that the £6 limit gives way to a £3 limit. Then the tide of resentment might well start to run very powerfully.
In the AUEW the most influential group of members are the time-served, highly skilled men. If differentials are significantly eroded over time by flat rate increases there could be serious difficulties with this key section of workers. Difficulties that could snowball throughout the engineering industry. Once a wave of mass militancy of that sort occurs British capitalism would be in a very bad way indeed and all the legions of moderates in union head offices could do nothing to stop the rot.
That, of course, is an extreme projection and for the time being you may still sleep uneasily in your beds. The AUEW right wing are celebrating their famous victory, even Mr Boyd, himself a teetotaller, is no doubt blowing his Salvation Army tuba with increased vigour. Conversely, the left wing is much put down. Bob Wright, that pillar of the “broad left” caucus, finds himself without a job and very dim prospects. He could, as they say, “go back to the tools” but at his age and with his record that might prove difficult. He could run for lesser AUEW office, but for one who was Hugh Scanlon’s handpicked successor that would be quite a come-down. More likely he will take on a job in another union but it will not be the same.
In some ways the defeat of Bob Wright will be a loss for the union. He is an accomplished negotiator, in a union not over-endowed with such talent. His successful opponent Mr Terry Duffy, a previously, unknown assistant divisional organiser, will find his path rather difficult, with militant activists lying in ambush, unless he displays more form than his track record indicates so far.
Also suffering will be Hugh Scanlon; his tenure of office has not been crowned with unsullied success. He cannot boast a massive increase in his members’ living standards, as can Mr Joe Gormley. He cannot give evidence of far-reaching political influence, as can Jack Jones. His drive to build the union through amalgamations is faltering on the difficulty of achieving a joint rule book. The union is financially under par. And now, on top of all this, he is faced with a rejuvenated, right-wing, executive majority flushed with victory. All of which will add to the aggravation of life at his Peckham Road headquarters. Even before this last blow there were signs that Mr Scanlon was beginning to feel the strain. Of late he has left the projection of union policy to others, his appearance; in the public eye and on our television screens less frequent.
Still he has three years to go before he retires. That will cover a crucial time in the calendar of industrial relations. Mr Scanlon, contrary to premature reports, is not dead yet. To achieve and hold high office in the second biggest union in Britain requires a certain intestinal fortitude. One small example may give some insight into Hugh Scanlon’s character and possible future conduct. A while ago, consistent with his station in life, he purchased a weekend retreat atop a cliff on the South Coast. Not long after, this seaside “dacha” slid, uninsured, into the sea. Undeterred, our Hughie has now purchased another such residence at Broadstairs – guess where – on top of a cliff! Now there is determination for you.
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Last updated on 2.11.2003
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<p class="toplink"><a id="top" href="../../../../index.htm" name="top">MIA</a> > <a href="../../../index.htm">Archive</a> > <a href="../../index.htm">Higgins</a></p>
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<h2>Jim Higgins</h2>
<h4>Trade unions</h4>
<h1>Clive Jenkins – Tomorrow the world</h1>
<h3>(November 1975)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From the <strong>Spectator</strong>, 8 November 1975, p.596.<br>
Published here with kind permission of the <strong>Spectator</strong>.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">The great trade union growth area of the last fifteen years has been among the white collar workers. In weighty sociological articles, the phenomenon has been analysed and reasons adduced. Big industry has become more impersonal: those with white collars have become numbers in the book just like their blue collar colleagues; differentials between the two types of work have narrowed, with manual workers earning more than those enjoying staff status; aggressive trade unionism has benefited those with dirt under their finger nails and the lesson has not been lost on those with a pen behind their ears.</p>
<p>No union saw this white collar revolution with greater clarity than the Association of Scientific, Technical and Managerial Staff (ASTMS). No trade union leader has calculated so carefully or played his cards so cleverly as Clive Jenkins, ASTMS General Secretary. The central core of the union was the old Association of Supervisory Staff, Executives and Technicians (ASSET). In 1945 ASSET had 11,000 members, a mixture of engineering foremen and a few managerial types with a bit of a conscience. It really was of no account, dismissed, slightingly, by other unions as ‘the foremen’s union’. In 1946 ASSET made one of its wiser decisions in appointing Mr Jenkins (at the time a twenty-year-old manager of a tin-plate works) as a Birmingham Divisional Organiser. Within a year Clive had moved on to ASSET headquarters and by the time he was thirty had assumed the office of Deputy General Secretary. Four years later, in 1961, he was General Secretary. With only 23,000 members he was, nevertheless, one of the highest paid trade union officials. Whatever his salary, and it is a closely guarded secret, the union has no reason to regret the cost.</p>
<p>From this comparatively lowly peak Mr Jenkins surveyed the world, decided it was good and that ASSET should get its significant share of the action. With astute calculation he developed his public image, his own private image writ large, that has made him a natural choice for chat show producers and earned the envious enmity of his trade union peers. Brash, abrasive, witty, outrageous, on occasion cruelly cutting, and all cast within a torrent of literate eloquence. In the same way as ladies will block the high street to catch a glimpse of Bruce Forsyth opening a boutique, so will managers, technicians and other white collar elements turn up to hear Mr Jenkins extolling the virtues of collective bargaining. They may come to jeer but they invariably stay to cheer and take out a union card.</p>
<p>Within seven years of taking over as General Secretary the membership was raised to 50,000 and the time for the next breakthrough had arrived. The Association of Scientific Workers, with 20,000 members, was assimilated together with its General Secretary, Mr Dutton, and half a dozen Nobel Prize winners. The AScW was just the first of a succession of smaller unions merged into the ever burgeoning ASTMS: the Medical Practitioners Union, Midland Bank staff, a number of insurance staff associations, and the development of bargaining units for administrative personnel in ICI and other large combines. Today ASTMS has 350,000 members and is growing at the rate of 50,000 each year. Because the field has been so badly organised in the past the perspective is one of almost uninterrupted growth for the foreseeable future. By usual trade union standards subscriptions are low, only 85p per month, but they still yield a healthy head office balance of £2,750,000 per annum.</p>
<p>Now that is real money and ASTMS does not have a cash flow problem. The money is invested in ASTMS offices up and down the country, which provides publicity, saves money, and is a useful hedge against inflation. The union’s headquarters, a somewhat garish item, whose orange exterior lightens the gloom of Jamestown Road, Camden Town, cost £650,000 and is now worth £1,500,000. With luck like that, being clever must be counted a bonus.</p>
<p>But success of this order is not achieved without some cost. There have been jurisdictional disputes with other, less successful, white collar unions. The clerks’ union, APEX, have had their jurisdictional disputes with ASTMS. Most notably and recently the TUC’s instruction to APEX to hand over 3,000 insurance workers to Mr Jenkins’s union has been successfully challenged in the courts. The draughtsmen’s union, the Bank employees have all had their little difficulties with ASTMS in the past. Each year the TUC report contains long and detailed reports of the accusations of ‘poaching’ against ASTMS.</p>
<p>If the number of such cases has declined in recent years that may be because the Bank employees’ union has been out of the TUC due to their registering under Mr Heath’s Industrial Relations Act. This year NUBE has been readmitted to the TUC, despite ASTMS’s strenuous opposition. The outlook is one of less than fraternal amity in this field. If APEX and the NUBE fear that Mr Jenkins wishes to swallow their organisations, that is certainly not a perspective articulated by ASTMS. At present there is enough slack among the unorganised without the need for head-on confrontation with established unions. Time alone will tell the ultimate ASTMS strategy.</p>
<p>Perhaps, however, time will induce, as it has for so many others, a mellowing in Mr Jenkins. Despite the fact that he has a large framed photograph of Ramsay MacDonald outside his sumptuous office, to act as a ghastly warning, there are signs that, as he enters his fiftieth year, he is less concerned to project the well tried public persona. For years he was kept off the General Council of the TUC, by those less talented but with command of the necessary block votes. In 1974 the size and influence of ASTMS could no longer be ignored, the establishment capitulated and Mr Jenkins took his place among the elect. Even now, though, those who take some malicious pleasure in these things, have arranged that Mr Jenkins’s General Council seat should be next to that of Mr Reg Birch, the AUEW Maoist.</p>
<p>For all the smarty boots image, Mr Jenkins is in reality a trade union leader in the pragmatic mould of the British labour movement. Despite his five year membership of the Communist Party in the late 1940s, he is not an ideologue, He joined on a wave of revulsion from Ernie Bevan’s foreign policy and left when the CP bureaucrats tried to tell him how to write a Fabian pamphlet. Like the leaders of the most craft-bound society of artisans he is a union patriot. The membership he hoped to recruit was less easily defined, more difficult to organise and unused to the procedures and ethos of trade unionism. Having got the members it has become necessary to inculcate a level of trade union consciousness, to politicise them.</p>
<p>That ASTMS and Mr Jenkins have been successful is a matter of record, measured in members recruited and cash in the bank. The future, with inevitable problems, is comparatively bright for ASTMS. No recognisable group of white collar workers are beneath Mr Jenkins’s interest. It occurs to me that one grossly underpaid group of workers, suffering mediaeval conditions of service are Church of England parsons. If their collars are reversed they are still white and Mr Jenkins would still have them. It would be a pleasurable thing to see Clive Jenkins in action against the Church Commissioners. He would undoubtedly have his research department diligently searching the Scriptures for divine support.</p>
<p> </p>
<p class="link"><a href="#top">Top of the page</a></p>
<hr size="1" noshade="noshade">
<p class="updat">Last updated on <!-- WebWriter AutoDato -->2.11.2003<!-- WW --></p>
</body> |
MIA > Archive > Higgins
Jim Higgins
Trade unions
Clive Jenkins – Tomorrow the world
(November 1975)
From the Spectator, 8 November 1975, p.596.
Published here with kind permission of the Spectator.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
The great trade union growth area of the last fifteen years has been among the white collar workers. In weighty sociological articles, the phenomenon has been analysed and reasons adduced. Big industry has become more impersonal: those with white collars have become numbers in the book just like their blue collar colleagues; differentials between the two types of work have narrowed, with manual workers earning more than those enjoying staff status; aggressive trade unionism has benefited those with dirt under their finger nails and the lesson has not been lost on those with a pen behind their ears.
No union saw this white collar revolution with greater clarity than the Association of Scientific, Technical and Managerial Staff (ASTMS). No trade union leader has calculated so carefully or played his cards so cleverly as Clive Jenkins, ASTMS General Secretary. The central core of the union was the old Association of Supervisory Staff, Executives and Technicians (ASSET). In 1945 ASSET had 11,000 members, a mixture of engineering foremen and a few managerial types with a bit of a conscience. It really was of no account, dismissed, slightingly, by other unions as ‘the foremen’s union’. In 1946 ASSET made one of its wiser decisions in appointing Mr Jenkins (at the time a twenty-year-old manager of a tin-plate works) as a Birmingham Divisional Organiser. Within a year Clive had moved on to ASSET headquarters and by the time he was thirty had assumed the office of Deputy General Secretary. Four years later, in 1961, he was General Secretary. With only 23,000 members he was, nevertheless, one of the highest paid trade union officials. Whatever his salary, and it is a closely guarded secret, the union has no reason to regret the cost.
From this comparatively lowly peak Mr Jenkins surveyed the world, decided it was good and that ASSET should get its significant share of the action. With astute calculation he developed his public image, his own private image writ large, that has made him a natural choice for chat show producers and earned the envious enmity of his trade union peers. Brash, abrasive, witty, outrageous, on occasion cruelly cutting, and all cast within a torrent of literate eloquence. In the same way as ladies will block the high street to catch a glimpse of Bruce Forsyth opening a boutique, so will managers, technicians and other white collar elements turn up to hear Mr Jenkins extolling the virtues of collective bargaining. They may come to jeer but they invariably stay to cheer and take out a union card.
Within seven years of taking over as General Secretary the membership was raised to 50,000 and the time for the next breakthrough had arrived. The Association of Scientific Workers, with 20,000 members, was assimilated together with its General Secretary, Mr Dutton, and half a dozen Nobel Prize winners. The AScW was just the first of a succession of smaller unions merged into the ever burgeoning ASTMS: the Medical Practitioners Union, Midland Bank staff, a number of insurance staff associations, and the development of bargaining units for administrative personnel in ICI and other large combines. Today ASTMS has 350,000 members and is growing at the rate of 50,000 each year. Because the field has been so badly organised in the past the perspective is one of almost uninterrupted growth for the foreseeable future. By usual trade union standards subscriptions are low, only 85p per month, but they still yield a healthy head office balance of £2,750,000 per annum.
Now that is real money and ASTMS does not have a cash flow problem. The money is invested in ASTMS offices up and down the country, which provides publicity, saves money, and is a useful hedge against inflation. The union’s headquarters, a somewhat garish item, whose orange exterior lightens the gloom of Jamestown Road, Camden Town, cost £650,000 and is now worth £1,500,000. With luck like that, being clever must be counted a bonus.
But success of this order is not achieved without some cost. There have been jurisdictional disputes with other, less successful, white collar unions. The clerks’ union, APEX, have had their jurisdictional disputes with ASTMS. Most notably and recently the TUC’s instruction to APEX to hand over 3,000 insurance workers to Mr Jenkins’s union has been successfully challenged in the courts. The draughtsmen’s union, the Bank employees have all had their little difficulties with ASTMS in the past. Each year the TUC report contains long and detailed reports of the accusations of ‘poaching’ against ASTMS.
If the number of such cases has declined in recent years that may be because the Bank employees’ union has been out of the TUC due to their registering under Mr Heath’s Industrial Relations Act. This year NUBE has been readmitted to the TUC, despite ASTMS’s strenuous opposition. The outlook is one of less than fraternal amity in this field. If APEX and the NUBE fear that Mr Jenkins wishes to swallow their organisations, that is certainly not a perspective articulated by ASTMS. At present there is enough slack among the unorganised without the need for head-on confrontation with established unions. Time alone will tell the ultimate ASTMS strategy.
Perhaps, however, time will induce, as it has for so many others, a mellowing in Mr Jenkins. Despite the fact that he has a large framed photograph of Ramsay MacDonald outside his sumptuous office, to act as a ghastly warning, there are signs that, as he enters his fiftieth year, he is less concerned to project the well tried public persona. For years he was kept off the General Council of the TUC, by those less talented but with command of the necessary block votes. In 1974 the size and influence of ASTMS could no longer be ignored, the establishment capitulated and Mr Jenkins took his place among the elect. Even now, though, those who take some malicious pleasure in these things, have arranged that Mr Jenkins’s General Council seat should be next to that of Mr Reg Birch, the AUEW Maoist.
For all the smarty boots image, Mr Jenkins is in reality a trade union leader in the pragmatic mould of the British labour movement. Despite his five year membership of the Communist Party in the late 1940s, he is not an ideologue, He joined on a wave of revulsion from Ernie Bevan’s foreign policy and left when the CP bureaucrats tried to tell him how to write a Fabian pamphlet. Like the leaders of the most craft-bound society of artisans he is a union patriot. The membership he hoped to recruit was less easily defined, more difficult to organise and unused to the procedures and ethos of trade unionism. Having got the members it has become necessary to inculcate a level of trade union consciousness, to politicise them.
That ASTMS and Mr Jenkins have been successful is a matter of record, measured in members recruited and cash in the bank. The future, with inevitable problems, is comparatively bright for ASTMS. No recognisable group of white collar workers are beneath Mr Jenkins’s interest. It occurs to me that one grossly underpaid group of workers, suffering mediaeval conditions of service are Church of England parsons. If their collars are reversed they are still white and Mr Jenkins would still have them. It would be a pleasurable thing to see Clive Jenkins in action against the Church Commissioners. He would undoubtedly have his research department diligently searching the Scriptures for divine support.
Top of the page
Last updated on 2.11.2003
|
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<p class="toplink"><a id="top" href="../../../../index.htm" name="top">MIA</a> > <a href="../../../index.htm">Archive</a> > <a href="../../index.htm">Higgins</a></p>
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<h2>Jim Higgins</h2>
<h1>The Minority Movement</h1>
<h3>(November 1970)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Socialism</strong> (1st series), <a href="../../../../history/etol/newspape/isj/index2.html#isj045" target="new">No.45</a>, November/December 1970, pp.12-18.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
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<p class="fst">Revolutionary Marxism is about the working class. The beginning, middle and end of analysis is the working-class. Revolutionary theory that does not connect at some stage with the real movement of the workers is a meaningless abstraction, useful only to warm the craniums of the devotees. This simple notion, a commonplace in the movement, is more frequently ignored than diligently pursued.</p>
<p>The essence of sectarianism is encompassed in this definition. Sects, as opposed to sectarianism, have, of course, a rode to play. For long periods of capitalist stability and working-class decline the maintenance of the marxist tradition and the future worker’s party is secured by ‘sects’. Marx in his letter to Bolte makes the point clear: ‘Sects are justified (historically) so long as the working-class is not yet ripe for an independent historical movement’ <a id="f1" href="#n1" name="f1">[1]</a></p>
<p>None of this, however, is to deny the need for a party. It is, nevertheless, to put the question into perspective. Too frequently do we find the most vociferous worshippers at the shrines of Lenin and Trotsky doing the gravest injustice to the spirit and intention of their writing. For Lenin even less than for Trotsky, was the party the end product for which they fought. The party was a tool, albeit an indispensable tool, by means of which the working-class could carry through the revolution. For the blinkered ‘Bolsheviks’ who see <strong>What is to be Done</strong>, abstracted from time and place as the last word, there is no redemption from sectarian futility and isolation. The Lenin of 1903 is also the Lenin of <strong>State and Revolution</strong>, <strong>The Worker’s and Peasant’s Inspection</strong> and much else in similar vein.</p>
<p>Historically every serious revolutionary tendency has attempted to carry through the job of welding together revolutionary theory with the worker’s movement. At no time has the task been easy, at some times it has been impossible.</p>
<p>All of this is still unexceptional, and it is possible having said it to relapse, virtuously and with easy conscience into the small change of group politics. Knowledge is never dangerous to anyone, including the ruling-class, unless it is translated into action. The dilemma still remains: how does a small group of committed revolutionaries, with limited resources and personnel, make serious contact with significant groups of workers. The difficulties are legion. Lack of contact, non-working-class social composition, age differences, lack of experience. All of these things plus the womb-like warmth of inbred politics, where the sweeping generalisation has only to convince other members of the elect and is not subject to the cold complexities of the real world. Overriding all other difficulties in importance is the existence of reformist traditions and institutions encompassing the trade union bureaucracy, the Labour Party and, by extension, the Communist Party.</p>
<p>Despite all these problems the attempt to cut through and circumvent the obstacles has been made. The lack of success, in the past, has not only been due to sectarianism: as often as not the objective conditions made more than passing progress impossible.</p>
<p>For long years the Trotskyist movement suffered from an inability to approach the class in any but the most oblique fashion – in the early 1930’s as a minuscule left opposition in the CP, subsequently in the ILP, the Socialist League and the Labour Party. Of these organisations only the CP, and that illusory, saw itself as providing a complete industrial and political answer to working-class problems; the ILP and the Socialist League were already operating, consciously or otherwise, at one remove from the working-class.</p>
<p>Only during the special conditions of the second world war were the Trotskyists able to maintain a precarious independent existence. After the Russian entry into the war the CP became a super partisan of the Labour-Conservative coalition, completely abdicating its role in industry and conniving at the erosion of working conditions in the interests of the ‘great patriotic war’. In these circumstances the Revolutionary Communist Party (RCP) and its predecessor the Worker’s International League (WIL) were presented for the first time with opportunities for autonomous agitation among industrial workers.</p>
<p>The Trotskyists were active in, and virtually controlled, the Militant Worker’s League an organisation mainly based in the important Royal Ordnance Factories, but which acquired affiliation from some shop stewards committees, a few district committees and a number of individual militants. However the high revolutionary hopes of the war years, epitomised in the WIL conference document <strong>Preparing For Power</strong> were rapidly evaporated in the harsh realities of the post-war world. Virtually the entire industrial membership and periphery of the RCP disappeared. In 1949 the RCP went into voluntary liquidation, its hopes wrecked on the twin rocks of a revived social democracy and a strengthened Stalinism, a possibility not only catered for in its perspective, but also one specifically denied in the works of Trotsky.</p>
<p>The Militant Worker’s Federation is poorly documented, even in the pages of the RCP press, and apart from some obscure internal bulletins only the fallible recollection of a few participants is available. In the case of the Minority Movement (MM) we are a little more fortunate and Roderick Martin’s recent book <a id="f2" href="#n2" name="f2">[2]</a> is an important addition to our knowledge of the way revolutionaries in the 1920’s attempted to bridge the gap between the revolutionary party and the organised working-class.</p>
<p>An understanding of the Minority Movement and its early comparative success is impossible without setting the movement within its own historical context. Both the CP members involved and their non-CP co-workers were, in the main, people with an experience of rank-and-file movements going back to the pre-1914 period. Without these contacts even the limited success of me MM would have been impossible.</p>
<p>Rank-and-file movements do not exist because revolutionaries will them; as Brian Pearce says,</p>
<p class="quoteb">‘The source of rank-and-file movements is the conflict between the struggle of the working class for better conditions and a new social order, and the increasing reconciliation between the leaders of the trade unions and the capitalist class, their growing integration into the upper reaches of bourgeois society.’ <a id="f3" href="#n3" name="f3">[3]</a><br>
</p>
<h4>Background to the Minority Movement</h4>
<p class="fst">The growth in the 1860’s of financially stable trade unions with an assured continuity allied to the extension of the franchise meant that trade union leaders, as Engels observed, ‘... had overnight become important people’. They were visited by MPs, by Lords and other well-born rabble, and sympathetic inquiry was suddenly made into the wishes and needs of the working-class. <a id="f4" href="#n4" name="f4">[4]</a> In short order the trade union bureaucracy was accepted as a viable estate of the realm. Resting on British industrial supremacy and the fruits of empire, the trade union leadership swiftly acquired the dress, demeanour and life-style of the employers and politicians they mixed with more frequently than their members. Mass production of clothing has today somewhat obscured the external differences (Burton’s natty gents suiting has, to the untutored eye, much the same appearance as the product of Savile Row) but fundamentally the phenomenon is the same. Indeed with the growth and expansion of the system it becomes possible to suborn wider and wider layers of the worker’s representatives. In America, the closed shop, the check off, maximum seniority and overtime for committee men, with management paying committee men’s wages, gives rise to a privileged stratum within the workshop itself. For the payment of a few more dollars the management acquires another supervisor to police the agreement and the workers acquire another gendarme in the process of production. <a id="f5" href="#n5" name="f5">[5]</a></p>
<p>The period before the first world war saw the natural consequences of the quietism and collaboration of the trade union bureaucracy. Reform movements sprang up in industry after industry. James Connolly introduced the ideas of the American SLP on politics and industrial unionism into Britain. Tom Mann, strongly influenced by French syndicalism, together with Guy Bowman, formed the Industrial Syndicalist Education League in 1910. The year before, a strike at Ruskin College resulted in the Plebs League-Labour College which gave added impetus to the propaganda for rank and file control and revolutionary change. <strong>The Miner’s Next Step</strong> was the product of graduates from the Labour College.</p>
<p>Enterprises of this sort, multiplied throughout the country, influenced a whole generation of militants. Apart from Mann and Connolly, men like A.J. Cook, Richard Coppock, A.A. Purcell, Ben Tillet and Noah Ablett were well to the fore. A further layer of young workers was also coming into local prominence: Arthur McManus, Tom Bell, Gallagher and others who were later to become the leadership of the CPGB.</p>
<p>Trade union membership grew by leaps and bounds and a series of strikes broke out, frequently unofficially inspired, that bore a reluctant leadership on. In 1908 man-days lost through strikes quadrupled. Between 1910 and 1913 strikes never fell below 10 million days each year. <a id="f6" href="#n6" name="f6">[6]</a></p>
<p>The notion of the industrial union was a powerful weapon in the propaganda of revolutionaries. In the period it had profound transitional significance. The simple idea of maximum solidarity in the face of the employers was immediately relevant to workers faced by rising prices, the incapacity of parliamentary reformism and the trade union bureaucracy. At the same time k emphasised the realities of class difference and gave me possibility of working-class politics. An integral part of the agitation for the industrial union was the notion of rank-and-file control from the workshop floor. The transformation of industrial capitalism to the socialist society was to be ensured by present working-class organisation. The experience of the Soviets in the 1905 Russian Revolution was one influence acting on the practical agitation of the industrial unionists.</p>
<p>Practically all of the massive amalgamated unions of today derive in some measure from this period of pre-1914 agitation. That the problems remain is a measure of the complexities of the situation undreamed of by early industrial unionists.</p>
<p>The impact of the war in 1914 stilled for a time the upsurge of industrial militancy with a wave of chauvinism. As in 1939-45, the trade unions virtually abandoned their traditional defensive and bargaining role, in aid of the war effort. A vacuum existed that could be filled by the residual activists of the pre-war period. Unofficial committees of militants and shop-stewards acquired a new accession of strength and, despite a deal of harassment and persecution, were able to organise, at rank-and-file level, thousands of workers in sporadic but important struggles. These battles inevitably spilled over into political agitation. The government prescription on normal trade union activity made me simplest defensive struggle of necessity political. The predilections of many militants aided this tendency and strikes and demonstrations were successfully fought against rents, conscription and dilution, Not all were successful. Poor communications made organisation difficult. As with the IWW in America, successful struggles, whatever their national significance, were fought locally and the problem of spreading disputes at the right time was often insurmountable. Deportations to other towns and imprisonment, under the Defence of the Realm Act, of the unofficial leadership added to the difficulties. In the nature of the movement, with its strong syndicalist tendency, the need for a disciplined centralised leadership was specifically excluded. Yet working-class militants engaged full-time at their trade are, no matter how their imagination may soar, physically confined to a limited geographical location.</p>
<p>The development of the shop stewards’ movement in the first world war set the essential form of shop-floor representation that even in the worst periods of reaction has saved the movement from the worst excesses of the trade union experiences abroad. Today it represents a considerable rank-and-file organisation into the trade union machine.</p>
<p>The Russian Revolution of 1917 provided a living proof of the viability of the revolutionary’s propaganda. Worker’s control through Soviets was a living reality. Enthusiasm for the revolution extended far beyond the limited circle of groups that, in 1920 coalesced to form the Communist Party. Aneurin Bevan gave a – perhaps – romanticised but essentially truthful account of the feelings engendered by the revolution in a speech to the 1951 Labour Party conference:</p>
<p class="quoteb">‘... when the Russian revolution occurred. I remember the miners, when they heard that the Czarist tyranny had been overthrown, rushing to meet one another in the streets with tears streaming down their cheeks, shaking hands and saying “At last it has happened”.’ <a id="f7" href="#n7" name="f7">[7]</a></p>
<p class="fst">At the Leeds Workers and Soldiers Convention of June 1917 some 1,300 delegates attended from Labour parties, trades councils, ILP branches, trade unions and other Labour organisations. The strength of the sentiment that called the conference into being compelled such dyed-in-the-wool reformists as Ramsey Macdonald and Philip Snowden to participate and sit on the Central Committee (a fact that may have something to do with its ineffectiveness).</p>
<p>As early as January 1918 the Russian Congress of Trade Unions called for a new trade union international to replace the discredited Amsterdam International. In 1920 at the second congress of the Communist International the famous 21 conditions, (for affiliation to the CI) were passed, point 10 of which called for: ‘Uncompromising opposition to the yellow international of Amsterdam’. The decisions were taken against the background of a massive strike wave in Western Europe and revolutions in Hungary and Bavaria. In Britain the strike wave was also accompanied by the Hands Off Russia Campaign which led to the formation of a joint Labour Party-TUC National Council of Action to organise ‘the whole industrial strength of the workers against the war’. Twelve months of such experiences, following the founding conference, convinced the Second Comintern Congress that the time was ripe for the formation of a revolutionary trade union international. In September 1920, after some fairly heated debate about the need for a revolutionary party and the degree of independence allowed to the sections, a Provisional International Council of Trade and Industrial Unions was set up with the task of organising a conference in July 1921.</p>
<p>The newly formed Red International of Labour Unions produced a <strong>Programme of Action</strong> <a id="f8" href="#n8" name="f8">[8]</a> which laid down in some detail the strategy and tactics to be followed by ‘Red Trade Unions’. All trade union action was to be seen as leading on to mass actions – demonstrations, street actions, factory occupations, armed insurrection. Industrial unionism was to be pursued, by a programme of amalgamation, through local, district and national trade union machinery. The basis of organisation of the red trade union was no be the democratically elected workshop committee to replace the redundant geographically based branch. Members of the national RILU sections were to form factory cells and press for the implementation of such a policy.</p>
<p>Trade Union strategy was cast within an offensive framework – unemployed workers to receive full pay from the employers; closures and short time to be fought, special worker’s commissions to examine the books, factory occupations to continue production. Arguments from the national interest and against foreign competition had to be ignored, the only interest of the red trade unions being to maintain and increase working class power. Alliances were to be made across industries (e.g. Rails, Transport and Mines) to prevent divide-and-rule tactics. All strikes had to be carefully prepared with particular emphasis on defence and offence squads to beat blacklegging and ‘White Guard and fascist elements’. Workers’ control of production, and the organic unity of the CP and the revolutionary trade unions was to be aimed at.</p>
<p>Now this is not a bad programme at all but in the conditions of 1921 it had one serious drawback. The programme was specifically tailored to a period of mass ‘radicalisation and pre-revolutionary ferment. Unfortunately the strike wave was beginning to wane.</p>
<p>In Britain the post-war boom was beginning to falter and the employers used the opportunity to reassert their control over industry. In 1921 the mine owners proposed to eliminate the wages pool that had operated during and after the war, and to institute local rates based on local profitability. Ill-concealed in this proposal were wage cuts, as much as 42s per week in some cases. <a id="f9" href="#n1" name="f9">[9]</a> The miners at this time were the largest and most powerful union in the country. The mine-owners’ attack was seen, correctly, as an attack on organised labour as a whole. The miners invoked the triple alliance with the Rail unions and the Transport union; all the miners were out, including the safety men, in the most complete shutdown up to that time. On April 12th the transport and railway workers were due to strike in sympathy, but at a worried conference the triple alliance leaders were able to persuade the miners to return the safety men and to postpone the strike to Friday, April 15th.</p>
<p>A statement by the mineworker’s secretary (Hodges) to an audience, largely composed of Tory MP’s, which spoke of conciliation on the miners’ claim was rejected by the Miner’s Federation Executive. On this pretext the Railwaymen and Transport union leaders reneged on the triple alliance an act which caused many miners to describe it as the ‘cripple alliance’. <a id="f9a" href="#n9a" name="f9a">[9a]</a></p>
<p>The miners fought on for 13 weeks until funds ran out. As a result of this defeat wages were cut by some 34 per cent. <a id="f10" href="#n10" name="f10">[10]</a> The defeat of ‘Black Friday’ set the whole trade union movement back. Between 1921 and 1923 affiliated membership of the TUG dropped by 2,000,000 rather more than the increase since 1918. <a id="f11" href="#n11" name="f11">[11]</a></p>
<p>It is against this background that the British section of RILU was formed. There was no attempt to form new unions and, when the South Wales Miners Federation was threatened with expulsion from the TUG after declaring for affiliation to the Red International, there was little point in pressing individual unions to affiliate, although they were to return to the question of international trade union solidarity with a considerable difference, after the formation of the Anglo Russian Trade Union Committee.</p>
<p>The revolutionary optimism of the <strong>Programme of Action</strong> was transformed into a ‘stop the retreat’ campaign. The drain of TU membership was combatted and the leadership urged to fight back. Minority movements, so-called because a trade union leader complained about a ‘minority of troublemakers’ <a id="f12" href="#n12" name="f12">[12]</a>, appeared in a number of industries, particularly mining.</p>
<p>The prestige of the Russian revolution and the Russian leadership, together with the shared experience and tradition of many CP and non-CP militants ensured a considerable community of interest and aspiration. Despite the objections of Tanner and others to the organisational form and political content of the RILU, the Shop Stewards and Worker’s Committee Movement (SS & WCM) were content to leave the main direction and control of the rank-and-file movement to the Communist Party. At a meeting of the National Administrative Committee of the SS & WCM, in 1920, it was decided:</p>
<p class="quoteb">‘... The NAC of the SS & WCM recognise the necessity for acting in close contact with the Communist Party ... It will stress the need of its active members joining the Communist Party ... The SS & WCM and the Communist Party should devise some convenient arrangement to ensure the perfect harmony of the two organisations.’ <a id="f13" href="#n13" name="f13">[13]</a></p>
<p class="fst">At a joint meeting between the NAC and the CP early in 1921 the need for a national unofficial industrial movement under the hegemony of the CP was agreed.</p>
<p>Agreement on shared perspectives and common organisational objectives between communist and non-communist activists was important, but the action that flowed from these agreements was even more difficult. The miners’ defeat was closely followed by an attack on all working class living standards; by the end of 1921 some 6,000,000 workers had suffered a decrease of 8s per week. In 1922 the employers felt able to take on the powerful AEU in a lock-out over control of overtime and managerial functions. From March to June the AEU funds were milked dry and the engineers beaten. In 1923 the dockers were engaged and defeated. In a period of general working-class retreat the hard facts of the class war were all too nakedly apparent but the way to fight back was not nearly so clear.</p>
<p>At the Fourth Congress of the CI, J.T. Murphy replied to criticism from Zinoviev, that the British Party had little influence in the workshops and in the formation of factory and workshop committees, by saying that</p>
<p class="quoteb">‘in England we have had a powerful shop stewards movement. But it can and only does exist given objective conditions. These necessary conditions at the moment in England do not exist. How can you build factory organisations in empty and depleted workshops’. <a id="f14" href="#n14" name="f14">[14]</a></p>
<p class="fst">Despite these difficult objective conditions the British section of RILU were urged to set up a national organisation. Gallagher was put in charge of the enterprise and preparations were in hand by 1924 for a conference for a National Minority Movement (MM). Although the formation of a national movement was slow, the intervening period was not without success. In particular the Miner’s MM increased its influence considerably, especially in the Scottish and South Wales coalfields and in early 1924 the MM were influential, if not decisive, in obtaining the election of A.J. Cook (a prominent and active supporter of the MM) to the secretaryship of the Miners’ Federation. Less spectacular, but significant, advances were also made in Rails and Engineering. The party already had a fairly large influence in some smaller trade unions, like the Furniture Workers and the Tailors and Garment Workers.</p>
<p>The conference, that was to unite the various industrial sections into a National Majority Movement, was held on August the 23rd and 24th, 1924. Some 270 delegates representing 200,000 workers attended. <a id="f15" href="#n15" name="f15">[15]</a> If the figures as to workers represented may be a little suspect, the conference was nevertheless a considerable achievement on the part of the organisers. In a way it was the high point of the Minority Movement, for even though in the future this was to be able to claim far greater and wider representation, the original intention – to unite the rank-and-file industrial movement with revolutionary communist politics in the interests of working-class socialism in Britain – was to come under considerable strain almost immediately. The independent movement of British workers was very quickly subordinated to the needs of the growing Russian bureaucracy and their foreign policy interests.<br>
</p>
<h4>Revolutionary Trade Unionism</h4>
<p class="fst">At the founding conference of the National Minority Movement Tom Mann was elected chairman and Harry Pollitt secretary. Pollitt explained the objectives as follows:</p>
<p class="quoteb">‘We are not out to disrupt the unions, or to encourage any new unions. Our sole object is to unite the workers in the factories by the formation of factory committees; to work for the formation of one union for each industry; to strengthen the local Trades Councils so that they shall be representative of every phase of the working-class movement, with its roots firmly embedded in the factories of each locality. We stand for the formation of a real General Council that shall have the power to direct, unite and co-ordinate all struggles and activities of the trade unions, and so make is possible to end the present chaos and go forward in a united attack in order to secure, not only our immediate demands, but win complete workers control of industry’. <a id="f16" href="#n16" name="f16">[16]</a></p>
<p class="fst">Allied to this general programme were the bread-and-butter demands; a £1 a week wage increase; a minimum wage of £4; the 44-hour week and no overtime. As a leavening to the demand for more power to the General Council, they also added demands for the direct affiliation to the TUC of the Unemployed Workers’ Movement and the Trades Councils.</p>
<p>The whole programme was set within the context of the primary aim of the Minority Movement:</p>
<p class="quoteb">‘... to organize the working masses of Great Britain for the overthrow of capitalism, ... the establishment of the Socialist Commonwealth; to carry on a wide agitation for the principles of ‘the revolutionary class struggle ... and against the present tendency towards social peace and class collaboration ...’ <a id="f17" href="#n17" name="f17">[17]</a></p>
<p class="fst">The introduction of straight economic demands connected the immediate pre-occupations of workers with the strengthened organisational form that might give them substance. The organisational form also provided a unified working-class army that could be directed to revolutionary action. The factory committee structure, directly represented on local trades councils, which in their turn were directly affiliated to the TUC, displayed, in embryonic form, the idea of the Soviet. The affiliation to the TUC of the Unemployed Movement also had some considerable advantages, not only because the NUWCM (National Unemployed Worker’s Committee Movement) was firmly under CP control, but also because the organised unemployed, despite their immediate lack of industrial power, displayed a satisfyingly militant spirit, particularly so during the Engineer’s lock-out.</p>
<p>Of more far-reaching significance, in terms of its debilitating effect on the later development of the movement, was the inclusion of the demand for greater power for the TUC. The demand had been heard before 1924 but in different circumstances. The defeat of Black Friday, with individual unions breaking solemnly concluded agreements to help others, was seen as the result of a lack of unified command. The industrial unionist tradition, in the final analysis, saw the working-class as whole and indivisible. The logic of a union built from the workshop to cover a complete industry, regardless of trade, cannot stop short at the single industry. The top of the pyramid had to be a body that represented the entire industrial working class, regardless of trade or industry. The interests of die class would have to override all sectional interests. In America, in vastly different conditions, revolutionaries built their ‘one big union’ the IWW (Industrial Workers of the World). Apart from a brief and disastrous, flirtation with independent revolutionary unions before the 1914-18 war, British Revolutionaries had, wisely, set their face against dual unionism. An attempt to set the Minority Movement in place of the TUC would not only be dual unionism with a vengeance, but also sheer lunacy in the light of the relation of forces.</p>
<p>The saving grace, in this situation was seen in the growth of a rank-and-file movement that would influence and direct the TUC from the grass roots. In the event, the attempt to influence the TUC led to a neglect of the grass roots that was to make impossible any chances that might have existed.</p>
<p>The factor which changed the direction of the National MM almost at its inception, emanated from Moscow. In October 1923 the German Revolution had gone down to defeat. This event proved to the Russians and the Comintern that the period of revolutionary offensive was at an end. The Russian revolution could no longer expect its salvation from imminent revolutions in Western Europe. The Russians would have to seek allies and security from imperialist attack elsewhere. One field in which this might be secured was in a rapprochement with the IFTU (International Federation of Trade Unions – Amsterdam) of which the largest and most influential constituent was the TUC.</p>
<p>At the Third Congress of die Profintern in 1924 Tomsky gave voice to the new conciliatory line: ‘We have no desire to break up the Amsterdam International. What we want is to create a strong, vigorous International’. It is interesting to contrast this statement with the ‘uncompromising opposition to the yellow International of Amsterdam’ of the 21 conditions. In the same speech Tomsky indicated the route the Profintern had chosen to the heart of the TUC General Council, when he spoke in laudatory terms of Purcell, a ‘left’ member of the General Council: ‘Beyond question a man upon whom we can rely in an emergency is Purcell, a true-hearted champion of the workers’. In retrospect it all sounds like a rather sick joke.</p>
<p>At the Hull TUC in September of that year Tomsky again spoke for unity in a very conciliatory spirit. Following the Congress a delegation from the General Council (Purcell, Bramley, Tillet, Turner and Findlay) attended the Sixth Congress of the Russian Trade Unions, and in early 1925 the Anglo-Russian Committee was set up. In 1924 the Labour Government had, despite Liberal protests, signed an Anglo-Russian trade treaty and guaranteed a loan to the Russians. A strong pro-Soviet tide was running not only through the TUC but also through the organised workers. The economic situation was improving and the coal industry made large coal exports. One reason for this was the French occupation of the Ruhr following the failure of the Germans to meet their reparations bill, which effectively handicapped a prime competitor of British coal. Economic improvement gave an opportunity for workers to regain some of the losses of 1922-23. But the recovery was short lived. The Dawes plan stabilised the mark, enabled reparations to be paid and helped the recovery of Germany as an international competitor.</p>
<p>The advent of the first Labour Government in 1924 shifted, to a degree, the political centre of gravity of the General Council. Right-wingers like J.H. Thomas, Bondfield and Gosling were taken into MacDonald’s government. As a result Swales, Hicks, Purcell and other ‘lefts’ gave the TUC a verbal militancy that corresponded to the more genuine swell in the unions.</p>
<p>In the period following the founding of the national movement, the MM made some advances. Affiliations from some small national unions and from numbers of district committees were secured. Between 1924 and early 1926 affiliation rose from 200,000 to 957,000. <a id="f18" href="#n18" name="f18">[18]</a> Allowing for some exaggeration, duplication and, perhaps, triplication, this still represents a sizeable increase in influence. In mining, always the largest supporter of the MM, 200 MM branches were formed and very large delegations sent to the Movements’ conferences. Slightly smaller representation was forthcoming from Engineering (156 delegates at the August 1926 conference) and Transport (NUR and TGWU some 76 delegates). <a id="f19" href="#n19" name="f19">[19]</a> However, apart from these main areas of strength, and a few small unions based primarily on the East End of London, the MM made little impact. Even in these industries the support was in specific geographical locations – South Wales, London, Scotland, the NW areas – interestingly enough, that corresponded closely to the successes of the pre-1914 rank-and-file movement and to the later SS & WCM.</p>
<p>In this period the NMM not only acquired greater membership, but also engaged activity in the struggles in mining, railways and engineering. MM policy was discussed in a number of the unions and parts adopted in some. The South Wales Miners Federation adopted the MM programme in full, including TUC affiliation to the RILU. But already the pattern was beginning to take shape. Greater and greater emphasis was given to the importance of international trade union unity and the part that the Anglo-Russian Committee could play in this venture. MM delegates to the TUC were urged to act as a bloc. At the 1925 Trades Union Congress the MM were able to get a resolution committing the General Council to fight, through the IFTU for Russian affiliation. At the same Congress the Tailors and Garment Workers moved and Pollitt, for the Boilermakers, seconded a resolution which called for the trade unions to organise for the overthrow of capitalism ‘in conjunction with the party of the workers’, opposition to ‘capitalist schemes of co-partnership’ and strong workshop organisation. After a card vote, the resolution was carried by 2,456,000 votes to 1,218,000 votes.</p>
<p>The 1925 Congress represented a high point in the relationship between the MM movement and the TUC ‘lefts’. Alonzo Swales, in his Presidential address had said that</p>
<p class="quoteb">‘a militant and progressive policy, consistently and steadily pursued is die only policy that will consolidate and inspire our rank-and-file ... there cannot be any community of interest between the working-class and the capitalist-class’. He went on to urge the Congress to give the General Council ‘full powers to create the necessary machinery to combat every movement of our opponents.’ <a id="f20" href="#n20" name="f20">[20]</a></p>
<p class="fst">The background to these largely verbal pyrotechnics is to be found in the events of July 31st, 1925 ‘Red Friday’.</p>
<p>The effects of the Dawes plan, and the Baldwin administrations decision to return to the gold standard, produced, as Keynes succinctly put it, ‘an atmosphere favourable to the reduction of wages’. Export prices fell rapidly, particularly for coal – suffering especially from the Dawes scheme of payment in kind with Ruhr coal. The mine-owners proposed a return to the wage structure of 1921 and an increase of one hour in the working day. The actual effect of this cut is best expressed in Symons’ book <strong>The General Strike</strong>:</p>
<p class="quoteb">‘... the proposed wage cuts were between 10 per cent and 25 per cent of the wages earned and these wages vary between £2 and £4 a week.’ <a id="f21" href="#n21" name="f21">[21]</a></p>
<p class="fst">On top of this, of course, it would take an extra hour a day to earn the decreased wages. The miners’ leaders, A.J. Cook and Herbert Smith adamantly refused any attempt to compromise. Herbert Smith, a taciturn Yorkshireman, seems to have restricted his contributions to the discussion to the simple, yet telling phrase ‘nowt doin’, on one occasion while cleaning his false teeth on his handkerchief.</p>
<p>The triple alliance had not survived Black Friday and, although a new ‘Industrial Alliance’ was in train it had not made much progress. The TUG was the only organisation capable of bringing aid to the miners. The TGWU agreed to call a strike in solidarity, and the General Council put a complete embargo on the movement of coal from July 31st, the day the employer’s notices were to come into effect. The government, whatever the wishes of the coal-owners, felt compelled to enter the debate. At a meeting with the mine-workers the Prime Minister, Baldwin refused to agree to subsidise the mines. In a prophetic statement he indicated that the miners were merely the first of many workers to pay for the country’s difficulties: ‘All the workers in the country have got to take a reduction in wages.’ <a id="f22" href="#n22" name="f22">[22]</a> Only hours before the July 31st deadline the government caved in and agreed to pay a subsidy to the industry until May 1st, 1926. The subsidy, estimated to cost £10m, in fact cost £23m <a id="f23" href="#n23" name="f23">[23]</a>, but, whatever the subsidy cost the government, it certainly bought them nine months in which to prepare. The lack of preparation displayed by the TUC and the MM were to cost the working-class far more than £23 million, which they repaid many times over in lower wages and worsened conditions. They also lost for years the possibility of revolutionary change.</p>
<p>The Scarborough (1925) TUC that reflected, in words, the working-class elan induced by Red Friday made little or no attempt to prepare the movement for the decisive struggle that all agreed had merely been postponed for nine months. It was also significant that, apart from the speeches of Swales and A.J. Cook, no left-wing member of the General Council spoke in any of the major debates. The right-wingers were not so shy. Bevin, Thomas and Clynes all spoke against the idea of turning the TUC from a federation to a directing centre of the working-class. Clynes went so far as to declare,</p>
<p class="quoteb">‘I am not in fear of the capitalist class. The only class I fear is our own.’</p>
<p class="fst">In this Clynes merely reflected the general attitude of the Labour Party right-wing. Ramsey MacDonald called Red Friday ‘a victory for the very forces that sane, well-considered, thoroughly well-examined Socialism feels to be probably its greatest enemy’. J.H. Thomas said ‘the subsidy is wrong and will prove a disaster to the country’ and Hodges (General Secretary of the Miners’ Federation before he entered Parliament in 1924) thought it ‘a sure step in the direction of national bankruptcy’. In the order of social upheaval a General Strike is the next best thing to an armed insurrection and inevitably the very suggestion of such an event raises directly the question of power. The logic of May 1926 draws one ineluctably to this conclusion. Capitalism had clearly and manifestly failed; at one trade union conference after another the straight experience of the members gave witness to this truth. Resolution after resolution expressed determination, in words, to carry through the socialist revolution. Realistic analysis was not in short supply; there was no premium on the discussion of radical solutions. The missing factor was any sort of direct class preparation.</p>
<p>The right-wing trade union leadership were opposed to the strike, seeing it only as a never to be played bargaining counter to obtain concessions from the Government. The centrist elements on the General Council saw the strike as a continuation of normal trade union pressure that might well, in some undefined way, enhance the social influence of the workers and could, at some other time, give rise to social change. Neither of these groups, for their different reasons, made any serious preparations.</p>
<p>The Communist Party and the other militants of the Minority Movement were quite clear as to the revolutionary implications of the General Strike. It was the event which accorded with their whole history and traditions, as industrial unionists, and also the likely route that a mature working-class with a developed trade union movement would follow.</p>
<p>The basic problems that vitiated their efforts were two-fold. The first and least important, was the small size of the CP (5,000 members in the CP, 5,000 in the YCL <a id="f24" href="#n24" name="f24">[24]</a>), and the psychological inhibitions that this lack of numbers induced. Second, and more important, was the Russian influenced emphasis on the General Council as the vehicle on which the party should ride.</p>
<p>The first problem could have been overcome. The CP, at that time, had far wider working-class periphery than they have ever enjoyed since. In the Minority Movement they had a far reaching influence in at least three major unions and a wide following in trades councils and trade union branches. It is in just such circumstances as this that a small organisation that prepares to operate independently can become a mass party. There is no guarantee, of course, that had the party had Lenin at the helm and Trotsky organising the operation they would have succeeded. What is clear, however, is that there was no chance of success in the policy and procedure they adopted up to and during the strike.</p>
<p>The General Council were instructed to extend the Industrial Alliance, to create Councils of Action, to strengthen workshop committees, to form workers’ defence squads and to prepare for the maintenance of essential services. The General Council could not, would not and did not do any of these things.</p>
<p>Despite the clear warning of Government intentions in the arrest and sentencing of 12 leading members of the party (Inkpin, Pollitt, Rust, Gallacher, Hannington, McManus, Bell, Murphy, Campbell, Page Arnot, Wintringham and Cant) in 1925, its precautions and preparations were rudimentary. During the strike over 1,000 party members were arrested. Although leading members were sent out to the provinces, communication was almost impossible because the necessary provisions had not been made. Decisions taken by the Political Bureau during the strike were not transmitted to the branches for four days.</p>
<p>The slogans of the party were defensive slogans – ‘Not a penny off the pay, not a second on the day’ – cast within the framework of defence of the miners. As the report to the Eighth Party Congress confessed in October 1926,</p>
<p class="quoteb">‘Once the masses were on the streets the business of Central Committee was to extend these slogans at the same time malting them aggressive in character.’ <a id="f25" href="#n25" name="f25">[25]</a></p>
<p class="fst">In their manifesto, <strong>The Political Meaning of the General Strike</strong>, published during the strike, the main emphasis was on the miners’ demands, nationalisation and the replacement of the Tory government with a Labour government. Even when the CP considered raising demands for groups of workers other than the miners they decided to operate through the appropriate unions. <a id="f26" href="#n26" name="f26">[26]</a></p>
<p>The story of the General Strike is too well known to rehearse it here. It suffices to say that whatever opportunities the situation offered to the revolutionary movement were not grasped. The working-class paid and paid heavily for the debilitating influence of the Comintern. For the Minority Movement and the Communist Party the first real chance not taken was the last chance to take anything at all. The Minority Movement lived on until the early 1930’s, the Communist Party is still with us bereft of the certainties of outright Stalinism yet incapable of drawing any lessons from its failures. Its main function as an organisation is to stand as an obstacle in the way of a genuine revolutionary organisation.</p>
<p>The post-strike history of the Minority Movement stands in no way as an object lesson for revolutionaries. It is unlikely that any future revolutionary organisation would perform the grotesque antics that drove the movement into oblivion. The whole ‘third period’ insanity of the ‘Class against Class’ policy and the dual unionism of the early 1930’s cannot be explained except through the abject subordination of the CPGB to the dictates of the Stalinist bureaucracy.</p>
<p>The tragedy of the Minority Movement and the infant Communist Party is not, however, in its failure; for every movement has its failures. The tragedy is in the loss, from meaningful class politics, of a whole generation of working-class militants. The early CP contained thousands of workers, dedicated to revolutionary socialism and with a wealth of rank-and-file trade union experience. That men like Pollitt, Mann, Murphy, Gallacher, Bell and hundreds of others spent their talented lives in the sterile service of Stalinism, through all the betrayals, small and large, that were entailed, says a great deal for the conviction that originally brought them to the socialist movement.</p>
<p>The Minority Movement is no more and the conditions and traditions and the men that gave rise to it, in its specific form, no longer exist. Attempts to set up its latter day equivalent are an exercise either in historical nostalgia or attempts to repeat the tragedy of the 1920’s in the farce of 1970.</p>
<p>Nowhere in Britain today does the revolutionary movement have the working-class base or the working-class periphery to set in motion an organisation that can operate as a coherent opposition within the unions. The immediate task is not to build meaningless paper organisations but to expand our influence and membership among the class. The job is more exacting and less exciting than the search for surrogates at any number of points on the third world compass. Nor is it as exhilirating as the construction of an exclusive super bolshevik party, with all of 400 members, that, in its own estimation, teeters on the brink of power. (How long can one teeter without actually falling on one’s face?) Nor is it as easy as the illusory soft option of snuggling up to the ‘left wing’ of the trade union leadership and the parliamentary Labour Party. It is much more difficult than all of these things, but ultimately it is the only way to success.</p>
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<h3>Notes</h3>
<p class="note"><a id="n1" href="#f1" name="n1">1.</a> Marx-Engels, <strong>Selected Correspondence</strong>, p.326.</p>
<p class="note"><a id="n2" href="#f2" name="n2">2.</a> <strong>Communism and the British Trade Unions, 1924-33</strong>, Oxford University Press, 50s.</p>
<p class="note"><a id="n3" href="#f3" name="n3">3.</a> <a href="../../../../history/etol/writers/pearce/1959/04/rankandfile.html" target="new"><em>Some Past Rank-and-File Movements</em></a>, <strong>Labour Review</strong>, April-May 1959.</p>
<p class="note"><a id="n4" href="#f4" name="n4">4.</a> Quoted in Pearce, <strong>op. cit.</strong></p>
<p class="note"><a id="n5" href="#f5" name="n5">5.</a> See Martin Glaberman, <a href="../../../glaberman/1965/xx/uswc.htm" target="new"><em>Be His Wages High or Low</em></a>, <strong>IS 21</strong>.</p>
<p class="note"><a id="n6" href="#f6" name="n6">6.</a> Walter Kendall, <strong>The Revolutionary Movement in Britain</strong>, p.25.</p>
<p class="note"><a id="n7" href="#f7" name="n7">7.</a> Quoted in Coates and Topham, <strong>Workers’ Control</strong>, p.95.</p>
<p class="note"><a id="n8" href="#f8" name="n8">8.</a> <em>Thesis of Third Congress CI and RILU</em>, quoted in Coates and Topham, <strong>op. cit.</strong>, p.85.</p>
<p class="note"><a id="n9" href="#f9" name="n9">9.</a> Allen Hutt, <strong>Post-War History of the British Working Class</strong>, p.59.</p>
<p class="note"><a id="n9a" href="#f9a" name="n9a">9a.</a> <strong>ibid.</strong>, p.61.</p>
<p class="note"><a id="n10" href="#f10" name="n10">10.</a> R. Fox, <strong>Class Struggle in Britain</strong>, p.79.</p>
<p class="note"><a id="n11" href="#f11" name="n11">11.</a> Hutt, <strong>op. cit.</strong>, p.63.</p>
<p class="note"><a id="n12" href="#f12" name="n12">12.</a> Pearce, <strong>op. cit.</strong></p>
<p class="note"><a id="n13" href="#f13" name="n13">13.</a> <strong>NAC Report</strong>, September 1920, quoted in Martin, <strong>op. cit.</strong>, p.18.</p>
<p class="note"><a id="n14" href="#f14" name="n14">14.</a> Quoted in Coates and Topham, <strong>op. cit.</strong>, p.134.</p>
<p class="note"><a id="n15" href="#f15" name="n15">15.</a> <strong>Report of the First NMM Conference</strong>, R. Martin, <strong>op. cit.</strong>, p.36.</p>
<p class="note"><a id="n16" href="#f16" name="n16">16.</a> Hutt, <strong>op. cit.</strong>, p.93</p>
<p class="note"><a id="n17" href="#f17" name="n17">17.</a> <strong>Report of the NMM Conference</strong>; 1924, quoted in Martin, <strong>op. cit.</strong>, p.37.</p>
<p class="note"><a id="n18" href="#f18" name="n18">18.</a> <strong>NMM Reports</strong>, quoted in Martin, <strong>op. cit.</strong>, p.57.</p>
<p class="note"><a id="n19" href="#f19" name="n19">19.</a> <strong>ibid.</strong></p>
<p class="note"><a id="n20" href="#f20" name="n20">20.</a> <strong>TUC Report</strong>, 1925.</p>
<p class="note"><a id="n21" href="#f21" name="n21">21.</a> Julian Symons, <strong>The General Strike</strong>, p.9.</p>
<p class="note"><a id="n22" href="#f22" name="n22">22.</a> <strong>ibid.</strong>, p.14.</p>
<p class="note"><a id="n23" href="#f23" name="n23">23.</a> <strong>ibid.</strong>, p.16.</p>
<p class="note"><a id="n24" href="#f24" name="n24">24.</a> Figures from K. Newton, <strong>The Sociology of British Communism</strong>.</p>
<p class="note"><a id="n25" href="#f25" name="n25">25.</a> Martin, <strong>op. cit.</strong>, p.73.</p>
<p class="note"><a id="n26" href="#f26" name="n26">26.</a> <strong>ibid.</strong></p>
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MIA > Archive > Higgins
Jim Higgins
The Minority Movement
(November 1970)
From International Socialism (1st series), No.45, November/December 1970, pp.12-18.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Revolutionary Marxism is about the working class. The beginning, middle and end of analysis is the working-class. Revolutionary theory that does not connect at some stage with the real movement of the workers is a meaningless abstraction, useful only to warm the craniums of the devotees. This simple notion, a commonplace in the movement, is more frequently ignored than diligently pursued.
The essence of sectarianism is encompassed in this definition. Sects, as opposed to sectarianism, have, of course, a rode to play. For long periods of capitalist stability and working-class decline the maintenance of the marxist tradition and the future worker’s party is secured by ‘sects’. Marx in his letter to Bolte makes the point clear: ‘Sects are justified (historically) so long as the working-class is not yet ripe for an independent historical movement’ [1]
None of this, however, is to deny the need for a party. It is, nevertheless, to put the question into perspective. Too frequently do we find the most vociferous worshippers at the shrines of Lenin and Trotsky doing the gravest injustice to the spirit and intention of their writing. For Lenin even less than for Trotsky, was the party the end product for which they fought. The party was a tool, albeit an indispensable tool, by means of which the working-class could carry through the revolution. For the blinkered ‘Bolsheviks’ who see What is to be Done, abstracted from time and place as the last word, there is no redemption from sectarian futility and isolation. The Lenin of 1903 is also the Lenin of State and Revolution, The Worker’s and Peasant’s Inspection and much else in similar vein.
Historically every serious revolutionary tendency has attempted to carry through the job of welding together revolutionary theory with the worker’s movement. At no time has the task been easy, at some times it has been impossible.
All of this is still unexceptional, and it is possible having said it to relapse, virtuously and with easy conscience into the small change of group politics. Knowledge is never dangerous to anyone, including the ruling-class, unless it is translated into action. The dilemma still remains: how does a small group of committed revolutionaries, with limited resources and personnel, make serious contact with significant groups of workers. The difficulties are legion. Lack of contact, non-working-class social composition, age differences, lack of experience. All of these things plus the womb-like warmth of inbred politics, where the sweeping generalisation has only to convince other members of the elect and is not subject to the cold complexities of the real world. Overriding all other difficulties in importance is the existence of reformist traditions and institutions encompassing the trade union bureaucracy, the Labour Party and, by extension, the Communist Party.
Despite all these problems the attempt to cut through and circumvent the obstacles has been made. The lack of success, in the past, has not only been due to sectarianism: as often as not the objective conditions made more than passing progress impossible.
For long years the Trotskyist movement suffered from an inability to approach the class in any but the most oblique fashion – in the early 1930’s as a minuscule left opposition in the CP, subsequently in the ILP, the Socialist League and the Labour Party. Of these organisations only the CP, and that illusory, saw itself as providing a complete industrial and political answer to working-class problems; the ILP and the Socialist League were already operating, consciously or otherwise, at one remove from the working-class.
Only during the special conditions of the second world war were the Trotskyists able to maintain a precarious independent existence. After the Russian entry into the war the CP became a super partisan of the Labour-Conservative coalition, completely abdicating its role in industry and conniving at the erosion of working conditions in the interests of the ‘great patriotic war’. In these circumstances the Revolutionary Communist Party (RCP) and its predecessor the Worker’s International League (WIL) were presented for the first time with opportunities for autonomous agitation among industrial workers.
The Trotskyists were active in, and virtually controlled, the Militant Worker’s League an organisation mainly based in the important Royal Ordnance Factories, but which acquired affiliation from some shop stewards committees, a few district committees and a number of individual militants. However the high revolutionary hopes of the war years, epitomised in the WIL conference document Preparing For Power were rapidly evaporated in the harsh realities of the post-war world. Virtually the entire industrial membership and periphery of the RCP disappeared. In 1949 the RCP went into voluntary liquidation, its hopes wrecked on the twin rocks of a revived social democracy and a strengthened Stalinism, a possibility not only catered for in its perspective, but also one specifically denied in the works of Trotsky.
The Militant Worker’s Federation is poorly documented, even in the pages of the RCP press, and apart from some obscure internal bulletins only the fallible recollection of a few participants is available. In the case of the Minority Movement (MM) we are a little more fortunate and Roderick Martin’s recent book [2] is an important addition to our knowledge of the way revolutionaries in the 1920’s attempted to bridge the gap between the revolutionary party and the organised working-class.
An understanding of the Minority Movement and its early comparative success is impossible without setting the movement within its own historical context. Both the CP members involved and their non-CP co-workers were, in the main, people with an experience of rank-and-file movements going back to the pre-1914 period. Without these contacts even the limited success of me MM would have been impossible.
Rank-and-file movements do not exist because revolutionaries will them; as Brian Pearce says,
‘The source of rank-and-file movements is the conflict between the struggle of the working class for better conditions and a new social order, and the increasing reconciliation between the leaders of the trade unions and the capitalist class, their growing integration into the upper reaches of bourgeois society.’ [3]
Background to the Minority Movement
The growth in the 1860’s of financially stable trade unions with an assured continuity allied to the extension of the franchise meant that trade union leaders, as Engels observed, ‘... had overnight become important people’. They were visited by MPs, by Lords and other well-born rabble, and sympathetic inquiry was suddenly made into the wishes and needs of the working-class. [4] In short order the trade union bureaucracy was accepted as a viable estate of the realm. Resting on British industrial supremacy and the fruits of empire, the trade union leadership swiftly acquired the dress, demeanour and life-style of the employers and politicians they mixed with more frequently than their members. Mass production of clothing has today somewhat obscured the external differences (Burton’s natty gents suiting has, to the untutored eye, much the same appearance as the product of Savile Row) but fundamentally the phenomenon is the same. Indeed with the growth and expansion of the system it becomes possible to suborn wider and wider layers of the worker’s representatives. In America, the closed shop, the check off, maximum seniority and overtime for committee men, with management paying committee men’s wages, gives rise to a privileged stratum within the workshop itself. For the payment of a few more dollars the management acquires another supervisor to police the agreement and the workers acquire another gendarme in the process of production. [5]
The period before the first world war saw the natural consequences of the quietism and collaboration of the trade union bureaucracy. Reform movements sprang up in industry after industry. James Connolly introduced the ideas of the American SLP on politics and industrial unionism into Britain. Tom Mann, strongly influenced by French syndicalism, together with Guy Bowman, formed the Industrial Syndicalist Education League in 1910. The year before, a strike at Ruskin College resulted in the Plebs League-Labour College which gave added impetus to the propaganda for rank and file control and revolutionary change. The Miner’s Next Step was the product of graduates from the Labour College.
Enterprises of this sort, multiplied throughout the country, influenced a whole generation of militants. Apart from Mann and Connolly, men like A.J. Cook, Richard Coppock, A.A. Purcell, Ben Tillet and Noah Ablett were well to the fore. A further layer of young workers was also coming into local prominence: Arthur McManus, Tom Bell, Gallagher and others who were later to become the leadership of the CPGB.
Trade union membership grew by leaps and bounds and a series of strikes broke out, frequently unofficially inspired, that bore a reluctant leadership on. In 1908 man-days lost through strikes quadrupled. Between 1910 and 1913 strikes never fell below 10 million days each year. [6]
The notion of the industrial union was a powerful weapon in the propaganda of revolutionaries. In the period it had profound transitional significance. The simple idea of maximum solidarity in the face of the employers was immediately relevant to workers faced by rising prices, the incapacity of parliamentary reformism and the trade union bureaucracy. At the same time k emphasised the realities of class difference and gave me possibility of working-class politics. An integral part of the agitation for the industrial union was the notion of rank-and-file control from the workshop floor. The transformation of industrial capitalism to the socialist society was to be ensured by present working-class organisation. The experience of the Soviets in the 1905 Russian Revolution was one influence acting on the practical agitation of the industrial unionists.
Practically all of the massive amalgamated unions of today derive in some measure from this period of pre-1914 agitation. That the problems remain is a measure of the complexities of the situation undreamed of by early industrial unionists.
The impact of the war in 1914 stilled for a time the upsurge of industrial militancy with a wave of chauvinism. As in 1939-45, the trade unions virtually abandoned their traditional defensive and bargaining role, in aid of the war effort. A vacuum existed that could be filled by the residual activists of the pre-war period. Unofficial committees of militants and shop-stewards acquired a new accession of strength and, despite a deal of harassment and persecution, were able to organise, at rank-and-file level, thousands of workers in sporadic but important struggles. These battles inevitably spilled over into political agitation. The government prescription on normal trade union activity made me simplest defensive struggle of necessity political. The predilections of many militants aided this tendency and strikes and demonstrations were successfully fought against rents, conscription and dilution, Not all were successful. Poor communications made organisation difficult. As with the IWW in America, successful struggles, whatever their national significance, were fought locally and the problem of spreading disputes at the right time was often insurmountable. Deportations to other towns and imprisonment, under the Defence of the Realm Act, of the unofficial leadership added to the difficulties. In the nature of the movement, with its strong syndicalist tendency, the need for a disciplined centralised leadership was specifically excluded. Yet working-class militants engaged full-time at their trade are, no matter how their imagination may soar, physically confined to a limited geographical location.
The development of the shop stewards’ movement in the first world war set the essential form of shop-floor representation that even in the worst periods of reaction has saved the movement from the worst excesses of the trade union experiences abroad. Today it represents a considerable rank-and-file organisation into the trade union machine.
The Russian Revolution of 1917 provided a living proof of the viability of the revolutionary’s propaganda. Worker’s control through Soviets was a living reality. Enthusiasm for the revolution extended far beyond the limited circle of groups that, in 1920 coalesced to form the Communist Party. Aneurin Bevan gave a – perhaps – romanticised but essentially truthful account of the feelings engendered by the revolution in a speech to the 1951 Labour Party conference:
‘... when the Russian revolution occurred. I remember the miners, when they heard that the Czarist tyranny had been overthrown, rushing to meet one another in the streets with tears streaming down their cheeks, shaking hands and saying “At last it has happened”.’ [7]
At the Leeds Workers and Soldiers Convention of June 1917 some 1,300 delegates attended from Labour parties, trades councils, ILP branches, trade unions and other Labour organisations. The strength of the sentiment that called the conference into being compelled such dyed-in-the-wool reformists as Ramsey Macdonald and Philip Snowden to participate and sit on the Central Committee (a fact that may have something to do with its ineffectiveness).
As early as January 1918 the Russian Congress of Trade Unions called for a new trade union international to replace the discredited Amsterdam International. In 1920 at the second congress of the Communist International the famous 21 conditions, (for affiliation to the CI) were passed, point 10 of which called for: ‘Uncompromising opposition to the yellow international of Amsterdam’. The decisions were taken against the background of a massive strike wave in Western Europe and revolutions in Hungary and Bavaria. In Britain the strike wave was also accompanied by the Hands Off Russia Campaign which led to the formation of a joint Labour Party-TUC National Council of Action to organise ‘the whole industrial strength of the workers against the war’. Twelve months of such experiences, following the founding conference, convinced the Second Comintern Congress that the time was ripe for the formation of a revolutionary trade union international. In September 1920, after some fairly heated debate about the need for a revolutionary party and the degree of independence allowed to the sections, a Provisional International Council of Trade and Industrial Unions was set up with the task of organising a conference in July 1921.
The newly formed Red International of Labour Unions produced a Programme of Action [8] which laid down in some detail the strategy and tactics to be followed by ‘Red Trade Unions’. All trade union action was to be seen as leading on to mass actions – demonstrations, street actions, factory occupations, armed insurrection. Industrial unionism was to be pursued, by a programme of amalgamation, through local, district and national trade union machinery. The basis of organisation of the red trade union was no be the democratically elected workshop committee to replace the redundant geographically based branch. Members of the national RILU sections were to form factory cells and press for the implementation of such a policy.
Trade Union strategy was cast within an offensive framework – unemployed workers to receive full pay from the employers; closures and short time to be fought, special worker’s commissions to examine the books, factory occupations to continue production. Arguments from the national interest and against foreign competition had to be ignored, the only interest of the red trade unions being to maintain and increase working class power. Alliances were to be made across industries (e.g. Rails, Transport and Mines) to prevent divide-and-rule tactics. All strikes had to be carefully prepared with particular emphasis on defence and offence squads to beat blacklegging and ‘White Guard and fascist elements’. Workers’ control of production, and the organic unity of the CP and the revolutionary trade unions was to be aimed at.
Now this is not a bad programme at all but in the conditions of 1921 it had one serious drawback. The programme was specifically tailored to a period of mass ‘radicalisation and pre-revolutionary ferment. Unfortunately the strike wave was beginning to wane.
In Britain the post-war boom was beginning to falter and the employers used the opportunity to reassert their control over industry. In 1921 the mine owners proposed to eliminate the wages pool that had operated during and after the war, and to institute local rates based on local profitability. Ill-concealed in this proposal were wage cuts, as much as 42s per week in some cases. [9] The miners at this time were the largest and most powerful union in the country. The mine-owners’ attack was seen, correctly, as an attack on organised labour as a whole. The miners invoked the triple alliance with the Rail unions and the Transport union; all the miners were out, including the safety men, in the most complete shutdown up to that time. On April 12th the transport and railway workers were due to strike in sympathy, but at a worried conference the triple alliance leaders were able to persuade the miners to return the safety men and to postpone the strike to Friday, April 15th.
A statement by the mineworker’s secretary (Hodges) to an audience, largely composed of Tory MP’s, which spoke of conciliation on the miners’ claim was rejected by the Miner’s Federation Executive. On this pretext the Railwaymen and Transport union leaders reneged on the triple alliance an act which caused many miners to describe it as the ‘cripple alliance’. [9a]
The miners fought on for 13 weeks until funds ran out. As a result of this defeat wages were cut by some 34 per cent. [10] The defeat of ‘Black Friday’ set the whole trade union movement back. Between 1921 and 1923 affiliated membership of the TUG dropped by 2,000,000 rather more than the increase since 1918. [11]
It is against this background that the British section of RILU was formed. There was no attempt to form new unions and, when the South Wales Miners Federation was threatened with expulsion from the TUG after declaring for affiliation to the Red International, there was little point in pressing individual unions to affiliate, although they were to return to the question of international trade union solidarity with a considerable difference, after the formation of the Anglo Russian Trade Union Committee.
The revolutionary optimism of the Programme of Action was transformed into a ‘stop the retreat’ campaign. The drain of TU membership was combatted and the leadership urged to fight back. Minority movements, so-called because a trade union leader complained about a ‘minority of troublemakers’ [12], appeared in a number of industries, particularly mining.
The prestige of the Russian revolution and the Russian leadership, together with the shared experience and tradition of many CP and non-CP militants ensured a considerable community of interest and aspiration. Despite the objections of Tanner and others to the organisational form and political content of the RILU, the Shop Stewards and Worker’s Committee Movement (SS & WCM) were content to leave the main direction and control of the rank-and-file movement to the Communist Party. At a meeting of the National Administrative Committee of the SS & WCM, in 1920, it was decided:
‘... The NAC of the SS & WCM recognise the necessity for acting in close contact with the Communist Party ... It will stress the need of its active members joining the Communist Party ... The SS & WCM and the Communist Party should devise some convenient arrangement to ensure the perfect harmony of the two organisations.’ [13]
At a joint meeting between the NAC and the CP early in 1921 the need for a national unofficial industrial movement under the hegemony of the CP was agreed.
Agreement on shared perspectives and common organisational objectives between communist and non-communist activists was important, but the action that flowed from these agreements was even more difficult. The miners’ defeat was closely followed by an attack on all working class living standards; by the end of 1921 some 6,000,000 workers had suffered a decrease of 8s per week. In 1922 the employers felt able to take on the powerful AEU in a lock-out over control of overtime and managerial functions. From March to June the AEU funds were milked dry and the engineers beaten. In 1923 the dockers were engaged and defeated. In a period of general working-class retreat the hard facts of the class war were all too nakedly apparent but the way to fight back was not nearly so clear.
At the Fourth Congress of the CI, J.T. Murphy replied to criticism from Zinoviev, that the British Party had little influence in the workshops and in the formation of factory and workshop committees, by saying that
‘in England we have had a powerful shop stewards movement. But it can and only does exist given objective conditions. These necessary conditions at the moment in England do not exist. How can you build factory organisations in empty and depleted workshops’. [14]
Despite these difficult objective conditions the British section of RILU were urged to set up a national organisation. Gallagher was put in charge of the enterprise and preparations were in hand by 1924 for a conference for a National Minority Movement (MM). Although the formation of a national movement was slow, the intervening period was not without success. In particular the Miner’s MM increased its influence considerably, especially in the Scottish and South Wales coalfields and in early 1924 the MM were influential, if not decisive, in obtaining the election of A.J. Cook (a prominent and active supporter of the MM) to the secretaryship of the Miners’ Federation. Less spectacular, but significant, advances were also made in Rails and Engineering. The party already had a fairly large influence in some smaller trade unions, like the Furniture Workers and the Tailors and Garment Workers.
The conference, that was to unite the various industrial sections into a National Majority Movement, was held on August the 23rd and 24th, 1924. Some 270 delegates representing 200,000 workers attended. [15] If the figures as to workers represented may be a little suspect, the conference was nevertheless a considerable achievement on the part of the organisers. In a way it was the high point of the Minority Movement, for even though in the future this was to be able to claim far greater and wider representation, the original intention – to unite the rank-and-file industrial movement with revolutionary communist politics in the interests of working-class socialism in Britain – was to come under considerable strain almost immediately. The independent movement of British workers was very quickly subordinated to the needs of the growing Russian bureaucracy and their foreign policy interests.
Revolutionary Trade Unionism
At the founding conference of the National Minority Movement Tom Mann was elected chairman and Harry Pollitt secretary. Pollitt explained the objectives as follows:
‘We are not out to disrupt the unions, or to encourage any new unions. Our sole object is to unite the workers in the factories by the formation of factory committees; to work for the formation of one union for each industry; to strengthen the local Trades Councils so that they shall be representative of every phase of the working-class movement, with its roots firmly embedded in the factories of each locality. We stand for the formation of a real General Council that shall have the power to direct, unite and co-ordinate all struggles and activities of the trade unions, and so make is possible to end the present chaos and go forward in a united attack in order to secure, not only our immediate demands, but win complete workers control of industry’. [16]
Allied to this general programme were the bread-and-butter demands; a £1 a week wage increase; a minimum wage of £4; the 44-hour week and no overtime. As a leavening to the demand for more power to the General Council, they also added demands for the direct affiliation to the TUC of the Unemployed Workers’ Movement and the Trades Councils.
The whole programme was set within the context of the primary aim of the Minority Movement:
‘... to organize the working masses of Great Britain for the overthrow of capitalism, ... the establishment of the Socialist Commonwealth; to carry on a wide agitation for the principles of ‘the revolutionary class struggle ... and against the present tendency towards social peace and class collaboration ...’ [17]
The introduction of straight economic demands connected the immediate pre-occupations of workers with the strengthened organisational form that might give them substance. The organisational form also provided a unified working-class army that could be directed to revolutionary action. The factory committee structure, directly represented on local trades councils, which in their turn were directly affiliated to the TUC, displayed, in embryonic form, the idea of the Soviet. The affiliation to the TUC of the Unemployed Movement also had some considerable advantages, not only because the NUWCM (National Unemployed Worker’s Committee Movement) was firmly under CP control, but also because the organised unemployed, despite their immediate lack of industrial power, displayed a satisfyingly militant spirit, particularly so during the Engineer’s lock-out.
Of more far-reaching significance, in terms of its debilitating effect on the later development of the movement, was the inclusion of the demand for greater power for the TUC. The demand had been heard before 1924 but in different circumstances. The defeat of Black Friday, with individual unions breaking solemnly concluded agreements to help others, was seen as the result of a lack of unified command. The industrial unionist tradition, in the final analysis, saw the working-class as whole and indivisible. The logic of a union built from the workshop to cover a complete industry, regardless of trade, cannot stop short at the single industry. The top of the pyramid had to be a body that represented the entire industrial working class, regardless of trade or industry. The interests of die class would have to override all sectional interests. In America, in vastly different conditions, revolutionaries built their ‘one big union’ the IWW (Industrial Workers of the World). Apart from a brief and disastrous, flirtation with independent revolutionary unions before the 1914-18 war, British Revolutionaries had, wisely, set their face against dual unionism. An attempt to set the Minority Movement in place of the TUC would not only be dual unionism with a vengeance, but also sheer lunacy in the light of the relation of forces.
The saving grace, in this situation was seen in the growth of a rank-and-file movement that would influence and direct the TUC from the grass roots. In the event, the attempt to influence the TUC led to a neglect of the grass roots that was to make impossible any chances that might have existed.
The factor which changed the direction of the National MM almost at its inception, emanated from Moscow. In October 1923 the German Revolution had gone down to defeat. This event proved to the Russians and the Comintern that the period of revolutionary offensive was at an end. The Russian revolution could no longer expect its salvation from imminent revolutions in Western Europe. The Russians would have to seek allies and security from imperialist attack elsewhere. One field in which this might be secured was in a rapprochement with the IFTU (International Federation of Trade Unions – Amsterdam) of which the largest and most influential constituent was the TUC.
At the Third Congress of die Profintern in 1924 Tomsky gave voice to the new conciliatory line: ‘We have no desire to break up the Amsterdam International. What we want is to create a strong, vigorous International’. It is interesting to contrast this statement with the ‘uncompromising opposition to the yellow International of Amsterdam’ of the 21 conditions. In the same speech Tomsky indicated the route the Profintern had chosen to the heart of the TUC General Council, when he spoke in laudatory terms of Purcell, a ‘left’ member of the General Council: ‘Beyond question a man upon whom we can rely in an emergency is Purcell, a true-hearted champion of the workers’. In retrospect it all sounds like a rather sick joke.
At the Hull TUC in September of that year Tomsky again spoke for unity in a very conciliatory spirit. Following the Congress a delegation from the General Council (Purcell, Bramley, Tillet, Turner and Findlay) attended the Sixth Congress of the Russian Trade Unions, and in early 1925 the Anglo-Russian Committee was set up. In 1924 the Labour Government had, despite Liberal protests, signed an Anglo-Russian trade treaty and guaranteed a loan to the Russians. A strong pro-Soviet tide was running not only through the TUC but also through the organised workers. The economic situation was improving and the coal industry made large coal exports. One reason for this was the French occupation of the Ruhr following the failure of the Germans to meet their reparations bill, which effectively handicapped a prime competitor of British coal. Economic improvement gave an opportunity for workers to regain some of the losses of 1922-23. But the recovery was short lived. The Dawes plan stabilised the mark, enabled reparations to be paid and helped the recovery of Germany as an international competitor.
The advent of the first Labour Government in 1924 shifted, to a degree, the political centre of gravity of the General Council. Right-wingers like J.H. Thomas, Bondfield and Gosling were taken into MacDonald’s government. As a result Swales, Hicks, Purcell and other ‘lefts’ gave the TUC a verbal militancy that corresponded to the more genuine swell in the unions.
In the period following the founding of the national movement, the MM made some advances. Affiliations from some small national unions and from numbers of district committees were secured. Between 1924 and early 1926 affiliation rose from 200,000 to 957,000. [18] Allowing for some exaggeration, duplication and, perhaps, triplication, this still represents a sizeable increase in influence. In mining, always the largest supporter of the MM, 200 MM branches were formed and very large delegations sent to the Movements’ conferences. Slightly smaller representation was forthcoming from Engineering (156 delegates at the August 1926 conference) and Transport (NUR and TGWU some 76 delegates). [19] However, apart from these main areas of strength, and a few small unions based primarily on the East End of London, the MM made little impact. Even in these industries the support was in specific geographical locations – South Wales, London, Scotland, the NW areas – interestingly enough, that corresponded closely to the successes of the pre-1914 rank-and-file movement and to the later SS & WCM.
In this period the NMM not only acquired greater membership, but also engaged activity in the struggles in mining, railways and engineering. MM policy was discussed in a number of the unions and parts adopted in some. The South Wales Miners Federation adopted the MM programme in full, including TUC affiliation to the RILU. But already the pattern was beginning to take shape. Greater and greater emphasis was given to the importance of international trade union unity and the part that the Anglo-Russian Committee could play in this venture. MM delegates to the TUC were urged to act as a bloc. At the 1925 Trades Union Congress the MM were able to get a resolution committing the General Council to fight, through the IFTU for Russian affiliation. At the same Congress the Tailors and Garment Workers moved and Pollitt, for the Boilermakers, seconded a resolution which called for the trade unions to organise for the overthrow of capitalism ‘in conjunction with the party of the workers’, opposition to ‘capitalist schemes of co-partnership’ and strong workshop organisation. After a card vote, the resolution was carried by 2,456,000 votes to 1,218,000 votes.
The 1925 Congress represented a high point in the relationship between the MM movement and the TUC ‘lefts’. Alonzo Swales, in his Presidential address had said that
‘a militant and progressive policy, consistently and steadily pursued is die only policy that will consolidate and inspire our rank-and-file ... there cannot be any community of interest between the working-class and the capitalist-class’. He went on to urge the Congress to give the General Council ‘full powers to create the necessary machinery to combat every movement of our opponents.’ [20]
The background to these largely verbal pyrotechnics is to be found in the events of July 31st, 1925 ‘Red Friday’.
The effects of the Dawes plan, and the Baldwin administrations decision to return to the gold standard, produced, as Keynes succinctly put it, ‘an atmosphere favourable to the reduction of wages’. Export prices fell rapidly, particularly for coal – suffering especially from the Dawes scheme of payment in kind with Ruhr coal. The mine-owners proposed a return to the wage structure of 1921 and an increase of one hour in the working day. The actual effect of this cut is best expressed in Symons’ book The General Strike:
‘... the proposed wage cuts were between 10 per cent and 25 per cent of the wages earned and these wages vary between £2 and £4 a week.’ [21]
On top of this, of course, it would take an extra hour a day to earn the decreased wages. The miners’ leaders, A.J. Cook and Herbert Smith adamantly refused any attempt to compromise. Herbert Smith, a taciturn Yorkshireman, seems to have restricted his contributions to the discussion to the simple, yet telling phrase ‘nowt doin’, on one occasion while cleaning his false teeth on his handkerchief.
The triple alliance had not survived Black Friday and, although a new ‘Industrial Alliance’ was in train it had not made much progress. The TUG was the only organisation capable of bringing aid to the miners. The TGWU agreed to call a strike in solidarity, and the General Council put a complete embargo on the movement of coal from July 31st, the day the employer’s notices were to come into effect. The government, whatever the wishes of the coal-owners, felt compelled to enter the debate. At a meeting with the mine-workers the Prime Minister, Baldwin refused to agree to subsidise the mines. In a prophetic statement he indicated that the miners were merely the first of many workers to pay for the country’s difficulties: ‘All the workers in the country have got to take a reduction in wages.’ [22] Only hours before the July 31st deadline the government caved in and agreed to pay a subsidy to the industry until May 1st, 1926. The subsidy, estimated to cost £10m, in fact cost £23m [23], but, whatever the subsidy cost the government, it certainly bought them nine months in which to prepare. The lack of preparation displayed by the TUC and the MM were to cost the working-class far more than £23 million, which they repaid many times over in lower wages and worsened conditions. They also lost for years the possibility of revolutionary change.
The Scarborough (1925) TUC that reflected, in words, the working-class elan induced by Red Friday made little or no attempt to prepare the movement for the decisive struggle that all agreed had merely been postponed for nine months. It was also significant that, apart from the speeches of Swales and A.J. Cook, no left-wing member of the General Council spoke in any of the major debates. The right-wingers were not so shy. Bevin, Thomas and Clynes all spoke against the idea of turning the TUC from a federation to a directing centre of the working-class. Clynes went so far as to declare,
‘I am not in fear of the capitalist class. The only class I fear is our own.’
In this Clynes merely reflected the general attitude of the Labour Party right-wing. Ramsey MacDonald called Red Friday ‘a victory for the very forces that sane, well-considered, thoroughly well-examined Socialism feels to be probably its greatest enemy’. J.H. Thomas said ‘the subsidy is wrong and will prove a disaster to the country’ and Hodges (General Secretary of the Miners’ Federation before he entered Parliament in 1924) thought it ‘a sure step in the direction of national bankruptcy’. In the order of social upheaval a General Strike is the next best thing to an armed insurrection and inevitably the very suggestion of such an event raises directly the question of power. The logic of May 1926 draws one ineluctably to this conclusion. Capitalism had clearly and manifestly failed; at one trade union conference after another the straight experience of the members gave witness to this truth. Resolution after resolution expressed determination, in words, to carry through the socialist revolution. Realistic analysis was not in short supply; there was no premium on the discussion of radical solutions. The missing factor was any sort of direct class preparation.
The right-wing trade union leadership were opposed to the strike, seeing it only as a never to be played bargaining counter to obtain concessions from the Government. The centrist elements on the General Council saw the strike as a continuation of normal trade union pressure that might well, in some undefined way, enhance the social influence of the workers and could, at some other time, give rise to social change. Neither of these groups, for their different reasons, made any serious preparations.
The Communist Party and the other militants of the Minority Movement were quite clear as to the revolutionary implications of the General Strike. It was the event which accorded with their whole history and traditions, as industrial unionists, and also the likely route that a mature working-class with a developed trade union movement would follow.
The basic problems that vitiated their efforts were two-fold. The first and least important, was the small size of the CP (5,000 members in the CP, 5,000 in the YCL [24]), and the psychological inhibitions that this lack of numbers induced. Second, and more important, was the Russian influenced emphasis on the General Council as the vehicle on which the party should ride.
The first problem could have been overcome. The CP, at that time, had far wider working-class periphery than they have ever enjoyed since. In the Minority Movement they had a far reaching influence in at least three major unions and a wide following in trades councils and trade union branches. It is in just such circumstances as this that a small organisation that prepares to operate independently can become a mass party. There is no guarantee, of course, that had the party had Lenin at the helm and Trotsky organising the operation they would have succeeded. What is clear, however, is that there was no chance of success in the policy and procedure they adopted up to and during the strike.
The General Council were instructed to extend the Industrial Alliance, to create Councils of Action, to strengthen workshop committees, to form workers’ defence squads and to prepare for the maintenance of essential services. The General Council could not, would not and did not do any of these things.
Despite the clear warning of Government intentions in the arrest and sentencing of 12 leading members of the party (Inkpin, Pollitt, Rust, Gallacher, Hannington, McManus, Bell, Murphy, Campbell, Page Arnot, Wintringham and Cant) in 1925, its precautions and preparations were rudimentary. During the strike over 1,000 party members were arrested. Although leading members were sent out to the provinces, communication was almost impossible because the necessary provisions had not been made. Decisions taken by the Political Bureau during the strike were not transmitted to the branches for four days.
The slogans of the party were defensive slogans – ‘Not a penny off the pay, not a second on the day’ – cast within the framework of defence of the miners. As the report to the Eighth Party Congress confessed in October 1926,
‘Once the masses were on the streets the business of Central Committee was to extend these slogans at the same time malting them aggressive in character.’ [25]
In their manifesto, The Political Meaning of the General Strike, published during the strike, the main emphasis was on the miners’ demands, nationalisation and the replacement of the Tory government with a Labour government. Even when the CP considered raising demands for groups of workers other than the miners they decided to operate through the appropriate unions. [26]
The story of the General Strike is too well known to rehearse it here. It suffices to say that whatever opportunities the situation offered to the revolutionary movement were not grasped. The working-class paid and paid heavily for the debilitating influence of the Comintern. For the Minority Movement and the Communist Party the first real chance not taken was the last chance to take anything at all. The Minority Movement lived on until the early 1930’s, the Communist Party is still with us bereft of the certainties of outright Stalinism yet incapable of drawing any lessons from its failures. Its main function as an organisation is to stand as an obstacle in the way of a genuine revolutionary organisation.
The post-strike history of the Minority Movement stands in no way as an object lesson for revolutionaries. It is unlikely that any future revolutionary organisation would perform the grotesque antics that drove the movement into oblivion. The whole ‘third period’ insanity of the ‘Class against Class’ policy and the dual unionism of the early 1930’s cannot be explained except through the abject subordination of the CPGB to the dictates of the Stalinist bureaucracy.
The tragedy of the Minority Movement and the infant Communist Party is not, however, in its failure; for every movement has its failures. The tragedy is in the loss, from meaningful class politics, of a whole generation of working-class militants. The early CP contained thousands of workers, dedicated to revolutionary socialism and with a wealth of rank-and-file trade union experience. That men like Pollitt, Mann, Murphy, Gallacher, Bell and hundreds of others spent their talented lives in the sterile service of Stalinism, through all the betrayals, small and large, that were entailed, says a great deal for the conviction that originally brought them to the socialist movement.
The Minority Movement is no more and the conditions and traditions and the men that gave rise to it, in its specific form, no longer exist. Attempts to set up its latter day equivalent are an exercise either in historical nostalgia or attempts to repeat the tragedy of the 1920’s in the farce of 1970.
Nowhere in Britain today does the revolutionary movement have the working-class base or the working-class periphery to set in motion an organisation that can operate as a coherent opposition within the unions. The immediate task is not to build meaningless paper organisations but to expand our influence and membership among the class. The job is more exacting and less exciting than the search for surrogates at any number of points on the third world compass. Nor is it as exhilirating as the construction of an exclusive super bolshevik party, with all of 400 members, that, in its own estimation, teeters on the brink of power. (How long can one teeter without actually falling on one’s face?) Nor is it as easy as the illusory soft option of snuggling up to the ‘left wing’ of the trade union leadership and the parliamentary Labour Party. It is much more difficult than all of these things, but ultimately it is the only way to success.
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Notes
1. Marx-Engels, Selected Correspondence, p.326.
2. Communism and the British Trade Unions, 1924-33, Oxford University Press, 50s.
3. Some Past Rank-and-File Movements, Labour Review, April-May 1959.
4. Quoted in Pearce, op. cit.
5. See Martin Glaberman, Be His Wages High or Low, IS 21.
6. Walter Kendall, The Revolutionary Movement in Britain, p.25.
7. Quoted in Coates and Topham, Workers’ Control, p.95.
8. Thesis of Third Congress CI and RILU, quoted in Coates and Topham, op. cit., p.85.
9. Allen Hutt, Post-War History of the British Working Class, p.59.
9a. ibid., p.61.
10. R. Fox, Class Struggle in Britain, p.79.
11. Hutt, op. cit., p.63.
12. Pearce, op. cit.
13. NAC Report, September 1920, quoted in Martin, op. cit., p.18.
14. Quoted in Coates and Topham, op. cit., p.134.
15. Report of the First NMM Conference, R. Martin, op. cit., p.36.
16. Hutt, op. cit., p.93
17. Report of the NMM Conference; 1924, quoted in Martin, op. cit., p.37.
18. NMM Reports, quoted in Martin, op. cit., p.57.
19. ibid.
20. TUC Report, 1925.
21. Julian Symons, The General Strike, p.9.
22. ibid., p.14.
23. ibid., p.16.
24. Figures from K. Newton, The Sociology of British Communism.
25. Martin, op. cit., p.73.
26. ibid.
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Last updated on 30.12.2007
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<h2>Jim Higgins</h2>
<h1>1956 and All That</h1>
<h3>(1993)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">Originally published in 1993 in <strong>New Interventions</strong>.<br>
Republished in <strong>What Next?</strong>, No.25, Spring 2003.<br>
Downloaded with thanks from the <a href="http://www.whatnextjournal.co.uk/" target="new"><em>What Next?</em> Website</a>.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="quoteb">“I beseech you, in the bowels of Christ, think it possible you may be mistaken.” Oliver Cromwell</p>
<h4>A Brick to the Midriff</h4>
<p class="fst">At the 20th Congress of the CPSU in 1956, Khrushchev delivered his secret speech. In it he detailed a partial, but nevertheless lengthy, list of Stalin’s crimes, ranging from murder on the grand scale to making Mikoyan, despite his advancing years, dance the gopak. The shock wave emanating from this congress hit the World Communist movement like a well aimed brick. A further, directly connected, shock came with the Russian invasion of Hungary. British Communists were treated to the irony of discovering that the reports from Peter Fryer, the <strong>Daily Worker</strong> correspondent in Budapest, were being spiked in favour of uncritical pieces from J.R. Campbell in Moscow. These two world-shattering events put the CPGB into turmoil, and for the first time since the 1920s a genuine debate took place around a real issue. The leadership was closely questioned not only about the abuses in Russia but also about their own guilty knowledge of these crimes.</p>
<p>Rajani Palme Dutt, the Communist Party’s leading theoretician, stumped the country attempting to explain the inexplicable and justify the unjustifiable. One of his little gems, expounded at full throttle, was to suggest that, although Stalin had a few faults, we should bear in mind that even the sun – from which all life flows – has spots. This inspired allusion to solar acne was not universally well received.</p>
<p>In the wake of the Khrushchev revelations and after a party congress, some 7,000 members left the party. Of that number many were on their way out of politics altogether, just too tired to take on another unequal struggle. Some saw it as an opportunity to jettison the political ballast holding back their trade union careers. Others built themselves a new politics in the Labour Party and even today a few of them adorn the Labour benches in both Houses of Parliament. There was also a minority who were not exhausted, had no career prospects to improve and were dubious about the Labour Party. What they did have was a desire to remain communists, albeit with a small “c”. For them, the root of the problem went rather deeper than the simple formula: “the cult of the individual.” Marxism, was the general thought, can do better than that. The New Left and especially the <strong>New Reasoner</strong>, edited by John Saville and E.P. Thompson, provided an important forum for discussion and new thinking within a Marxist framework.</p>
<p>Isaac Deutscher addressed meetings of many hundreds and showed there was another tradition that differed markedly from Stalinism and was superior in every respect. Valuable though these contributions were, neither Thompson and Saville nor Deutscher were able to build an organisation. Indeed, Deutscher was a self-proclaimed tenant of that ivory tower, from which vantage point he might comment knowledgeably on the passing scene.</p>
<p>The few thousand ex-Communists did not form their own organisation, as had occurred in several countries abroad. If they had, one has the distinct impression, they would have been the subject of some fairly determined entrism from several quarters.<br>
</p>
<h4>The Reasonable Healy</h4>
<p class="fst">There was, however, the British Trotskyist movement – small and divided, like ancient Gaul, into three parts. They were, in ascending order of size: Ted Grant’s Revolutionary Socialist League, Tony Cliff’s Socialist Review Group and Gerry Healy’s Club. Size is, of course, a relative term and between the three of them they probably organised no more than 200 to 300 members. Even so, this crisis of Stalinism was the event for which they had waited and worked for so long. The chance had arrived to build a cadre with roots in the labour movement.</p>
<p>At least half of the British Trotkyists were in Healy’s group and it was certainly the Club that made the only significant inroads into the disaffected Communists. Their numerical superiority was, however, of less significance than the fact that the Club possessed a printing press and, even more significant, via the good offices of the American SWP, the plates to several key works of Trotsky. For those who had for years struggled through Stalin’s clotted prose, to read Trotsky was akin to finding a clear mountain spring after a lifetime of drinking from a puddle in a livery stable. The clarity and masterly exposition of <strong>The Revolution Betrayed</strong> was both exciting and convincing. Much of the credit for this rubbed off on the Club, who were generous enough to supply the book. It also has to be said that the Gerry Healy of that time was not at all as unpleasant as he had been in the past, nor as repellent as he became subsequently. An altogether calmer and more tolerant chap who, if not actually allowing a hundred flowers to bloom unhindered, would permit the odd blossom a modicum of eccentric conformation. So long as Healy leant heavily on Trotsky’s theoretical underpinning, the superiority of his Marxist analysis went unchallenged. Sectarianism was heavily suppressed, with not a mention of Pabloite revisionism or the crimes of the state caps that was to come later.</p>
<p>Among those whom the Club recruited were some very talented people. Peter Fryer, a fine journalist and outstanding expositor of Marxist theory, Brian Behan, a leading building worker and one of the best stump orators of his day, Brian Pearce, historian and translator, John Daniels, a leading educationalist, and a number of academics such as Ken Coates, Cliff Slaughter and Tom Kemp. Not only that, there was in addition a number of workers with considerable trade union and political experience. Peter Fryer edited <strong>The Newsletter</strong> as a lively entrist paper and John Daniels and Bob Shaw edited <strong>Labour Review</strong>, a theoretical journal of high quality. Even today the early issues of the magazine have a freshness that one does not usually associate with the products of the Healy stable. The new members were inducted into work in the Labour Party and an intensive education detailing the history of the movement and Trotsky’s critique of Stalinism: the first four congresses of the Communist International, the Left Opposition, Germany in 1923, the General Strike, the Chinese revolution, the Third Period, fascism in Germany, Spain, etc, etc, etc. It was fascinating stuff, coherent, imbued with revolutionary spirit and conferring confidence on comrades who had been starved of genuine Marxism in the CP. One has to be grateful that this education was made available, together with the printed texts.<br>
</p>
<h4>The South Bank Strike and its Consequences</h4>
<p class="fst">Then, in 1958, Brian Behan obtained work as a labourer on McAlpines South Bank site. Whoever took him on very quickly learned their mistake, a very costly mistake. Behan was fired and, despite the fact that there were a number of inexperienced and unorganised workers on the site, the shop stewards committee – which was led by Hugh Cassidy and was both experienced and resolute – called a strike. The whole organisational weight of the Club was thrown behind the dispute. Special issues of <strong>The Newsletter</strong> were produced and strike bulletins and leaflets rolled off the press. For the first time since the general strike of 1926, middle class revolutionaries joined the workers on the picket line. Brian Behan’s brother Brendan (the playwright) appeared dispensing ten bob notes and not a few pints of Guinness. The police were much in evidence, arrests were made and, after one fracas, Brian Behan was arrested and given three months in Shepton Mallet prison.</p>
<p>The builders’ union, the AUBTW, alarmed at the nature and background to the strike, took on the role of strike-breakers. For the Club leadership this was not just an important struggle from which the group could build a revolutionary presence in the unions, but a life and death struggle where the employers, the state, the police, the judiciary and the trade unions were hell bent not only on breaking the strike, but also on destroying the revolutionary movement. It was, in a word, Healy’s own Minneapolis-St. Paul. From this small, but potentially valuable, base Healy extrapolated to a mass movement with power as a prize not too long delayed.</p>
<p>On the wave of enthusiasm engendered by the strike, and quite correctly in line with a policy of building bridges to the organised workers, a National Rank and File Conference was called on a programme of aggressive rank and file trade unionism, workers’ control of the unions, and average wages and an end to perks for trade union officials.</p>
<p>The conference was well attended, by some 800 delegates, most of whom were genuine, with a good discussion and acceptance of the programme. Here was a chance for a left group to break out of sterile isolation into the workers’ movement. To do so would require patience, sensitivity and an ability to transcend immediate difficulties in the interest of future gain. Unfortunately, Healy had none of these qualities. As a result of some fairly inaccurate reporting on the Club in the <strong>News Chronicle</strong>, and some rather more accurate reporting in the <strong>South London Press</strong>, Healy was panicked into ill-considered and precipitate action. Under pressure from Behan, whose prestige was high and who had always displayed a distinct apathy to the Labour Party, Healy called for the formation of the Socialist Labour League. It might have been possible to argue that the time had come for an end to entrism, but that would have required a serious campaign of discussion and activity, testing the water both inside and outside the Labour Party. None of this was done – the group was presented with a virtual diktat. For a bigger, more sophisticated organisation it might have been possible to run an open political group and also carry out the hard slog of rank and file activity. The Club lacked these qualities and, in any case, it was about to become quite a bit smaller.</p>
<p>Many of the ex-CP members had required a deal of convincing of the necessity of entering the Labour Party. Now, a few brief months later, they were to ignore yesterday’s orthodoxy. Aggregates were conducted in an acrimonious spirit, branch meetings degenerated into abusive slanging matches. Peter Fryer, who had been in the eye of the storm, centred on Clapham High Street, was distressed by the tantrums and uncomradely spirit and abruptly resigned and disappeared. Healy took this very hard, and old friends of Peter’s, correctly assumed to be oppositional, were treated to midnight visits by Healy and two or three heavies for a “discussion” and to see if Peter was concealed in the attic. Appalled by this behaviour and opposed to the way the SLL turn had been thrust on the organisation, a faction was formed. The Stamford faction (so named after the grounds of stately home at which the first meeting was held) had about 25 members, among them Peter Fryer, John Daniels, Edward Thompson, Ken Coates and Peter Cadogan. Also among the 25 was the obligatory spy to keep Healy abreast of developments. A document, “The 1959 Situation in the SLL”, was produced, which Cadogan – who acted as faction secretary – for reasons known only to himself advertised in <strong>Tribune</strong>. In short order, Healy’s tame solicitor was issuing writs for libel against the signatories. Expulsion followed the writs with some speed. Not long afterwards, Behan and his co-thinkers, now characterised as ultra-left, were expelled. In the space of a couple of years, Healy had recruited, alienated and expelled practically all of the 1956 levy. Nearly all of them were lost to revolutionary politics. What Stalin could not accomplish, Healy managed in record time.<br>
</p>
<h4>Building the Party by Expulsions</h4>
<p class="fst">Only a handful of that levy remained, perhaps the most notable being Cliff Slaughter, who carried on for another 25 years providing a small intellectual fig leaf for Healy. How he, and some others, supped so long with such short spoons at Healy’s table I have not yet seen satisfactorily explained. Perhaps, like Alasdair MacIntyre, they have made their peace with God.</p>
<p>The destruction of that particular cadre was just one episode – and probably the most important – in a continuing process of finding a likely area for recruitment, performing Herculean tasks of organisation, followed by draconian measures of discipline and expulsion. It seemed that, as soon as the group began to grow to the point where it could not be controlled by Gerry Healy leaping aboard his “<em>Rififi</em>-type Citroën” (the description is Brian Behan’s) and nipping round the country suppressing dissent, the group needed to be reduced to manageable proportions. In this way a legion of ex-Trotskyists was created. Indeed, if one were inclined to conspiracy theory, one might hazard that all along Healy had been in the pay of the Mikado, the Axis, the State Department and the Deuxième Bureau.</p>
<p>How, one might ask, could one man, aided by a few Satraps, manage for so long to maintain this kind of regime? From the outside it is almost impossible to answer such a question. Suffice it to say, the very fact of membership implies a belief that this is the revolutionary party, if only in embryo. Whatever the immediate discontents, there is general agreement on the politics, in essence Trotsky’s politics. Given this, the critic is already half disarmed.</p>
<p>The Socratic dialogue goes thus:</p>
<p class="quoteb">Q. What vehicle will enable the working class to build socialism?<br>
A. A revolutionary party.<br>
Q. Is the CIub/SLL/WRP the revolutionary party?<br>
A. Yes, otherwise I would not be having this discussion.<br>
Q. As the revolutionary organisation, does not the Club/SLL/WRP represent the objective interests of the working class?<br>
A. Er ... yes.<br>
Q. If the Club/SLL/WRP represents the objective needs of the workers, then your opposition must be based on alien class forces, with all this implies for your continued membership.</p>
<p class="fst">As Tommy Cooper used to say: “Get out of that.”</p>
<p>There is, however, life after expulsion, and with a little time to reflect one becomes aware that the Club/SLL/WRP is not a revolutionary party of any kind and that the class must look elsewhere for its objective needs to be serviced. The truth is that with the steady erosion of the cadre, any opportunity to become active in a genuinely working class milieu is made impossible. The mutual interaction between the Marxist organisation and advanced workers is the only guarantee of an unfolding programme and a growing party. Trotskyism is not the last word, it is a stepping stone to a higher synthesis.</p>
<p>Since Trotsky’s exile in 1928, the movement’s relationship with any significant group of workers has been episodic and peripheral. Given the circumstances, this may have been inevitable, but this enforced isolation has given rise to some very strange organisational forms and even more eccentric practices. To recruit, given something coherent and different to say, is not impossible, so long as it is worked at hard and steadily. To retain and to utilise that recruitment is something that the movement has signally failed to do. The fault may lay in ourselves not the stars.</p>
<p>For fifty years Healy strove to build a group in his own image and today it is shattered into half a dozen tiny fragments. Any worker with a passing knowledge of the history of Healyism would have been half-witted to see any of this as a vehicle for socialism. Inevitably, in an account like this, the name of Gerry Healy looms large. Nevertheless, we can take comfort from the fact that neither Healy nor his less talented clones represent the essence of the Trotskyist movement. Clique politics operate on idiosyncratic rules, in a land when psychology provides more answers than class analysis. Certainly, before any reasonable tribunal, Healy could seek refuge behind the McNaughton rules. When you think about it, there are suburban tennis clubs with their share of megalomaniac officials.<br>
</p>
<h4>Do We Need So Many “Vanguards”?</h4>
<p class="fst">Of greater concern is the fact that, at a time when Stalinism has collapsed, there are more Trotskyist groups than ever before. Practically all of them fall neatly under Marx’s definition of a sect, in that they take as their point of honour that shibboleth that separates them from the movement. There is no organisation that is immaculately constructed no matter how ideologically correct because ideology is not a fixed or finished category. It follows from this that an aggregation of like-minded sects, masquerading as an International, with a capital “I”, cannot substitute for the pathetic inadequacy of its sections. This form of substitutionism leads to disillusion, intrigue, factionalism and further splits, elevating irrelevance to a global scale.</p>
<p>An organisation of tens, a few hundred, or even a few thousands will not succeed unless it gets rid of the dross that has accumulated over the years. It is particularly distressing, for example, that the great rift between defencists and state caps should still generate so much heat. For my part I agree with the sentiments expressed by Ken Tarbuck in a recent letter: “I came to the conclusion that none of the theories were adequate, their main merits were in showing the deficiencies of the opposing views without really taking one forward.” Neither theory has stood the test of real life (incidentally, by the same yardstick, bureaucratic collectivism also looks pretty moth-eaten). It would be nice if there could be a self-denying ordinance, restricting discussion on the class nature of Outer Mongolia to the pub, after the serious business of the meeting had been concluded. Stalinism is gone, capitalism is in crisis and there are distinct signs of a renewal of working class struggle, printing technology is more accessible than ever before (which is one reason why there are so many small groups with their own little journals).</p>
<p>This happy conjunction of circumstances cries out for a united revolutionary organisation, committed to work in and around the class, and equally committed to learn from experience. None of us has all the answers and, when all is said and done, we have nothing to lose but our sectarian chains and a world to win.</p>
<p> </p>
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MIA > Archive > Higgins
Jim Higgins
1956 and All That
(1993)
Originally published in 1993 in New Interventions.
Republished in What Next?, No.25, Spring 2003.
Downloaded with thanks from the What Next? Website.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
“I beseech you, in the bowels of Christ, think it possible you may be mistaken.” Oliver Cromwell
A Brick to the Midriff
At the 20th Congress of the CPSU in 1956, Khrushchev delivered his secret speech. In it he detailed a partial, but nevertheless lengthy, list of Stalin’s crimes, ranging from murder on the grand scale to making Mikoyan, despite his advancing years, dance the gopak. The shock wave emanating from this congress hit the World Communist movement like a well aimed brick. A further, directly connected, shock came with the Russian invasion of Hungary. British Communists were treated to the irony of discovering that the reports from Peter Fryer, the Daily Worker correspondent in Budapest, were being spiked in favour of uncritical pieces from J.R. Campbell in Moscow. These two world-shattering events put the CPGB into turmoil, and for the first time since the 1920s a genuine debate took place around a real issue. The leadership was closely questioned not only about the abuses in Russia but also about their own guilty knowledge of these crimes.
Rajani Palme Dutt, the Communist Party’s leading theoretician, stumped the country attempting to explain the inexplicable and justify the unjustifiable. One of his little gems, expounded at full throttle, was to suggest that, although Stalin had a few faults, we should bear in mind that even the sun – from which all life flows – has spots. This inspired allusion to solar acne was not universally well received.
In the wake of the Khrushchev revelations and after a party congress, some 7,000 members left the party. Of that number many were on their way out of politics altogether, just too tired to take on another unequal struggle. Some saw it as an opportunity to jettison the political ballast holding back their trade union careers. Others built themselves a new politics in the Labour Party and even today a few of them adorn the Labour benches in both Houses of Parliament. There was also a minority who were not exhausted, had no career prospects to improve and were dubious about the Labour Party. What they did have was a desire to remain communists, albeit with a small “c”. For them, the root of the problem went rather deeper than the simple formula: “the cult of the individual.” Marxism, was the general thought, can do better than that. The New Left and especially the New Reasoner, edited by John Saville and E.P. Thompson, provided an important forum for discussion and new thinking within a Marxist framework.
Isaac Deutscher addressed meetings of many hundreds and showed there was another tradition that differed markedly from Stalinism and was superior in every respect. Valuable though these contributions were, neither Thompson and Saville nor Deutscher were able to build an organisation. Indeed, Deutscher was a self-proclaimed tenant of that ivory tower, from which vantage point he might comment knowledgeably on the passing scene.
The few thousand ex-Communists did not form their own organisation, as had occurred in several countries abroad. If they had, one has the distinct impression, they would have been the subject of some fairly determined entrism from several quarters.
The Reasonable Healy
There was, however, the British Trotskyist movement – small and divided, like ancient Gaul, into three parts. They were, in ascending order of size: Ted Grant’s Revolutionary Socialist League, Tony Cliff’s Socialist Review Group and Gerry Healy’s Club. Size is, of course, a relative term and between the three of them they probably organised no more than 200 to 300 members. Even so, this crisis of Stalinism was the event for which they had waited and worked for so long. The chance had arrived to build a cadre with roots in the labour movement.
At least half of the British Trotkyists were in Healy’s group and it was certainly the Club that made the only significant inroads into the disaffected Communists. Their numerical superiority was, however, of less significance than the fact that the Club possessed a printing press and, even more significant, via the good offices of the American SWP, the plates to several key works of Trotsky. For those who had for years struggled through Stalin’s clotted prose, to read Trotsky was akin to finding a clear mountain spring after a lifetime of drinking from a puddle in a livery stable. The clarity and masterly exposition of The Revolution Betrayed was both exciting and convincing. Much of the credit for this rubbed off on the Club, who were generous enough to supply the book. It also has to be said that the Gerry Healy of that time was not at all as unpleasant as he had been in the past, nor as repellent as he became subsequently. An altogether calmer and more tolerant chap who, if not actually allowing a hundred flowers to bloom unhindered, would permit the odd blossom a modicum of eccentric conformation. So long as Healy leant heavily on Trotsky’s theoretical underpinning, the superiority of his Marxist analysis went unchallenged. Sectarianism was heavily suppressed, with not a mention of Pabloite revisionism or the crimes of the state caps that was to come later.
Among those whom the Club recruited were some very talented people. Peter Fryer, a fine journalist and outstanding expositor of Marxist theory, Brian Behan, a leading building worker and one of the best stump orators of his day, Brian Pearce, historian and translator, John Daniels, a leading educationalist, and a number of academics such as Ken Coates, Cliff Slaughter and Tom Kemp. Not only that, there was in addition a number of workers with considerable trade union and political experience. Peter Fryer edited The Newsletter as a lively entrist paper and John Daniels and Bob Shaw edited Labour Review, a theoretical journal of high quality. Even today the early issues of the magazine have a freshness that one does not usually associate with the products of the Healy stable. The new members were inducted into work in the Labour Party and an intensive education detailing the history of the movement and Trotsky’s critique of Stalinism: the first four congresses of the Communist International, the Left Opposition, Germany in 1923, the General Strike, the Chinese revolution, the Third Period, fascism in Germany, Spain, etc, etc, etc. It was fascinating stuff, coherent, imbued with revolutionary spirit and conferring confidence on comrades who had been starved of genuine Marxism in the CP. One has to be grateful that this education was made available, together with the printed texts.
The South Bank Strike and its Consequences
Then, in 1958, Brian Behan obtained work as a labourer on McAlpines South Bank site. Whoever took him on very quickly learned their mistake, a very costly mistake. Behan was fired and, despite the fact that there were a number of inexperienced and unorganised workers on the site, the shop stewards committee – which was led by Hugh Cassidy and was both experienced and resolute – called a strike. The whole organisational weight of the Club was thrown behind the dispute. Special issues of The Newsletter were produced and strike bulletins and leaflets rolled off the press. For the first time since the general strike of 1926, middle class revolutionaries joined the workers on the picket line. Brian Behan’s brother Brendan (the playwright) appeared dispensing ten bob notes and not a few pints of Guinness. The police were much in evidence, arrests were made and, after one fracas, Brian Behan was arrested and given three months in Shepton Mallet prison.
The builders’ union, the AUBTW, alarmed at the nature and background to the strike, took on the role of strike-breakers. For the Club leadership this was not just an important struggle from which the group could build a revolutionary presence in the unions, but a life and death struggle where the employers, the state, the police, the judiciary and the trade unions were hell bent not only on breaking the strike, but also on destroying the revolutionary movement. It was, in a word, Healy’s own Minneapolis-St. Paul. From this small, but potentially valuable, base Healy extrapolated to a mass movement with power as a prize not too long delayed.
On the wave of enthusiasm engendered by the strike, and quite correctly in line with a policy of building bridges to the organised workers, a National Rank and File Conference was called on a programme of aggressive rank and file trade unionism, workers’ control of the unions, and average wages and an end to perks for trade union officials.
The conference was well attended, by some 800 delegates, most of whom were genuine, with a good discussion and acceptance of the programme. Here was a chance for a left group to break out of sterile isolation into the workers’ movement. To do so would require patience, sensitivity and an ability to transcend immediate difficulties in the interest of future gain. Unfortunately, Healy had none of these qualities. As a result of some fairly inaccurate reporting on the Club in the News Chronicle, and some rather more accurate reporting in the South London Press, Healy was panicked into ill-considered and precipitate action. Under pressure from Behan, whose prestige was high and who had always displayed a distinct apathy to the Labour Party, Healy called for the formation of the Socialist Labour League. It might have been possible to argue that the time had come for an end to entrism, but that would have required a serious campaign of discussion and activity, testing the water both inside and outside the Labour Party. None of this was done – the group was presented with a virtual diktat. For a bigger, more sophisticated organisation it might have been possible to run an open political group and also carry out the hard slog of rank and file activity. The Club lacked these qualities and, in any case, it was about to become quite a bit smaller.
Many of the ex-CP members had required a deal of convincing of the necessity of entering the Labour Party. Now, a few brief months later, they were to ignore yesterday’s orthodoxy. Aggregates were conducted in an acrimonious spirit, branch meetings degenerated into abusive slanging matches. Peter Fryer, who had been in the eye of the storm, centred on Clapham High Street, was distressed by the tantrums and uncomradely spirit and abruptly resigned and disappeared. Healy took this very hard, and old friends of Peter’s, correctly assumed to be oppositional, were treated to midnight visits by Healy and two or three heavies for a “discussion” and to see if Peter was concealed in the attic. Appalled by this behaviour and opposed to the way the SLL turn had been thrust on the organisation, a faction was formed. The Stamford faction (so named after the grounds of stately home at which the first meeting was held) had about 25 members, among them Peter Fryer, John Daniels, Edward Thompson, Ken Coates and Peter Cadogan. Also among the 25 was the obligatory spy to keep Healy abreast of developments. A document, “The 1959 Situation in the SLL”, was produced, which Cadogan – who acted as faction secretary – for reasons known only to himself advertised in Tribune. In short order, Healy’s tame solicitor was issuing writs for libel against the signatories. Expulsion followed the writs with some speed. Not long afterwards, Behan and his co-thinkers, now characterised as ultra-left, were expelled. In the space of a couple of years, Healy had recruited, alienated and expelled practically all of the 1956 levy. Nearly all of them were lost to revolutionary politics. What Stalin could not accomplish, Healy managed in record time.
Building the Party by Expulsions
Only a handful of that levy remained, perhaps the most notable being Cliff Slaughter, who carried on for another 25 years providing a small intellectual fig leaf for Healy. How he, and some others, supped so long with such short spoons at Healy’s table I have not yet seen satisfactorily explained. Perhaps, like Alasdair MacIntyre, they have made their peace with God.
The destruction of that particular cadre was just one episode – and probably the most important – in a continuing process of finding a likely area for recruitment, performing Herculean tasks of organisation, followed by draconian measures of discipline and expulsion. It seemed that, as soon as the group began to grow to the point where it could not be controlled by Gerry Healy leaping aboard his “Rififi-type Citroën” (the description is Brian Behan’s) and nipping round the country suppressing dissent, the group needed to be reduced to manageable proportions. In this way a legion of ex-Trotskyists was created. Indeed, if one were inclined to conspiracy theory, one might hazard that all along Healy had been in the pay of the Mikado, the Axis, the State Department and the Deuxième Bureau.
How, one might ask, could one man, aided by a few Satraps, manage for so long to maintain this kind of regime? From the outside it is almost impossible to answer such a question. Suffice it to say, the very fact of membership implies a belief that this is the revolutionary party, if only in embryo. Whatever the immediate discontents, there is general agreement on the politics, in essence Trotsky’s politics. Given this, the critic is already half disarmed.
The Socratic dialogue goes thus:
Q. What vehicle will enable the working class to build socialism?
A. A revolutionary party.
Q. Is the CIub/SLL/WRP the revolutionary party?
A. Yes, otherwise I would not be having this discussion.
Q. As the revolutionary organisation, does not the Club/SLL/WRP represent the objective interests of the working class?
A. Er ... yes.
Q. If the Club/SLL/WRP represents the objective needs of the workers, then your opposition must be based on alien class forces, with all this implies for your continued membership.
As Tommy Cooper used to say: “Get out of that.”
There is, however, life after expulsion, and with a little time to reflect one becomes aware that the Club/SLL/WRP is not a revolutionary party of any kind and that the class must look elsewhere for its objective needs to be serviced. The truth is that with the steady erosion of the cadre, any opportunity to become active in a genuinely working class milieu is made impossible. The mutual interaction between the Marxist organisation and advanced workers is the only guarantee of an unfolding programme and a growing party. Trotskyism is not the last word, it is a stepping stone to a higher synthesis.
Since Trotsky’s exile in 1928, the movement’s relationship with any significant group of workers has been episodic and peripheral. Given the circumstances, this may have been inevitable, but this enforced isolation has given rise to some very strange organisational forms and even more eccentric practices. To recruit, given something coherent and different to say, is not impossible, so long as it is worked at hard and steadily. To retain and to utilise that recruitment is something that the movement has signally failed to do. The fault may lay in ourselves not the stars.
For fifty years Healy strove to build a group in his own image and today it is shattered into half a dozen tiny fragments. Any worker with a passing knowledge of the history of Healyism would have been half-witted to see any of this as a vehicle for socialism. Inevitably, in an account like this, the name of Gerry Healy looms large. Nevertheless, we can take comfort from the fact that neither Healy nor his less talented clones represent the essence of the Trotskyist movement. Clique politics operate on idiosyncratic rules, in a land when psychology provides more answers than class analysis. Certainly, before any reasonable tribunal, Healy could seek refuge behind the McNaughton rules. When you think about it, there are suburban tennis clubs with their share of megalomaniac officials.
Do We Need So Many “Vanguards”?
Of greater concern is the fact that, at a time when Stalinism has collapsed, there are more Trotskyist groups than ever before. Practically all of them fall neatly under Marx’s definition of a sect, in that they take as their point of honour that shibboleth that separates them from the movement. There is no organisation that is immaculately constructed no matter how ideologically correct because ideology is not a fixed or finished category. It follows from this that an aggregation of like-minded sects, masquerading as an International, with a capital “I”, cannot substitute for the pathetic inadequacy of its sections. This form of substitutionism leads to disillusion, intrigue, factionalism and further splits, elevating irrelevance to a global scale.
An organisation of tens, a few hundred, or even a few thousands will not succeed unless it gets rid of the dross that has accumulated over the years. It is particularly distressing, for example, that the great rift between defencists and state caps should still generate so much heat. For my part I agree with the sentiments expressed by Ken Tarbuck in a recent letter: “I came to the conclusion that none of the theories were adequate, their main merits were in showing the deficiencies of the opposing views without really taking one forward.” Neither theory has stood the test of real life (incidentally, by the same yardstick, bureaucratic collectivism also looks pretty moth-eaten). It would be nice if there could be a self-denying ordinance, restricting discussion on the class nature of Outer Mongolia to the pub, after the serious business of the meeting had been concluded. Stalinism is gone, capitalism is in crisis and there are distinct signs of a renewal of working class struggle, printing technology is more accessible than ever before (which is one reason why there are so many small groups with their own little journals).
This happy conjunction of circumstances cries out for a united revolutionary organisation, committed to work in and around the class, and equally committed to learn from experience. None of us has all the answers and, when all is said and done, we have nothing to lose but our sectarian chains and a world to win.
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<h2>Jim Higgins</h2>
<h1>The Ideas of Leon Trotsky</h1>
<h3>(Summer 1996)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>Revolutionary History</strong>, <a href="../../../../history/etol/revhist/backissu.htm#v6n2-3" target="new">Vol. 6 No. 2/3</a>, Summer 1996, pp. 265-69.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
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<p class="fst">Hillel Ticktin and Michael Cox (eds.)<br>
<strong>The Ideas of Leon Trotsky</strong><br>
<em>Porcupine Press, London, 1995, pp. 386, £14.95</em></p>
<p class="fst">A QUARTER of a century ago in the publishing world Marxism was big. Almost anything that was not straight Stalinism found a publisher. Menshevik, Austro-Marxist, left Social Democrat, all was grist to the publisher’s mill. In particular, there was a good sale for books by and about Lenin and Trotsky. They led the field, and the rest were also-rans. Those days are long past, but I am pleased to see that genuine quality still sells, and Trotsky is most definitely quality. Indeed, it is clear that in the current popularity stakes he is well ahead of Lenin. It occurred to me, fleetingly, that this might be because Isaac Deutscher wrote three volumes on Trotsky, and Tony Cliff wrote four volumes on Lenin. Then I recalled that Cliff has also written a few volumes on Trotsky, which should have redressed the balance. Poor Lev Davidovich; after a life full of tragedy, that he should suffer the farce of being snipped by Cliff’s scissors and drowned in his paste.</p>
<p><strong>The Ideas of Leon Trotsky</strong>, a selection of articles from <strong>Critique</strong>, is one of the better examples of the genre, although I would not go so far as the editors, who claim in their introduction that it is “the most significant volume ever to be published on Trotsky”. One of the less endearing traits to be found in the revolutionary movement is the making of grandiloquent claims. Gerry Healy, for example, used to claim that he had “the finest political headquarters in Britain”. This would have been true if he had deleted “Britain” and inserted “Clapham High Street”, because it was certainly grander than the Socialist Party of Great Britain’s head office in the same street. Perhaps it would be better to say that it is the most significant volume on Trotsky ever edited by Hillel Ticktin and Michael Cox.</p>
<p>While on the subject of the introduction, it might be as well to include another small niggle. On page one, as part of a generally laudatory paragraph about Trotsky, our editors feel moved to say: “Even his mistakes live on in the works of those who might not even be aware of Trotsky’s contribution to thought.” Try getting your mind round that after a few bottles of Carlsberg Special. Alternatively, try it stone cold sober. It seems to mean that there is someone – I picture an unworldly academic, in the public baths at Syracuse – who cries: “Eureka, I think Stalinist Russia is a workers’ state, better found the Fourth International.” Whether our idiot savant might further decide to stay away from Lenin’s funeral, and regret his failure to militarise labour, probably depends on whether he had overfulfilled his norm of mistakes for that week.</p>
<p>As I say, though, these are really niggles, and the volume here under review is worth having. Whilst the content obviously represents the concerns of the editors, the contributors nevertheless do not all come from the same stable. We have, for example, an article by John Molyneux quite effectively taking Baruch Knei-Paz and his book, <strong>The Social and Political Thought of Leon Trotsky</strong>, to the cleaners (why is it that whenever I hear the name Knei-Paz I think of the protection worn by carpet layers?). Immediately preceding this we have an article by David Law rubbishing Molyneux’s own book, <strong>Leon Trotsky’s Theory of Revolution</strong>. One assumes that this juxtaposition is intentional, but one hopes that it is not intended to cause offence.</p>
<p>This is a collection that is, broadly, attempting to come to terms with the immensely rich, but extremely complicated and sometimes contradictory heritage of Leon Trotsky. Inevitably, it covers a lot of ground that has over almost 70 years been trampled to concrete hardness by the tiny feet of several generations of Trotskyists. The class nature of Russia and the satellites is raised by both Ticktin and Cox, and without too much difficulty they dispose of the “workers’ state” theory. If LDT was in error, he is at least awarded marks for his willingness to shift on the question, and for the indications he made that a Stalinist workers’ state was a special case, limited in time, a contradiction that would inevitably find its resolution in class-based exploitation or a second revolution. The bureaucratic collectivist thesis also comes in for some stick, and whilst state capitalism is not directly attacked, the secondary evidence suggests that at least the Cliff and Dunayevskaya variants are not acceptable either. Which might lead one to ask: “Tell us please, comrade editors, what is this bloody monstrosity then?”</p>
<p>One feels this particularly in an otherwise excellent piece by Michael Cox, <em>Trotsky’s Misinterpreters and the Collapse of Stalinism</em>, in which he gives vent to the following statement: “Trotsky had few problems fending off critics such as Shachtman and Dunayevskaya because both individually and collectively they really didn’t provide much of a theoretical alternative.” Now it is perfectly respectable to prefer Trotsky’s arguments to Dunayevskaya’s state capitalism or Shachtman’s bureaucratic collectivism. The thing you cannot have, however, is Trotsky getting the better of them both, because he did not argue the Russian question with Dunayevskaya, and Shachtman did not adopt the bureaucratic collectivist theory until after LDT’s death. This is slipshod and a pity, because one is preoccupied with the howler, and is liable to miss the meat of the paragraph, which goes on to say something that is both true and needed saying: “This highly charged discussion, however, had a number of unfortunate consequences. Most obviously, it tended to push Trotsky and his followers into an ideologically rigid mould from which they never escaped. It also made the whole debate on Stalinism highly sectarian. Thus what began life as a potentially fruitful dialogue on the left about the nature of Socialism was soon transformed into a sterile fight between ideological militants who neither cared nor listened to what their opponents had to say.” It is an unfortunate fact, here attested by Michael Cox, that each contending theory is far more convincing in its criticism of different evaluations than as a theory in its own right.</p>
<p>The problem, though, was not only that the varying schools of thought could only contend at a distance, beyond the range of sticks and stones, but also that LDT taught his followers that nationalisation, plus planning, plus the monopoly of foreign trade were good and sufficient reasons for a nation to be hall-marked as a workers’ state. For Trotsky it may have been axiomatic that the working class had to be involved in creating this state of affairs, but unfortunately he did not say so. The export to Eastern Europe of these three elements, on the points of Russian bayonets, required orthodox Trotskyists to perform mental gymnastics to account for the post-war reality which would have done severe damage to any psyche less pliable than that of Ernest Mandel. In commenting on this phenomenon in the pages of the <strong>New International</strong> in 1948, Hal Draper quoted the immortal lines of Samuel Hoffenstein:</p>
<table align="center">
<tbody><tr>
<td>
<p class="fst">The small chameleon has the knack,<br>
Of turning blue or green or black.<br>
And yet, whatever hue he don,<br>
He stays a small chameleon.</p>
</td>
</tr>
</tbody></table>
<p class="fst">Lines that have lost none of their resonance over the years.</p>
<p>I particularly liked the essay by Lynne Poole, <em>Lenin and Trotsky: A Question of Organisational Form</em>, even if I hated the title. It argues persuasively that in the pre-1917 disputes, Lenin did not always have the best of the exchanges. This, of course, flies not only in the face of received wisdom in our tradition, but also the words of Trotsky himself. Regardless of all that, I confess I am with Lynne Poole on this one. It really is well past the time when we should stop making shamefaced excuses for <strong>What Is To Be Done?</strong>. Trotsky and Luxemburg were undoubtedly correct in their criticisms. It is an interesting fact of revolutionary group life that every small-time autocrat shows great enthusiasm for this work. Not only must the Socialist message be brought down from on high to the workers by benevolent non-proletarians, but it must be done again and again and again. Such munificence must, naturally, be rewarded by leadership, preferably in perpetuity. What can only be justified, if then, by the special case of Tsarist Russia acquires, for the faithful, all the strength of an Eleventh Commandment with universal application. In the process, great chunks of Marxism, like the dialectic, are flushed away. Incidentally, another slightly different, but also excellent, treatment of this subject is to be found in Duncan Hallas’ article <em>Building the Revolutionary Party</em> (<strong>International Socialism</strong>, no.79, June 1975). This, which purports to be a review of the first volume of Cliff’s <strong>Lenin</strong>, is both eminently sane and a salutary lesson in tightrope walking that would have made Blondin look a right amateur.</p>
<p>I am also indebted to Lynne Poole for calling to attention another example of Tony Cliff’s increasingly spastic sleights of hand. She mentions an article of 1901, that Trotsky had written in favour of a strong Central Committee, even going so far as to suggest that branches failing to accept the CC’s instructions should be cut off from the party. Unfortunately, this particular piece has been lost, and the sole evidence for its existence is Trotsky’s <strong>Report of the Siberian Delegation</strong>. Here Trotsky specifically refutes his article of 1901 in favour of the position set out in <strong>Our Political Tasks</strong>. This disavowed article of 1901 is, according to Cliff, Trotsky’s real position, and his attack on <strong>What Is To Be Done?</strong> was merely an expression of his affection for Martov. The reason for Cliff’s retailing this load of old cobblers is probably because some years ago in the first flush of his renewed love affair with Vladimir Ilyich, while writing Volume One of his Lenin biography, Trotsky came off rather badly in the text. In his more recent biography of Trotsky, the main character emerges unsullied, a closet Bolshevik all the time. If this fantasy is intended to aggrandise Trotsky, it does nothing of the sort. We are expected to believe that LDT, a man of unflinching dedication to his politics, should have spent 14 years perpetuating a split with a powerful co-thinker, because Lenin had been nasty to his chum Martov. The notion is as insulting as it is grotesque. Apart from anything else, if there had been any truth in this story, it is certain that Trotsky would have found a way to use it in his defence against the accusations of anti-Bolshevism levelled by Stalin in the 1920s.</p>
<p>Trotsky’s conversion to Bolshevism, when it came, was root and branch. His encomium, “without the party we are nothing”, despite its all-embracing character, applies to just one party, the CPSU(b), and that judgement was time-bound in application. When it failed he built, in microcosm, parties on the same model, and, possibly because it was the only way he could play a rôle, there must be an International, a world centre to direct the coming revolution. To construct a chain with a small collection of weak links is to ensure that, at the first sign of strain, it will break into even smaller chains. The Fourth International is the (I almost said “living”) proof of this assertion. Given a certain generosity with the assumptions, it is of course a powerful idea, and one that still exercises the minds of some people; the break-up of the Workers Revolutionary Party, in the wake of Gerry Healy’s expulsion, has let loose on the world several additional sets of people, rebuilding, or reconstructing, or whatever you do to get a Fourth International. Experience does, however, suggest that proclamation is as good a method as any.</p>
<p>Trotsky at least had the justification that, for him, capitalism was in its death agony and Stalinism would not survive the hammer blows of war; therefore the Fourth International had to be in place to try and lead the revolution. Unfortunately, when the war did come, the thing that succumbed first was the Fourth International, under the impact of Russia’s pre-emptive annexation of the Karelian Isthmus, which in terms of world war was hardly a hammer blow. Nevertheless, for Trotsky the stark choice was Socialism or barbarism, and no one else was even aware that a choice had to be made. What for him was a duty, an obligation, for his latter day disciples is more of a hobby. There are few things better calculated to keep a chap out of mischief than working up a few theses on the world economy, or revolutionary prospects in faraway countries of which he knows little.</p>
<p>Of some interest too is Susan Weissman’s article, <em>The Left Opposition Divided: The Trotsky-Serge Disputes</em> – you will have gathered that the titles given to the articles are not the most inspired part of this volume – in which she details the rather extreme abuse that Trotsky heaped on the unfortunate Victor’s head, in such phrases as: “What do people of the Victor Serge type represent? ... these verbose, coquettish moralists, capable of bringing only trouble and decay, must be kept out of the revolutionary organisation even by cannon fire if necessary.” Susan Weissman suggests that some of this was due to misunderstanding, and some due to the machinations of Étienne (Mark Zborowski), Stalin’s agent in the Left Opposition in Paris, and she is probably right. What she does not mention is the fact that a number of people in Europe, including Trotsky’s son Sedov, were suspicious of the circumstances of Serge’s escape from Stalin’s clutches. Elizabeth Poretsky, who was married to Ignace Reiss, in her book, <strong>Our Own People</strong>, indicates that she wrote a report for Trotsky on Serge’s laxness in security matters. Walter Krivitsky also wrote a report for Trotsky, in which he came to the conclusion that Serge was a GPU agent. Henk Sneevliet, too, was convinced that there was a Stalinist agent in Sedov’s circle, finally and correctly concluding that it was Étienne. In all this welter of suspicion and accusation, very little of it susceptible to genuine proof, it was possible to see political disagreements as part of a cunning plan to sow discord in the ranks. Perhaps Serge was one of those innocents who needlessly suffered in an atmosphere poisoned by Stalinist terror.</p>
<p>There is much more in this book that is interesting, stimulating and provocative. Paul Flewers has done an excellent job in producing a clean and attractive text. The cover, on the other hand, is a bit weird; it has a picture of Trotsky’s head wearing what looks like an astrakhan hat, which is in the process of melting all over his face. I know astrakhan hats do not melt, but this it what it looks like. On closer inspection, the offending fur turns out to be people’s heads. Perhaps I am old fashioned, but the symbolism of all this escapes me.</p>
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MIA > Archive > Higgins
Jim Higgins
The Ideas of Leon Trotsky
(Summer 1996)
From Revolutionary History, Vol. 6 No. 2/3, Summer 1996, pp. 265-69.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Hillel Ticktin and Michael Cox (eds.)
The Ideas of Leon Trotsky
Porcupine Press, London, 1995, pp. 386, £14.95
A QUARTER of a century ago in the publishing world Marxism was big. Almost anything that was not straight Stalinism found a publisher. Menshevik, Austro-Marxist, left Social Democrat, all was grist to the publisher’s mill. In particular, there was a good sale for books by and about Lenin and Trotsky. They led the field, and the rest were also-rans. Those days are long past, but I am pleased to see that genuine quality still sells, and Trotsky is most definitely quality. Indeed, it is clear that in the current popularity stakes he is well ahead of Lenin. It occurred to me, fleetingly, that this might be because Isaac Deutscher wrote three volumes on Trotsky, and Tony Cliff wrote four volumes on Lenin. Then I recalled that Cliff has also written a few volumes on Trotsky, which should have redressed the balance. Poor Lev Davidovich; after a life full of tragedy, that he should suffer the farce of being snipped by Cliff’s scissors and drowned in his paste.
The Ideas of Leon Trotsky, a selection of articles from Critique, is one of the better examples of the genre, although I would not go so far as the editors, who claim in their introduction that it is “the most significant volume ever to be published on Trotsky”. One of the less endearing traits to be found in the revolutionary movement is the making of grandiloquent claims. Gerry Healy, for example, used to claim that he had “the finest political headquarters in Britain”. This would have been true if he had deleted “Britain” and inserted “Clapham High Street”, because it was certainly grander than the Socialist Party of Great Britain’s head office in the same street. Perhaps it would be better to say that it is the most significant volume on Trotsky ever edited by Hillel Ticktin and Michael Cox.
While on the subject of the introduction, it might be as well to include another small niggle. On page one, as part of a generally laudatory paragraph about Trotsky, our editors feel moved to say: “Even his mistakes live on in the works of those who might not even be aware of Trotsky’s contribution to thought.” Try getting your mind round that after a few bottles of Carlsberg Special. Alternatively, try it stone cold sober. It seems to mean that there is someone – I picture an unworldly academic, in the public baths at Syracuse – who cries: “Eureka, I think Stalinist Russia is a workers’ state, better found the Fourth International.” Whether our idiot savant might further decide to stay away from Lenin’s funeral, and regret his failure to militarise labour, probably depends on whether he had overfulfilled his norm of mistakes for that week.
As I say, though, these are really niggles, and the volume here under review is worth having. Whilst the content obviously represents the concerns of the editors, the contributors nevertheless do not all come from the same stable. We have, for example, an article by John Molyneux quite effectively taking Baruch Knei-Paz and his book, The Social and Political Thought of Leon Trotsky, to the cleaners (why is it that whenever I hear the name Knei-Paz I think of the protection worn by carpet layers?). Immediately preceding this we have an article by David Law rubbishing Molyneux’s own book, Leon Trotsky’s Theory of Revolution. One assumes that this juxtaposition is intentional, but one hopes that it is not intended to cause offence.
This is a collection that is, broadly, attempting to come to terms with the immensely rich, but extremely complicated and sometimes contradictory heritage of Leon Trotsky. Inevitably, it covers a lot of ground that has over almost 70 years been trampled to concrete hardness by the tiny feet of several generations of Trotskyists. The class nature of Russia and the satellites is raised by both Ticktin and Cox, and without too much difficulty they dispose of the “workers’ state” theory. If LDT was in error, he is at least awarded marks for his willingness to shift on the question, and for the indications he made that a Stalinist workers’ state was a special case, limited in time, a contradiction that would inevitably find its resolution in class-based exploitation or a second revolution. The bureaucratic collectivist thesis also comes in for some stick, and whilst state capitalism is not directly attacked, the secondary evidence suggests that at least the Cliff and Dunayevskaya variants are not acceptable either. Which might lead one to ask: “Tell us please, comrade editors, what is this bloody monstrosity then?”
One feels this particularly in an otherwise excellent piece by Michael Cox, Trotsky’s Misinterpreters and the Collapse of Stalinism, in which he gives vent to the following statement: “Trotsky had few problems fending off critics such as Shachtman and Dunayevskaya because both individually and collectively they really didn’t provide much of a theoretical alternative.” Now it is perfectly respectable to prefer Trotsky’s arguments to Dunayevskaya’s state capitalism or Shachtman’s bureaucratic collectivism. The thing you cannot have, however, is Trotsky getting the better of them both, because he did not argue the Russian question with Dunayevskaya, and Shachtman did not adopt the bureaucratic collectivist theory until after LDT’s death. This is slipshod and a pity, because one is preoccupied with the howler, and is liable to miss the meat of the paragraph, which goes on to say something that is both true and needed saying: “This highly charged discussion, however, had a number of unfortunate consequences. Most obviously, it tended to push Trotsky and his followers into an ideologically rigid mould from which they never escaped. It also made the whole debate on Stalinism highly sectarian. Thus what began life as a potentially fruitful dialogue on the left about the nature of Socialism was soon transformed into a sterile fight between ideological militants who neither cared nor listened to what their opponents had to say.” It is an unfortunate fact, here attested by Michael Cox, that each contending theory is far more convincing in its criticism of different evaluations than as a theory in its own right.
The problem, though, was not only that the varying schools of thought could only contend at a distance, beyond the range of sticks and stones, but also that LDT taught his followers that nationalisation, plus planning, plus the monopoly of foreign trade were good and sufficient reasons for a nation to be hall-marked as a workers’ state. For Trotsky it may have been axiomatic that the working class had to be involved in creating this state of affairs, but unfortunately he did not say so. The export to Eastern Europe of these three elements, on the points of Russian bayonets, required orthodox Trotskyists to perform mental gymnastics to account for the post-war reality which would have done severe damage to any psyche less pliable than that of Ernest Mandel. In commenting on this phenomenon in the pages of the New International in 1948, Hal Draper quoted the immortal lines of Samuel Hoffenstein:
The small chameleon has the knack,
Of turning blue or green or black.
And yet, whatever hue he don,
He stays a small chameleon.
Lines that have lost none of their resonance over the years.
I particularly liked the essay by Lynne Poole, Lenin and Trotsky: A Question of Organisational Form, even if I hated the title. It argues persuasively that in the pre-1917 disputes, Lenin did not always have the best of the exchanges. This, of course, flies not only in the face of received wisdom in our tradition, but also the words of Trotsky himself. Regardless of all that, I confess I am with Lynne Poole on this one. It really is well past the time when we should stop making shamefaced excuses for What Is To Be Done?. Trotsky and Luxemburg were undoubtedly correct in their criticisms. It is an interesting fact of revolutionary group life that every small-time autocrat shows great enthusiasm for this work. Not only must the Socialist message be brought down from on high to the workers by benevolent non-proletarians, but it must be done again and again and again. Such munificence must, naturally, be rewarded by leadership, preferably in perpetuity. What can only be justified, if then, by the special case of Tsarist Russia acquires, for the faithful, all the strength of an Eleventh Commandment with universal application. In the process, great chunks of Marxism, like the dialectic, are flushed away. Incidentally, another slightly different, but also excellent, treatment of this subject is to be found in Duncan Hallas’ article Building the Revolutionary Party (International Socialism, no.79, June 1975). This, which purports to be a review of the first volume of Cliff’s Lenin, is both eminently sane and a salutary lesson in tightrope walking that would have made Blondin look a right amateur.
I am also indebted to Lynne Poole for calling to attention another example of Tony Cliff’s increasingly spastic sleights of hand. She mentions an article of 1901, that Trotsky had written in favour of a strong Central Committee, even going so far as to suggest that branches failing to accept the CC’s instructions should be cut off from the party. Unfortunately, this particular piece has been lost, and the sole evidence for its existence is Trotsky’s Report of the Siberian Delegation. Here Trotsky specifically refutes his article of 1901 in favour of the position set out in Our Political Tasks. This disavowed article of 1901 is, according to Cliff, Trotsky’s real position, and his attack on What Is To Be Done? was merely an expression of his affection for Martov. The reason for Cliff’s retailing this load of old cobblers is probably because some years ago in the first flush of his renewed love affair with Vladimir Ilyich, while writing Volume One of his Lenin biography, Trotsky came off rather badly in the text. In his more recent biography of Trotsky, the main character emerges unsullied, a closet Bolshevik all the time. If this fantasy is intended to aggrandise Trotsky, it does nothing of the sort. We are expected to believe that LDT, a man of unflinching dedication to his politics, should have spent 14 years perpetuating a split with a powerful co-thinker, because Lenin had been nasty to his chum Martov. The notion is as insulting as it is grotesque. Apart from anything else, if there had been any truth in this story, it is certain that Trotsky would have found a way to use it in his defence against the accusations of anti-Bolshevism levelled by Stalin in the 1920s.
Trotsky’s conversion to Bolshevism, when it came, was root and branch. His encomium, “without the party we are nothing”, despite its all-embracing character, applies to just one party, the CPSU(b), and that judgement was time-bound in application. When it failed he built, in microcosm, parties on the same model, and, possibly because it was the only way he could play a rôle, there must be an International, a world centre to direct the coming revolution. To construct a chain with a small collection of weak links is to ensure that, at the first sign of strain, it will break into even smaller chains. The Fourth International is the (I almost said “living”) proof of this assertion. Given a certain generosity with the assumptions, it is of course a powerful idea, and one that still exercises the minds of some people; the break-up of the Workers Revolutionary Party, in the wake of Gerry Healy’s expulsion, has let loose on the world several additional sets of people, rebuilding, or reconstructing, or whatever you do to get a Fourth International. Experience does, however, suggest that proclamation is as good a method as any.
Trotsky at least had the justification that, for him, capitalism was in its death agony and Stalinism would not survive the hammer blows of war; therefore the Fourth International had to be in place to try and lead the revolution. Unfortunately, when the war did come, the thing that succumbed first was the Fourth International, under the impact of Russia’s pre-emptive annexation of the Karelian Isthmus, which in terms of world war was hardly a hammer blow. Nevertheless, for Trotsky the stark choice was Socialism or barbarism, and no one else was even aware that a choice had to be made. What for him was a duty, an obligation, for his latter day disciples is more of a hobby. There are few things better calculated to keep a chap out of mischief than working up a few theses on the world economy, or revolutionary prospects in faraway countries of which he knows little.
Of some interest too is Susan Weissman’s article, The Left Opposition Divided: The Trotsky-Serge Disputes – you will have gathered that the titles given to the articles are not the most inspired part of this volume – in which she details the rather extreme abuse that Trotsky heaped on the unfortunate Victor’s head, in such phrases as: “What do people of the Victor Serge type represent? ... these verbose, coquettish moralists, capable of bringing only trouble and decay, must be kept out of the revolutionary organisation even by cannon fire if necessary.” Susan Weissman suggests that some of this was due to misunderstanding, and some due to the machinations of Étienne (Mark Zborowski), Stalin’s agent in the Left Opposition in Paris, and she is probably right. What she does not mention is the fact that a number of people in Europe, including Trotsky’s son Sedov, were suspicious of the circumstances of Serge’s escape from Stalin’s clutches. Elizabeth Poretsky, who was married to Ignace Reiss, in her book, Our Own People, indicates that she wrote a report for Trotsky on Serge’s laxness in security matters. Walter Krivitsky also wrote a report for Trotsky, in which he came to the conclusion that Serge was a GPU agent. Henk Sneevliet, too, was convinced that there was a Stalinist agent in Sedov’s circle, finally and correctly concluding that it was Étienne. In all this welter of suspicion and accusation, very little of it susceptible to genuine proof, it was possible to see political disagreements as part of a cunning plan to sow discord in the ranks. Perhaps Serge was one of those innocents who needlessly suffered in an atmosphere poisoned by Stalinist terror.
There is much more in this book that is interesting, stimulating and provocative. Paul Flewers has done an excellent job in producing a clean and attractive text. The cover, on the other hand, is a bit weird; it has a picture of Trotsky’s head wearing what looks like an astrakhan hat, which is in the process of melting all over his face. I know astrakhan hats do not melt, but this it what it looks like. On closer inspection, the offending fur turns out to be people’s heads. Perhaps I am old fashioned, but the symbolism of all this escapes me.
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<h2>Jim Higgins</h2>
<h1>A Day with the Leadership</h1>
<h3>(March 1968)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>Labour Worker</strong>, March 1968.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">In the last ten years it has been my pleasure to attend conferences organised either directly by the Socialist Labour League or through one of its rapidly changing front organisations. Each conference was hailed as the most important working class gatherings to date, each conference hailed the new revolutionary leadership and at various times the cadre was to be replenished and expanded from dockers, building workers, the ‘revolutionary youth’, and, more recently, the left MP’s.</p>
<p>It is my impression that SLL conferences are not what they used to be. Perhaps time is lending glamour to a failing memory, but the first such event I attended (the <strong>Newsletter</strong> Conference of 1958) was the best of the lot. The maturity of the delegates and the quality of their contributions was matched by the ability of the platform, which included Peter Fryer, Brian Behan and Harry Constable (all of them long gone from Clapham High Street).</p>
<p>Measured by this standard, the February 3rd conference, held under the auspices of the Oxford Liaison Committee for the Defence of Trade Unionism, was a sad degeneration. The speeches were poor stuff, many of the speakers were distinctly ‘revolutionary youth’ and a recent levy at that, the numbers were down and the platform speaker who announced 550 delegates should clearly stop counting feet and start counting heads.</p>
<p>Now obviously these are not major questions for complaint. Numbers are not crucial to a successful conference and bad speeches which contain some thought and an attempt to contribute from real experience are always worthwhile. There were, however, only two such speeches – one from a provincial busman and another from R Hamilton of DATA.</p>
<p>The first gave some indication of the difficulties in the busman’s fight. He explained how an overtime ban that took a third of the buses off the road resulted in far more work for the busmen, while revenue was little affected because more people crowded on the buses that remained on the road. The final decision to strike, with its consequent complete shutting off of revenue, brought the employers to heel in short order. This victory is real even though Cousin’s grotesque resort to the courts will obviously squander much of the advantage gained.</p>
<p>Bob Hamilton made a closely reasoned and factual speech on the shipbuilding consortia on the Clyde and the employer/trade union leader drive for rationalisation and speed-up.</p>
<p>That however was the lot and two speeches do not make a conference. For the rest we were treated to a farrago of ill-connected nonsense. The need for leadership renewal ran through the proceedings like Andrews through the alimentary tract. This intangible quality was seen to reside in the queerest places, at one stage it was the SLL, at another the Young Socialists and at another it was being constructed that very day in the deliberations.</p>
<p>The Communist Party came in for its well-merited share of abuse (can it stand much more of this and live?) With some knockabout comedy at the expense of Dick Etheridge, which seemed to go down well with the locals. A new demon on the SLL index of untouchables is, apparently the ‘syndicalists’. At the first intimation of Healy’s latest anathema I was puzzled, assuming that the reference was to the few organised anarcho-syndicalists still extant, but by paying close attention I was able to unravel the mystery.</p>
<p>The fractured logic seems to go something like this: syndicalists are anti-politics; the only real politics are SLL politics; therefore if you are opposed to SLL politics you are a syndicalist. As my old school-master used to say, there is a brain at work somewhere.</p>
<p>Another piece of frivolity that had the faithful rolling in the aisles was the suggestion (seriously intended apparently) to reconvene the Labour party conference. This, it seems, is part of the campaign to expose the Wilson administration; that Wilson can no further on the road to self-exposure without eviscerating himself seems to be missed by the rising new leadership.</p>
<p>A touch of light relief (and it was needed) came when an unemployed worker told the conference that the only organisation to help the unemployed was the ‘Socialist Labour Party’, a statement that may please the shade of De Leon, but is unlikely to win friends in the Socialist Labour League.</p>
<p>But what comes out of all in this case is a meaningless committee with pretensions to national leadership firmly under the control of the SLL. The opportunist politics are the same; only the focus has been slightly shifted. The problems half raised and badly analysed at the conference do exist. But the fight against the employers and the Government is not helped by the arrogant assumption of leadership by those who have the greatest difficulty in coherently putting over their policy, particularly when that policy is an attempt to graft on to the actual needs of the situation the special interests of a small but hysterically vociferous organisation.</p>
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MIA > Archive > Higgins
Jim Higgins
A Day with the Leadership
(March 1968)
From Labour Worker, March 1968.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
In the last ten years it has been my pleasure to attend conferences organised either directly by the Socialist Labour League or through one of its rapidly changing front organisations. Each conference was hailed as the most important working class gatherings to date, each conference hailed the new revolutionary leadership and at various times the cadre was to be replenished and expanded from dockers, building workers, the ‘revolutionary youth’, and, more recently, the left MP’s.
It is my impression that SLL conferences are not what they used to be. Perhaps time is lending glamour to a failing memory, but the first such event I attended (the Newsletter Conference of 1958) was the best of the lot. The maturity of the delegates and the quality of their contributions was matched by the ability of the platform, which included Peter Fryer, Brian Behan and Harry Constable (all of them long gone from Clapham High Street).
Measured by this standard, the February 3rd conference, held under the auspices of the Oxford Liaison Committee for the Defence of Trade Unionism, was a sad degeneration. The speeches were poor stuff, many of the speakers were distinctly ‘revolutionary youth’ and a recent levy at that, the numbers were down and the platform speaker who announced 550 delegates should clearly stop counting feet and start counting heads.
Now obviously these are not major questions for complaint. Numbers are not crucial to a successful conference and bad speeches which contain some thought and an attempt to contribute from real experience are always worthwhile. There were, however, only two such speeches – one from a provincial busman and another from R Hamilton of DATA.
The first gave some indication of the difficulties in the busman’s fight. He explained how an overtime ban that took a third of the buses off the road resulted in far more work for the busmen, while revenue was little affected because more people crowded on the buses that remained on the road. The final decision to strike, with its consequent complete shutting off of revenue, brought the employers to heel in short order. This victory is real even though Cousin’s grotesque resort to the courts will obviously squander much of the advantage gained.
Bob Hamilton made a closely reasoned and factual speech on the shipbuilding consortia on the Clyde and the employer/trade union leader drive for rationalisation and speed-up.
That however was the lot and two speeches do not make a conference. For the rest we were treated to a farrago of ill-connected nonsense. The need for leadership renewal ran through the proceedings like Andrews through the alimentary tract. This intangible quality was seen to reside in the queerest places, at one stage it was the SLL, at another the Young Socialists and at another it was being constructed that very day in the deliberations.
The Communist Party came in for its well-merited share of abuse (can it stand much more of this and live?) With some knockabout comedy at the expense of Dick Etheridge, which seemed to go down well with the locals. A new demon on the SLL index of untouchables is, apparently the ‘syndicalists’. At the first intimation of Healy’s latest anathema I was puzzled, assuming that the reference was to the few organised anarcho-syndicalists still extant, but by paying close attention I was able to unravel the mystery.
The fractured logic seems to go something like this: syndicalists are anti-politics; the only real politics are SLL politics; therefore if you are opposed to SLL politics you are a syndicalist. As my old school-master used to say, there is a brain at work somewhere.
Another piece of frivolity that had the faithful rolling in the aisles was the suggestion (seriously intended apparently) to reconvene the Labour party conference. This, it seems, is part of the campaign to expose the Wilson administration; that Wilson can no further on the road to self-exposure without eviscerating himself seems to be missed by the rising new leadership.
A touch of light relief (and it was needed) came when an unemployed worker told the conference that the only organisation to help the unemployed was the ‘Socialist Labour Party’, a statement that may please the shade of De Leon, but is unlikely to win friends in the Socialist Labour League.
But what comes out of all in this case is a meaningless committee with pretensions to national leadership firmly under the control of the SLL. The opportunist politics are the same; only the focus has been slightly shifted. The problems half raised and badly analysed at the conference do exist. But the fight against the employers and the Government is not helped by the arrogant assumption of leadership by those who have the greatest difficulty in coherently putting over their policy, particularly when that policy is an attempt to graft on to the actual needs of the situation the special interests of a small but hysterically vociferous organisation.
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<h2>Jim Higgins</h2>
<h1>R.P. Dutt: Stalin’s British Mouthpiece</h1>
<h3>(February 1975)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Socialism</strong> (1st series), <a href="../../../../history/etol/newspape/isj/index3.html#isj075" target="new">No.75</a>, February 1975.<br>
Transcribed by Mike Pearn.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="quoteb"><strong>“He was the working class in action, with all the shackles and fetters fallen: he was the spirit of the future age living and acting today. And therefore, workers of the world do honour and will do honour to all that is most real and most imperishable in themselves and their own future.”</strong></p>
<p class="fst">Thus Rajani Palme Dutt in his final paragraph to an obituary of Lenin, published in April, 1924. It would be pleasant to say something, less grandiloquent perhaps, of like of Palme Dutt himself, now that he too is dead, if only because it is customary and well mannered. Unfortunately that is not possible. In his 60-odd years in the movement Dutt provides an object lesson in the politics of Stalinism and the abuse of great talent, in the service of those politics.</p>
<p>Born in 1889, he took a first class honours degree at Oxford but a promising academic career was blasted when he was sent down for opposition to the 1914-18 war. In 1919 he was made international secretary of the Labour Research Department, a post where he contracted his life long love of all things Russian. A foundation member of the Communist Party, he almost certainly owed his advancement to his Russian connection. Despite his comparative youth and lack of following in the party he became in 1921, editor of the theoretical magazine <strong>Labour Monthly</strong>. The following year he was appointed chairman of the party commission on organisation. Together with Harry Pollitt and Hubert Inkpin he was charged with the task of implementing the organisational theses of the Comintern. After six months of almost continuous session Dutt drafted the report that was accepted without dissent by a special party conference. In many ways the report went a long way to overcome the loose federalism of the party’s geographical branches. Functional work groups, with effective command structures and reporting were established. Nevertheless, the report had a strong “Russian” flavour, in content if not in style. Not all the recommendations were implemented and even so subsequent party congresses were much exercised, mitigating the rigours of the “Dutt-Pollitt” report.</p>
<p>In the streamlined “bolshevised” party that came out of the re-organisation, all three signatories reaped the reward of their work. Inkpin was elected chairman of the Central Control Commission Dutt and Pollitt were elected to the party executive. Thus started the long and close association between Dutt and Pollitt. Palme Dutt, the cool intellectual with a facility for theoretical exposition, with friends in the Kremlin and Pollitt the talented mass agitator and organiser.</p>
<p>As a member of the executive and editor of <strong>Labour Monthly</strong> Dutt occupied the role of leading theoretician as populariser and apologist for the line of the Comintern in whatever direction it happened to be moving. <strong>Labour Monthly</strong> in the early years was required reading for anyone with a theoretical turn of mind and a desire to see theory turned into practice. At one time or another almost every ‘left’ wrote for the magazine, and in the process exposed themselves more effectively than volumes of marxist critique. At no time, however, did <strong>Labour Monthly</strong> stray far from the line of Palme Dutt’s Russian mentors. Not a single zig of Comintern policy, not yet a zag or even both at the same time failed to find support in the <em>Notes of the Month</em> modestly signed “RPD”. The Anglo-Russian Committee, policy towards the TUC “lefts”, the so-called “third period” policy of “class against class” and the “popular front”, all were joyfully taken on board and extolled as the latest revealed truth. Even so if the Notes were long, complex and seemed more an exercise in squaring the circle than dialectics they were interesting if only to try and see how the trick was done.</p>
<p>As a fluent Russian speaker Dutt was well placed as a link with and interpreter of the directives emanating from Moscow. That this was not always appreciated by less loftily connected comrades is evident from the words of Ernie Cant (London District Secretary): “... once again Comrade Dutt intervenes at the last minute in a party discussion, crossing the t’s and dotting the i’s and giving pontifical blessing to Comrade Pollitt. But Comrade Dutt has not only been divorced from the masses he has been divorced from the actual life of the party for a considerable period – he knows only resolutions, theses, ballot results and newspaper clippings.” But as every Catholic knows and perhaps Ernie cant had forgotten, the “pontiff” gets his authority from God. RPD’s deity was in Moscow and smiling on his protegé.</p>
<p>Interestingly enough the dispute that occasioned Cant’s outburst occurred in 1929. It concerned the lack of fervour with which the British CP leadership were introducing the “third period” policy. Dutt, Page Arnot and J.T. Murphy led the “ultra left” opposition of Comintern loyalists. So acrimonious did the dispute become that it finally had to be sorted out in Moscow. There the majority of the leadership were transformed into a minority. Harry Pollitt who changed sides just in time was made party secretary, the dissident ex-leadership being dumped.</p>
<p>Always a prolific writer, Dutt was in his element justifying the unjustifiable during the whole of the “third period”. If party membership declined, and it did, the party was stronger, because purer. If fascism succeeded in Germany, all to the good because: “After Hitler, us”. In this last context Dutt spent some time preparing a book proving the objectively fascist nature of social democracy, only to find that when the volume was published the “third period” had evaporated into the gaseous vapours of the “popular front”. The prospect of such a failure of vision must disturb the sleep of all votaries of capricious gods.</p>
<p>But the lurch from ultra-left idiocy of “social fascism” to the social pacifism of the “popular front” was a contradiction easily encompassed in Dutt’s own special dialectic.</p>
<p>Together with D.N. Pritt he was an enthusiastic apologist for the Moscow frame-up trials. Russian communists he had known, some as friends, disappeared in the horror of the great purge, not a words, not a whisper escaped Dutt’s lips or his pen to indicate anything but peace and socialist construction were going on in Russia under the avuncular beneficence of Joe Stalin.</p>
<p>The fruitful partnership with Harry Pollitt was interrupted in 1939. Harry with a logicality that years or training had failed to completely overcome had decided, at the outbreak of hostilities, that the war being against fascists must be, an anti-fascist war and so proclaimed it. He had, however, neglected the fact that the Stalin-Ribbentrop pact had been signed. Germany and Russia had a non-aggression pact. Palme Dutt, more versed in the signals, characterised the war as “imperialist”. Pollitt was removed from the secretaryship and returned to boilermaking, while Dutt took over his job, a situation that lasted until Russia entered the war when its character was immediately transformed into an anti-fascist crusade.</p>
<p>To chronicle each twist and turn of Palme Dutt’s devotion to the line from Moscow would be repetitive and tedious. Suffice to say his last big service to the Russian comrades was in 1956 when he stumped the country, attempting to calm the fears of party members distressed by Khruschev’s revelations at the 20th Party Congress and the Russian crushing of the Hungarian revolution. Palme Dutt’s discourse in justification of Stalin, was know as the “spots on the sun” speech. The sun, according to Dutt, is the source of energy, life, growth and was an all round good thing to have, nevertheless, there are spots on the sun: so it was with Stalin. The argument , for once, did not go down well with the comrades. Over 7,000 left the party and the monolith cracked in a way that defied restoration.</p>
<p>Dutt went on of course, he still edited <strong>Labour Monthly</strong> and wrote his increasingly tedious <em>Notes of the Month</em>. But it was not the same. Russians with H bombs and Sputniks have less need of foreign communist parties. The central links weakened, the party virtually rudderless, discipline almost non-existent, Palme Dutt’s last days must have been sad indeed. He surfaced briefly in 1969 to attack the party leadership for not supporting the Russian invasion of Czechoslovakia at the party congress that year. It was a last very faint hurrah.</p>
<p>Intellectually Palme Dutt had all the equipment for penetrating analysis and a dedication worthy of better causes. He lived through and did his small part in assisting the degeneration of official Communism into the grotesque caricature that it is today.</p>
<p>It is appropriate to conclude by quoting again from RPD’s obituary of Lenin, words that were strikingly prophetic and that he would have done well to have taken to heart.</p>
<p>“Hideous things will be proclaimed and advocated in the name of Leninism. All the traitors to socialist principles will endeavour to hide themselves behind the man who was bigger than formulas. The audacious compromises of an indomitable fighter will be made the excuse for the dirty compacts of petty bargainers and timid self-seekers.” How very true.</p>
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MIA > Archive > Higgins
Jim Higgins
R.P. Dutt: Stalin’s British Mouthpiece
(February 1975)
From International Socialism (1st series), No.75, February 1975.
Transcribed by Mike Pearn.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
“He was the working class in action, with all the shackles and fetters fallen: he was the spirit of the future age living and acting today. And therefore, workers of the world do honour and will do honour to all that is most real and most imperishable in themselves and their own future.”
Thus Rajani Palme Dutt in his final paragraph to an obituary of Lenin, published in April, 1924. It would be pleasant to say something, less grandiloquent perhaps, of like of Palme Dutt himself, now that he too is dead, if only because it is customary and well mannered. Unfortunately that is not possible. In his 60-odd years in the movement Dutt provides an object lesson in the politics of Stalinism and the abuse of great talent, in the service of those politics.
Born in 1889, he took a first class honours degree at Oxford but a promising academic career was blasted when he was sent down for opposition to the 1914-18 war. In 1919 he was made international secretary of the Labour Research Department, a post where he contracted his life long love of all things Russian. A foundation member of the Communist Party, he almost certainly owed his advancement to his Russian connection. Despite his comparative youth and lack of following in the party he became in 1921, editor of the theoretical magazine Labour Monthly. The following year he was appointed chairman of the party commission on organisation. Together with Harry Pollitt and Hubert Inkpin he was charged with the task of implementing the organisational theses of the Comintern. After six months of almost continuous session Dutt drafted the report that was accepted without dissent by a special party conference. In many ways the report went a long way to overcome the loose federalism of the party’s geographical branches. Functional work groups, with effective command structures and reporting were established. Nevertheless, the report had a strong “Russian” flavour, in content if not in style. Not all the recommendations were implemented and even so subsequent party congresses were much exercised, mitigating the rigours of the “Dutt-Pollitt” report.
In the streamlined “bolshevised” party that came out of the re-organisation, all three signatories reaped the reward of their work. Inkpin was elected chairman of the Central Control Commission Dutt and Pollitt were elected to the party executive. Thus started the long and close association between Dutt and Pollitt. Palme Dutt, the cool intellectual with a facility for theoretical exposition, with friends in the Kremlin and Pollitt the talented mass agitator and organiser.
As a member of the executive and editor of Labour Monthly Dutt occupied the role of leading theoretician as populariser and apologist for the line of the Comintern in whatever direction it happened to be moving. Labour Monthly in the early years was required reading for anyone with a theoretical turn of mind and a desire to see theory turned into practice. At one time or another almost every ‘left’ wrote for the magazine, and in the process exposed themselves more effectively than volumes of marxist critique. At no time, however, did Labour Monthly stray far from the line of Palme Dutt’s Russian mentors. Not a single zig of Comintern policy, not yet a zag or even both at the same time failed to find support in the Notes of the Month modestly signed “RPD”. The Anglo-Russian Committee, policy towards the TUC “lefts”, the so-called “third period” policy of “class against class” and the “popular front”, all were joyfully taken on board and extolled as the latest revealed truth. Even so if the Notes were long, complex and seemed more an exercise in squaring the circle than dialectics they were interesting if only to try and see how the trick was done.
As a fluent Russian speaker Dutt was well placed as a link with and interpreter of the directives emanating from Moscow. That this was not always appreciated by less loftily connected comrades is evident from the words of Ernie Cant (London District Secretary): “... once again Comrade Dutt intervenes at the last minute in a party discussion, crossing the t’s and dotting the i’s and giving pontifical blessing to Comrade Pollitt. But Comrade Dutt has not only been divorced from the masses he has been divorced from the actual life of the party for a considerable period – he knows only resolutions, theses, ballot results and newspaper clippings.” But as every Catholic knows and perhaps Ernie cant had forgotten, the “pontiff” gets his authority from God. RPD’s deity was in Moscow and smiling on his protegé.
Interestingly enough the dispute that occasioned Cant’s outburst occurred in 1929. It concerned the lack of fervour with which the British CP leadership were introducing the “third period” policy. Dutt, Page Arnot and J.T. Murphy led the “ultra left” opposition of Comintern loyalists. So acrimonious did the dispute become that it finally had to be sorted out in Moscow. There the majority of the leadership were transformed into a minority. Harry Pollitt who changed sides just in time was made party secretary, the dissident ex-leadership being dumped.
Always a prolific writer, Dutt was in his element justifying the unjustifiable during the whole of the “third period”. If party membership declined, and it did, the party was stronger, because purer. If fascism succeeded in Germany, all to the good because: “After Hitler, us”. In this last context Dutt spent some time preparing a book proving the objectively fascist nature of social democracy, only to find that when the volume was published the “third period” had evaporated into the gaseous vapours of the “popular front”. The prospect of such a failure of vision must disturb the sleep of all votaries of capricious gods.
But the lurch from ultra-left idiocy of “social fascism” to the social pacifism of the “popular front” was a contradiction easily encompassed in Dutt’s own special dialectic.
Together with D.N. Pritt he was an enthusiastic apologist for the Moscow frame-up trials. Russian communists he had known, some as friends, disappeared in the horror of the great purge, not a words, not a whisper escaped Dutt’s lips or his pen to indicate anything but peace and socialist construction were going on in Russia under the avuncular beneficence of Joe Stalin.
The fruitful partnership with Harry Pollitt was interrupted in 1939. Harry with a logicality that years or training had failed to completely overcome had decided, at the outbreak of hostilities, that the war being against fascists must be, an anti-fascist war and so proclaimed it. He had, however, neglected the fact that the Stalin-Ribbentrop pact had been signed. Germany and Russia had a non-aggression pact. Palme Dutt, more versed in the signals, characterised the war as “imperialist”. Pollitt was removed from the secretaryship and returned to boilermaking, while Dutt took over his job, a situation that lasted until Russia entered the war when its character was immediately transformed into an anti-fascist crusade.
To chronicle each twist and turn of Palme Dutt’s devotion to the line from Moscow would be repetitive and tedious. Suffice to say his last big service to the Russian comrades was in 1956 when he stumped the country, attempting to calm the fears of party members distressed by Khruschev’s revelations at the 20th Party Congress and the Russian crushing of the Hungarian revolution. Palme Dutt’s discourse in justification of Stalin, was know as the “spots on the sun” speech. The sun, according to Dutt, is the source of energy, life, growth and was an all round good thing to have, nevertheless, there are spots on the sun: so it was with Stalin. The argument , for once, did not go down well with the comrades. Over 7,000 left the party and the monolith cracked in a way that defied restoration.
Dutt went on of course, he still edited Labour Monthly and wrote his increasingly tedious Notes of the Month. But it was not the same. Russians with H bombs and Sputniks have less need of foreign communist parties. The central links weakened, the party virtually rudderless, discipline almost non-existent, Palme Dutt’s last days must have been sad indeed. He surfaced briefly in 1969 to attack the party leadership for not supporting the Russian invasion of Czechoslovakia at the party congress that year. It was a last very faint hurrah.
Intellectually Palme Dutt had all the equipment for penetrating analysis and a dedication worthy of better causes. He lived through and did his small part in assisting the degeneration of official Communism into the grotesque caricature that it is today.
It is appropriate to conclude by quoting again from RPD’s obituary of Lenin, words that were strikingly prophetic and that he would have done well to have taken to heart.
“Hideous things will be proclaimed and advocated in the name of Leninism. All the traitors to socialist principles will endeavour to hide themselves behind the man who was bigger than formulas. The audacious compromises of an indomitable fighter will be made the excuse for the dirty compacts of petty bargainers and timid self-seekers.” How very true.
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<h2>Jim Higgins</h2>
<h1>Hagiography or History</h1>
<h4>Review of Birchall’s <a href="../../../../history/etol/revhist/otherdox/smp/smp1.html" target="new">History of IS</a></h4>
<h3>(April 1976)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>Workers League Bulletin</strong>, April 1976.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">If there is one thing that the revolutionary left requires it is a good, objective, Marxist history of the movement.</p>
<p>Failing that a more restricted history, often the same rigorous intention, of one or other of the left’s component parts would not come amiss. To answer that second need presumably, Ian H. Birchall has produced his article on the <em>History of the International Socialists</em> – the second part of which is being reproduced by the Danish comrades and for which this article serves as an introduction. It would be pleasant to be able to say that Ian Birchall has overcome those difficulties, of the committed and partisan historian, that have afflicted so many others in the past. James Klugman, is one such that immediately springs to mind, his pious history of the CPGB seems to have got stuck somewhere between the General Strike and the Third Period, for obvious reasons. Even making allowances for his much more restricted space allowance, Ian Birchall does not escape the Klugman trap. It is I fear another work of piety, its omissions – to the initiated at least – more significant than its actual content.</p>
<p>Its purpose is not to tell it as it was, so that we may the better order ourselves in the future, but to indicate to the faithful, and to the doubting, that all is well, that I.S. has an even, logical grasp on reality and always has had. That the sacrifice and the struggle are justified, the movement moving from change to consolidation and eventually to victory. Would that it were so.</p>
<p>As one who was rather closer to the centre of IS affairs (from 1958 to 1976) than Ian Birchall I can say with some confidence that what appears, in the <em>History</em>, as an ever, ever upward, progression was in fact a series of episodic attempts to close with reality, too often botched and often-wrong. Increasing membership was all too often a species of “Lenin Levy” drive to bureaucracy, that is not mitigated now that membership has declined to little more than half its 1973 high point of 4,000.</p>
<p>Of course, it would be unreasonable to expect the official, “short course”. History to be overly critical. It is reasonable, however, to expect some element of self criticism and a great deal less evasion and half truth. To illustrate this I would like to take several of the key issues raised in Birchall’s work. The Vietnam Solidarity Campaign, the Democratic Centralist debate, The Left Unity issue, the various Membership campaigns and the most recent faction fight with, and the expulsion of the IS Opposition, this last is diplomatically skirted around in a few less than well chosen words.</p>
<p>The picture presented in the <em>History</em>, is one of great IS interest and involvement in the VSC. It is frankly not true. At the very outset of the VSC, a Bertrand Russell Foundation spokesman approached IS, as one of the larger and saner left organisations, to provide full time workers for the Campaign including the Secretary. This was refused, it would have involved working with British partisans of the Fourth International – at that time going through an ultra left student vanguard phase – and IS control was not assured. In the development of the campaign, IS was largely noticeable by its absence. Certainly IS participated in the Grosvenor Square demonstration and the massive (100,000) march to Hyde Park, but only as those accepting the accomplished fact of a growing movement, in which it might be possible to recruit. That species of opportunism has characterised IS attitudes to all too many other issues, Irish Solidarity, Troops Out Movement and earlier the Greater London Council Rents Campaign. The result of all this has been a failure to capitalise on whatever correct political analysis has been made, a growth of suspicion among the uncommitted and other left groups, and a reputation for good mannered sectarianism, which of late has lost a great deal of the good manners.</p>
<p>On the issue of Democratic Centralism, Ian Birchall is certainly right to characterise this as a turning point in the life of IS but not to see it as any more than a very dubious, mixed blessing. Interestingly enough, the issue of Left Unity was very much intermingled with the internal shift in the IS regime. Democratic Centralism was not a response to the objective needs of the class struggle, an exercise in party building; it was in fact an exercise in inner group manoeuvring. At the time there had been an influx of young students, much exercised by the growth of racism, the May 1968 events in France and the wave of unrest in the universities. Generally ultra left by enthusiasm and inclination, they nevertheless accepted the important IS thesis of the central role of the working class as the active factor in revolutionary change. Numbers were involved in the campaign against rent rises. Others took a very ultra left position on the Labour Party and trade unions. As generally articulate and active elements they were, given the then federal structures of IS, most likely to form a significant minority, perhaps even a majority, of the policy making National Committee. It was in response to this danger that the democratic centralism debate was opened by Tony Cliff, with a one side of quarto collection of aphoristic notes on the question. The storm that greeted this was considerable and the debate went on for over a year. The issue and the contestants were very evenly divided, with such weighty figures as Michael Kidron and Peter Sedgwick supporting the federalist case.</p>
<p>It was at this point that the Unity of the Left issue was raised. The main target of this “unity offensive” was the then recently formed IMG. This group had displayed some success in the VSC and were attracting numbers of youth and students. As a section of the FI, and. therefore committed to the notion of democratic centralism, they would provide a useful, no doubt decisive counter weight to the libertarian federalists. Thus the four points for unity, anti-racism, anti-imperialism, anti-state control of trade unions and for workers’ control, were coined. They avoided such key obstacles to unity as the FI, state capitalism and other theoretical differences. In the event the IMG refused, although some of their members were captured. All that came of it was the accession of the very small Matgamna group (Workers’ Fight), who were inducted, against the wishes of the IS Executive, as a result of a private deal between Cliff and Matgamna which allowed them to join as individual members.</p>
<p>Once joined the Workers’ Fight comrades formed their own faction, the Trotskyist Tendency, which immediately lined up with a group of ultra Bolsheviks, a leading member of which as I recall was Ian Birchall. In and of itself none of this is worth very much more than a footnote in a boring academic treatise. But what is important is that the grand principles, bolstered by historical references to Lenin and Trotsky and countered by Luxemburg and Johnson-Forrest, were reflections of an idiosyncratic view about what was necessary to build the group, rather than an objective assessment of what was required in a real world.</p>
<p>It is possible to trace the subsequent difficulties of IS, its internal wrangles and current autocratic regime, insulated from working class reality, to the actual lessons for the democratic centralist debate, the method of its conduct and its outcome, which, in terms of members lost, was much greater than Birchall allows.</p>
<p>There is a myth, perpetuated by every sectarian and organisational fetishist, that democratic centralism is a set of principles acceptance of which is the sine qua non of revolutionary purity. According to this myth, Lenin elucidated the organisational question for us way back in the past and all we have to do is to fit our current problems into some past Bolshevik experience. It is of course nonsense and pernicious nonsense at that. The debate of 1903 is not only irrelevant to today’s concerns but as irrelevant in 1903, as all the participants – including Lenin – acknowledged. The very idea that dead 70 year old controversies should animate and guide present day revolutionaries should be the object of derision for Marxists.</p>
<p>Democratic Centralism cannot be defended according to a simple set of rules culled from the experience of Russian social democracy in 1903 or1917 for that matter and then rigidly applied in a British context in 1976: The command structure of emigré Russian Bolshevism has no place, is indeed counter-productive, in a country with a sophisticated working class, operating under conditions of bourgeois democracy. It is not only unnecessary but alien to the working class tradition in Britain, whose study has always taken second place to the pre-1917 disputes of Russian social democracy.</p>
<p>Democratic centralism is the self imposed willingness to act in solidarity with others as the result of free, open and structured discussion, there is no way, short of surgery, that minds can be changed because of some imperative command from an immaculate central committee. Any other definition sets aside Marxism and makes us devotees of a form of church where we wait for a pontiff to tell us God’s will.</p>
<p>The current IS cant on the subject: “Discussion of disputed questions inhibits our capacity to act”, leaves out of account the loss inherent in acting blind, without maps or a compass. The so called “Leninist” form of democratic centralism is clearly not essential to revolutionary growth, witness the fact that IS managed to exist for nearly 20 years of its existence, without recourse to its rigours. The more that IS insists on alleged Leninist forms, of late, the more its external influence and membership declines.</p>
<p>There is, in revolutionary groups, a great dilemma which involves the contradiction between building a stable apparatus and, at the same time, involving the worker members in the vital process of decision making and action. The revolutionary worker by definition works and is political exactly because of his experience as a militant against capitalism in his factory or workplace. In addition he will inevitably acquire trade union and related commitment in his spare time. By the limitation of his life, he is unable to devote the attention to the reading, attendance at meetings and discussions that gives him the facility to argue against the sophisticated eloquence of the middle class functionary. Even, in the few cases where workers have left industry to take on full time work for the movement he finds that by doing so he ceases to be a worker.</p>
<p>Interestingly enough, it is the case that every worker who has worked full time for IS, in a leadership capacity no longer does so, most are no longer in IS. The current IS central committee contains not one single worker, although there are a couple of postgraduates who have performed a ritual stint in industry before taking on a full time revolutionary post.</p>
<p>That would be of less significance if there were special arrangements made to consult with, to submit policy to, to learn from, the worker members. In fact the development has been entirely in the opposite direction. Last year the sole remaining vehicle for workers to express some sort of control, the National Committee was dispensed with to be replaced by an “Advisory” Council.</p>
<p>Today the only effective policy body is the six man C.C., which has absolute control between annual conferences, resting its authority on some half learned and ill assimilated lesson from Lenin’s <strong>Collected Works</strong>. It seems to pass their comprehension that the occasionally dubious organisational practices of Lenin were not justified in the eyes of history because in his hands they somehow became good, but because in 1917 the revolution was actually made. I see no Lenins around today, although I do see a number of dubious organisational practices. In particular, the epigones and pretenders seem most unfitted to make another revolution in Britain or anywhere else.</p>
<p>The building of a revolutionary organisation is, in fact, not in discovering the quickest way to come to decisions. It is the patient development of policy through bringing everyone involved into the decision making process. The bigger and more important the organisation the greater the need for such care.</p>
<p>If this is not done we have the manifestation of the small group psychology. The revolutionary functionary lives in a close and closed peer group. His life becomes the small change of inner party concerns and gossip. In that hothouse all manner of exotic thoughts can bloom, that would be impossible in the colder atmosphere in the workers movement. Cut off from the sources of reality, the limits of ambition become the limits of imagination. They are internal emigrés and the dog days of bolshevism are recreated by choice rather than necessity.</p>
<p>For myself, I reject this completely. Democratic Centralism can only be the method, whatever rules are appropriate at any time or place, by which the worker members and militants can be involved in policy decisions and action.</p>
<p>Similar mistakes were made during the years of the Tory government from 1970 to 1974. Nowhere was this more apparent than in the various membership campaigns. The procedure was described by one member driven to despair as: “Find a picket line and then throw a handful of membership cards at them, if anyone picks one up give him another five cards for his mates.” If that is an exaggeration it is not much of one. During the growing working class offensive against the Industrial Relations Act and the mass strikes against pay restraint a whole new audience was opened up to revolutionary activists. Instead of developing a serious recruitment policy that carefully explained the long term perspective, IS relied on emotional meetings reducing complicated political questions to demands or more and better industrial militancy. In the overheated atmosphere of such meetings, which frequently gave the impression of revivalist fervour, quite large numbers joined, who were never seen again. At the height of this spasm in 1973 IS organisers in the provinces were subjected to the pressure of a league table system, in which good marks and praise were accorded for members recruited. Inevitably those most praised were those with the sharpest pencils and the easiest way with spurious claims. There was no attempt to monitor or check the results, no recognition that the organiser who recruits a convenor in a car factory, after some months of careful political discussion, has probably done a better job than the man who in the same time recruits fifty none of whom stay more than a few weeks. The membership campaigns were in fact exercises in membership turnover; which in 1973 amounted to over 1,500 members. Not only that the emphasis on showy but shallow successes placing, as it did, the emphasis on undirected activism was the issue that caused considerable disquiet in the leading committee. As a result those leading figures, like Cliff, who had placed greatest stress on the issue of democratic centralism, operated – effectively – outside the ambit of the Executive Committee, discipline and collective responsibility became the duty of those who disagreed, whether a majority or not, while free action and indiscipline was reserved with those claiming self appointed political rectitude. This apotheosis of hard necked individualism was, whenever it was questioned, justified by reference to Lenin and his injunction on the necessity of breaking discipline in the greater interest of the revolution. This anecdotal method of analysis which had been used to demand a politically elected leadership was, in its turn, in 1973-4 used to justify a federally based Executive composed of full time workers from the “leading areas”. By further reference to the <strong>Collected Works</strong> that federal EC was discarded in short order for an EC based on function in the central apparatus, <strong>IS Journal</strong> editor, <strong>SW</strong> editor, industrial organiser, etc. These absurd and frequent shifts gave rise to disillusion and mistrust. The expression of one or two individuals prejudices and impatience. Collective leadership, under such circumstances, becomes a screen for manipulation and the expression of political differences in personalised terms. In the process, effectiveness is damaged, and the principles and objectives lost sight of.</p>
<p>Frenetic hopping from one issue to another, one set of leaders to another; from one ill-conceived campaign to the next can appear to be no more than the expression of personal disorder in the leading comrades. In fact it has a logic and an inevitability. It stems from the notion of the vanguard party as the sole repository of the historic experience of the class. It follows from this that the party cannot be wrong. At the same time the party contains a diversity of opinion and experience which if much more homogenous than that in the class as a whole, is nevertheless very real. Any internal divergence must therefore be mitigated by the leadership, circumvented or expelled. If that divergence enters the leadership itself then the only true ark of the covenant must be carried on by the most experienced and prestigious member of the leadership. The result centralism, let alone democratic centralism, is destroyed.</p>
<p>It was exactly this syndrome that afflicted IS in the faction fight with the IS Opposition. The ISO argued, in the wake of the Tory defeat in February 1974 that the new Labour administration would have a very long honeymoon period in which, by their special relationship with the trade union bureaucracy, they would far more effectively damp down industrial and political militancy. In such circumstances the emphasis should be less on campaigns and more on the unspectacular but more fruitful work among the worker militants, shop stewards and trade union activists. The real tasks, said the ISO, was the construction of a genuine rank and file movement that would be capable of initiating the trade union struggle abdicated by the trade union leaders. In the process the rank and file movement would be forced to develop a politics that would act as the bridge to revolutionary activity. That of course would require a great deal of patient explanation, a serious analytical style in the paper, less denunciation more explanation.</p>
<p>Counterposed to this, the leadership put forward the perspective of a short term honeymoon, followed rapidly by a resurgence of mass industrial struggle. In that perspective there was not time for the patient work of explanation, agitation was the watchword, the propaganda of the deed paramount. The trade unions, the shop stewards it was seriously argued have been rotted by full employment and thirty years of reformism. The new element the youth, traditionless and therefore revolutionary, inexperienced and therefore undaunted by the forces arrayed against them, in which presumably was numbered the middle aged militants. The paper should therefore contain short jazzy agitational articles in line with this infectious, youthful activism. Great hopes, even promises, were, held out that this would result in the increase of circulation to 80,000 perhaps over 100,000. (It is ironic to note that at the time of the debate the paper’s circulation was 40,000 and today is down to 20,000).</p>
<p>It will be noted that in this little debate the IS group had come full circle. At the time it broke with the Fourth International in 1950 the comrades had argued that state capitalism was the only theory that could arm the movement against the tendency to substitute non proletarian forces for the working class. In 1975 we find that the working class had acquired a new surrogate in the form of “revolutionary youth”. The organisation then had triumphed but socialist prospects had taken a severe knock.</p>
<p>All of this is a great pity and a great crime. The International Socialists were the most impressive group on the revolutionary left in Britain. Theoretically superior, organisationally more tolerant and politically more flexible, it had an attractive force denied the more orthodox and rigid competitors. With the benefit of hindsight it is possible to see all manner of faults in the early years of IS, but none of these was as significant as the misconceived breakthrough to an ill-understood example of the Leninist model in 1968-69. It is not necessary to find in this the great political error, to dignify it by reference to the alien pressure of capitalism, except in the sense of general cultural loss within capitalism. The same things occur in tennis clubs and other social groupings. The trouble is that IS that could have been so much more., has sacrificed its chance at a small but organic relationship with advanced workers for an internal homogeneity that stifles criticism and eventually sacrifices growth.</p>
<p>Ian Birchall’s article does not refer to these problems except in the most exculpatory way but it will not be wasted if it causes those with the willingness to think again.</p>
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MIA > Archive > Higgins
Jim Higgins
Hagiography or History
Review of Birchall’s History of IS
(April 1976)
From Workers League Bulletin, April 1976.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
If there is one thing that the revolutionary left requires it is a good, objective, Marxist history of the movement.
Failing that a more restricted history, often the same rigorous intention, of one or other of the left’s component parts would not come amiss. To answer that second need presumably, Ian H. Birchall has produced his article on the History of the International Socialists – the second part of which is being reproduced by the Danish comrades and for which this article serves as an introduction. It would be pleasant to be able to say that Ian Birchall has overcome those difficulties, of the committed and partisan historian, that have afflicted so many others in the past. James Klugman, is one such that immediately springs to mind, his pious history of the CPGB seems to have got stuck somewhere between the General Strike and the Third Period, for obvious reasons. Even making allowances for his much more restricted space allowance, Ian Birchall does not escape the Klugman trap. It is I fear another work of piety, its omissions – to the initiated at least – more significant than its actual content.
Its purpose is not to tell it as it was, so that we may the better order ourselves in the future, but to indicate to the faithful, and to the doubting, that all is well, that I.S. has an even, logical grasp on reality and always has had. That the sacrifice and the struggle are justified, the movement moving from change to consolidation and eventually to victory. Would that it were so.
As one who was rather closer to the centre of IS affairs (from 1958 to 1976) than Ian Birchall I can say with some confidence that what appears, in the History, as an ever, ever upward, progression was in fact a series of episodic attempts to close with reality, too often botched and often-wrong. Increasing membership was all too often a species of “Lenin Levy” drive to bureaucracy, that is not mitigated now that membership has declined to little more than half its 1973 high point of 4,000.
Of course, it would be unreasonable to expect the official, “short course”. History to be overly critical. It is reasonable, however, to expect some element of self criticism and a great deal less evasion and half truth. To illustrate this I would like to take several of the key issues raised in Birchall’s work. The Vietnam Solidarity Campaign, the Democratic Centralist debate, The Left Unity issue, the various Membership campaigns and the most recent faction fight with, and the expulsion of the IS Opposition, this last is diplomatically skirted around in a few less than well chosen words.
The picture presented in the History, is one of great IS interest and involvement in the VSC. It is frankly not true. At the very outset of the VSC, a Bertrand Russell Foundation spokesman approached IS, as one of the larger and saner left organisations, to provide full time workers for the Campaign including the Secretary. This was refused, it would have involved working with British partisans of the Fourth International – at that time going through an ultra left student vanguard phase – and IS control was not assured. In the development of the campaign, IS was largely noticeable by its absence. Certainly IS participated in the Grosvenor Square demonstration and the massive (100,000) march to Hyde Park, but only as those accepting the accomplished fact of a growing movement, in which it might be possible to recruit. That species of opportunism has characterised IS attitudes to all too many other issues, Irish Solidarity, Troops Out Movement and earlier the Greater London Council Rents Campaign. The result of all this has been a failure to capitalise on whatever correct political analysis has been made, a growth of suspicion among the uncommitted and other left groups, and a reputation for good mannered sectarianism, which of late has lost a great deal of the good manners.
On the issue of Democratic Centralism, Ian Birchall is certainly right to characterise this as a turning point in the life of IS but not to see it as any more than a very dubious, mixed blessing. Interestingly enough, the issue of Left Unity was very much intermingled with the internal shift in the IS regime. Democratic Centralism was not a response to the objective needs of the class struggle, an exercise in party building; it was in fact an exercise in inner group manoeuvring. At the time there had been an influx of young students, much exercised by the growth of racism, the May 1968 events in France and the wave of unrest in the universities. Generally ultra left by enthusiasm and inclination, they nevertheless accepted the important IS thesis of the central role of the working class as the active factor in revolutionary change. Numbers were involved in the campaign against rent rises. Others took a very ultra left position on the Labour Party and trade unions. As generally articulate and active elements they were, given the then federal structures of IS, most likely to form a significant minority, perhaps even a majority, of the policy making National Committee. It was in response to this danger that the democratic centralism debate was opened by Tony Cliff, with a one side of quarto collection of aphoristic notes on the question. The storm that greeted this was considerable and the debate went on for over a year. The issue and the contestants were very evenly divided, with such weighty figures as Michael Kidron and Peter Sedgwick supporting the federalist case.
It was at this point that the Unity of the Left issue was raised. The main target of this “unity offensive” was the then recently formed IMG. This group had displayed some success in the VSC and were attracting numbers of youth and students. As a section of the FI, and. therefore committed to the notion of democratic centralism, they would provide a useful, no doubt decisive counter weight to the libertarian federalists. Thus the four points for unity, anti-racism, anti-imperialism, anti-state control of trade unions and for workers’ control, were coined. They avoided such key obstacles to unity as the FI, state capitalism and other theoretical differences. In the event the IMG refused, although some of their members were captured. All that came of it was the accession of the very small Matgamna group (Workers’ Fight), who were inducted, against the wishes of the IS Executive, as a result of a private deal between Cliff and Matgamna which allowed them to join as individual members.
Once joined the Workers’ Fight comrades formed their own faction, the Trotskyist Tendency, which immediately lined up with a group of ultra Bolsheviks, a leading member of which as I recall was Ian Birchall. In and of itself none of this is worth very much more than a footnote in a boring academic treatise. But what is important is that the grand principles, bolstered by historical references to Lenin and Trotsky and countered by Luxemburg and Johnson-Forrest, were reflections of an idiosyncratic view about what was necessary to build the group, rather than an objective assessment of what was required in a real world.
It is possible to trace the subsequent difficulties of IS, its internal wrangles and current autocratic regime, insulated from working class reality, to the actual lessons for the democratic centralist debate, the method of its conduct and its outcome, which, in terms of members lost, was much greater than Birchall allows.
There is a myth, perpetuated by every sectarian and organisational fetishist, that democratic centralism is a set of principles acceptance of which is the sine qua non of revolutionary purity. According to this myth, Lenin elucidated the organisational question for us way back in the past and all we have to do is to fit our current problems into some past Bolshevik experience. It is of course nonsense and pernicious nonsense at that. The debate of 1903 is not only irrelevant to today’s concerns but as irrelevant in 1903, as all the participants – including Lenin – acknowledged. The very idea that dead 70 year old controversies should animate and guide present day revolutionaries should be the object of derision for Marxists.
Democratic Centralism cannot be defended according to a simple set of rules culled from the experience of Russian social democracy in 1903 or1917 for that matter and then rigidly applied in a British context in 1976: The command structure of emigré Russian Bolshevism has no place, is indeed counter-productive, in a country with a sophisticated working class, operating under conditions of bourgeois democracy. It is not only unnecessary but alien to the working class tradition in Britain, whose study has always taken second place to the pre-1917 disputes of Russian social democracy.
Democratic centralism is the self imposed willingness to act in solidarity with others as the result of free, open and structured discussion, there is no way, short of surgery, that minds can be changed because of some imperative command from an immaculate central committee. Any other definition sets aside Marxism and makes us devotees of a form of church where we wait for a pontiff to tell us God’s will.
The current IS cant on the subject: “Discussion of disputed questions inhibits our capacity to act”, leaves out of account the loss inherent in acting blind, without maps or a compass. The so called “Leninist” form of democratic centralism is clearly not essential to revolutionary growth, witness the fact that IS managed to exist for nearly 20 years of its existence, without recourse to its rigours. The more that IS insists on alleged Leninist forms, of late, the more its external influence and membership declines.
There is, in revolutionary groups, a great dilemma which involves the contradiction between building a stable apparatus and, at the same time, involving the worker members in the vital process of decision making and action. The revolutionary worker by definition works and is political exactly because of his experience as a militant against capitalism in his factory or workplace. In addition he will inevitably acquire trade union and related commitment in his spare time. By the limitation of his life, he is unable to devote the attention to the reading, attendance at meetings and discussions that gives him the facility to argue against the sophisticated eloquence of the middle class functionary. Even, in the few cases where workers have left industry to take on full time work for the movement he finds that by doing so he ceases to be a worker.
Interestingly enough, it is the case that every worker who has worked full time for IS, in a leadership capacity no longer does so, most are no longer in IS. The current IS central committee contains not one single worker, although there are a couple of postgraduates who have performed a ritual stint in industry before taking on a full time revolutionary post.
That would be of less significance if there were special arrangements made to consult with, to submit policy to, to learn from, the worker members. In fact the development has been entirely in the opposite direction. Last year the sole remaining vehicle for workers to express some sort of control, the National Committee was dispensed with to be replaced by an “Advisory” Council.
Today the only effective policy body is the six man C.C., which has absolute control between annual conferences, resting its authority on some half learned and ill assimilated lesson from Lenin’s Collected Works. It seems to pass their comprehension that the occasionally dubious organisational practices of Lenin were not justified in the eyes of history because in his hands they somehow became good, but because in 1917 the revolution was actually made. I see no Lenins around today, although I do see a number of dubious organisational practices. In particular, the epigones and pretenders seem most unfitted to make another revolution in Britain or anywhere else.
The building of a revolutionary organisation is, in fact, not in discovering the quickest way to come to decisions. It is the patient development of policy through bringing everyone involved into the decision making process. The bigger and more important the organisation the greater the need for such care.
If this is not done we have the manifestation of the small group psychology. The revolutionary functionary lives in a close and closed peer group. His life becomes the small change of inner party concerns and gossip. In that hothouse all manner of exotic thoughts can bloom, that would be impossible in the colder atmosphere in the workers movement. Cut off from the sources of reality, the limits of ambition become the limits of imagination. They are internal emigrés and the dog days of bolshevism are recreated by choice rather than necessity.
For myself, I reject this completely. Democratic Centralism can only be the method, whatever rules are appropriate at any time or place, by which the worker members and militants can be involved in policy decisions and action.
Similar mistakes were made during the years of the Tory government from 1970 to 1974. Nowhere was this more apparent than in the various membership campaigns. The procedure was described by one member driven to despair as: “Find a picket line and then throw a handful of membership cards at them, if anyone picks one up give him another five cards for his mates.” If that is an exaggeration it is not much of one. During the growing working class offensive against the Industrial Relations Act and the mass strikes against pay restraint a whole new audience was opened up to revolutionary activists. Instead of developing a serious recruitment policy that carefully explained the long term perspective, IS relied on emotional meetings reducing complicated political questions to demands or more and better industrial militancy. In the overheated atmosphere of such meetings, which frequently gave the impression of revivalist fervour, quite large numbers joined, who were never seen again. At the height of this spasm in 1973 IS organisers in the provinces were subjected to the pressure of a league table system, in which good marks and praise were accorded for members recruited. Inevitably those most praised were those with the sharpest pencils and the easiest way with spurious claims. There was no attempt to monitor or check the results, no recognition that the organiser who recruits a convenor in a car factory, after some months of careful political discussion, has probably done a better job than the man who in the same time recruits fifty none of whom stay more than a few weeks. The membership campaigns were in fact exercises in membership turnover; which in 1973 amounted to over 1,500 members. Not only that the emphasis on showy but shallow successes placing, as it did, the emphasis on undirected activism was the issue that caused considerable disquiet in the leading committee. As a result those leading figures, like Cliff, who had placed greatest stress on the issue of democratic centralism, operated – effectively – outside the ambit of the Executive Committee, discipline and collective responsibility became the duty of those who disagreed, whether a majority or not, while free action and indiscipline was reserved with those claiming self appointed political rectitude. This apotheosis of hard necked individualism was, whenever it was questioned, justified by reference to Lenin and his injunction on the necessity of breaking discipline in the greater interest of the revolution. This anecdotal method of analysis which had been used to demand a politically elected leadership was, in its turn, in 1973-4 used to justify a federally based Executive composed of full time workers from the “leading areas”. By further reference to the Collected Works that federal EC was discarded in short order for an EC based on function in the central apparatus, IS Journal editor, SW editor, industrial organiser, etc. These absurd and frequent shifts gave rise to disillusion and mistrust. The expression of one or two individuals prejudices and impatience. Collective leadership, under such circumstances, becomes a screen for manipulation and the expression of political differences in personalised terms. In the process, effectiveness is damaged, and the principles and objectives lost sight of.
Frenetic hopping from one issue to another, one set of leaders to another; from one ill-conceived campaign to the next can appear to be no more than the expression of personal disorder in the leading comrades. In fact it has a logic and an inevitability. It stems from the notion of the vanguard party as the sole repository of the historic experience of the class. It follows from this that the party cannot be wrong. At the same time the party contains a diversity of opinion and experience which if much more homogenous than that in the class as a whole, is nevertheless very real. Any internal divergence must therefore be mitigated by the leadership, circumvented or expelled. If that divergence enters the leadership itself then the only true ark of the covenant must be carried on by the most experienced and prestigious member of the leadership. The result centralism, let alone democratic centralism, is destroyed.
It was exactly this syndrome that afflicted IS in the faction fight with the IS Opposition. The ISO argued, in the wake of the Tory defeat in February 1974 that the new Labour administration would have a very long honeymoon period in which, by their special relationship with the trade union bureaucracy, they would far more effectively damp down industrial and political militancy. In such circumstances the emphasis should be less on campaigns and more on the unspectacular but more fruitful work among the worker militants, shop stewards and trade union activists. The real tasks, said the ISO, was the construction of a genuine rank and file movement that would be capable of initiating the trade union struggle abdicated by the trade union leaders. In the process the rank and file movement would be forced to develop a politics that would act as the bridge to revolutionary activity. That of course would require a great deal of patient explanation, a serious analytical style in the paper, less denunciation more explanation.
Counterposed to this, the leadership put forward the perspective of a short term honeymoon, followed rapidly by a resurgence of mass industrial struggle. In that perspective there was not time for the patient work of explanation, agitation was the watchword, the propaganda of the deed paramount. The trade unions, the shop stewards it was seriously argued have been rotted by full employment and thirty years of reformism. The new element the youth, traditionless and therefore revolutionary, inexperienced and therefore undaunted by the forces arrayed against them, in which presumably was numbered the middle aged militants. The paper should therefore contain short jazzy agitational articles in line with this infectious, youthful activism. Great hopes, even promises, were, held out that this would result in the increase of circulation to 80,000 perhaps over 100,000. (It is ironic to note that at the time of the debate the paper’s circulation was 40,000 and today is down to 20,000).
It will be noted that in this little debate the IS group had come full circle. At the time it broke with the Fourth International in 1950 the comrades had argued that state capitalism was the only theory that could arm the movement against the tendency to substitute non proletarian forces for the working class. In 1975 we find that the working class had acquired a new surrogate in the form of “revolutionary youth”. The organisation then had triumphed but socialist prospects had taken a severe knock.
All of this is a great pity and a great crime. The International Socialists were the most impressive group on the revolutionary left in Britain. Theoretically superior, organisationally more tolerant and politically more flexible, it had an attractive force denied the more orthodox and rigid competitors. With the benefit of hindsight it is possible to see all manner of faults in the early years of IS, but none of these was as significant as the misconceived breakthrough to an ill-understood example of the Leninist model in 1968-69. It is not necessary to find in this the great political error, to dignify it by reference to the alien pressure of capitalism, except in the sense of general cultural loss within capitalism. The same things occur in tennis clubs and other social groupings. The trouble is that IS that could have been so much more., has sacrificed its chance at a small but organic relationship with advanced workers for an internal homogeneity that stifles criticism and eventually sacrifices growth.
Ian Birchall’s article does not refer to these problems except in the most exculpatory way but it will not be wasted if it causes those with the willingness to think again.
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<h2>Jim Higgins</h2>
<h4>The unions</h4>
<h1>TUC Running Scared</h1>
<h3>(December 1975)</h3>
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<p class="info">From the <strong>Spectator</strong>, 13 December 1975, p.755.<br>
Published here with kind permission of the <strong>Spectator</strong>.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
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<p class="fst">Official statistics are truly wonderful not just the ones that tell us we have two and a half children, but those trade figures, cost of living indices and the like. They have such an air of certainty about them, inspiring confidence in the statisticians, if not the facts they reveal. Governments, who normally have the appearance of bemused incompetence, display great expertise in taking all credit for good sets of figures which, they manage to suggest are a tribute to their wise and prudent stewardship. While bad figures call forth stern warnings not to he misled by one month’s returns, which are distorted by unique, unrepeatable factors. With these reservations in mind, and leaving aside the nagging doubts engendered by the Treasury’s seeming capacity to lose £4,000 million in their accounts, it could prove instructive to examine some of the figures released last week by the Department of Employment. Not just the figures but some of the surrounding circumstances.</p>
<p>First of all, you will he pleased to hear that by April 1975 the average male worker in this country had broken through the £3,000 per year wage barrier. Up to that date the average male’s weekly increase for the year was £13.10, several percentage points above the cost of living increase. Beside giving some added credibility to the ‘wage push’ theorists this fact pays a tribute to the effectiveness of trade union pressure during the period. Even more it points to the pressure during the period. Even more it points to the altruism being displayed by trade unionists in their acceptance of the £6 limit. For, since July this year there have been no increases over the limit and several below it. That represents the reversal of a trend, since the war, for wage increases to be based on last year’s claim plus a bit more for expanding living standards.</p>
<p>This “ragged trousered philanthropy” is not unknown in the trade union movement. It has been displayed at the cost of great sacrifice in two world wars and, in peace, to the greater glory of several Labour administrations. In the post-war Attlee government. Sir Stafford Cripps, a vegetarian who considered snoek a gastronomic indulgence, was able to impose a crude wage freeze that held for some time. During the early days of the first Wilson Administration, a great fund of good will was expended in voluntary restraint. So great was this in some trade union quarters, that one union insisted on taking less than it could have obtained for a section of its members, because to do so would have exceeded the 5 per cent norm.</p>
<p>Of course none of this lasted for very long. Pent up demand and rising expectation always broke through after a year or so. Each new attempt to control wages found the price of trade union acceptance a little higher. More and more it became necessary, not just to consult but to involve in wider and wider areas of policy, the TUC and trade union leadership, and to accept TUC social policy objectives as those of the government.</p>
<p>Nice though this may be for Congress House mandarins, it does carry with it some disadvantages. The closer the coincidence of view between government and unions, the greater their mutual dependence, the wider the gap between the trade union leadership and the activist rank and file member in the branches and shop steward committees. The TUC’s commitment to the £6 limit and deferred reflation, with its concomitant of even higher unemployment, will inevitably bring them into greater conflict with dissident minorities within the union.</p>
<p>This problem, of the dissident minority and how to deal with it has exercised the mind of a whole swathe of academics, a Royal Commission, countless politicians and leader writers. One short answer, favoured during Mr Ray Gunter’s time at the Ministry of Labour, canvassed at the Donovan Commission on Trade Unions, was to give the trade union leadership powers, through encouragement of the closed shop, to discipline and remove from employment any troublesome elements.</p>
<p>There is, though, a problem in attempting to discipline the active militants. In almost all unions the militants are the chaps who earn the right to be listened to by their fellows by carrying out the vital but very tedious work of local administration, sub collection and so on. Most negotiations with management are carried out by lay union officers, which makes them popular with the lads and essential to the functioning of the trade union. Without them several trade unions would falter and fail and the rest would be very ineffective indeed. Not only this, the avenue of communication with the average member is through these activists. Press and television appearances are no substitute for the union network, media communication is part of the public relations effort rather than an attempt to disseminate information.</p>
<p>This problem may be further illuminated by smother brief glance at the DE statistics. They indicate that there was a distinct lowering of days lost in strikes in October. At 278,000 it was the lowest for five years. Only 32,000 workers were involved in the comparatively small number of 110 disputes. All of this would tend to prove that unemployment is biting deep in the consciousness of industrial workers. A more significant fact about these same figures is that there were nearly as many strikes over redundancy problems as there were over money. If this tendency continues we will be able to learn the bitter truth that redundancy strikes are as destructive as money strikes.</p>
<p>Again, on the same day as the DE figures were released, a very large demonstration of trade unionists marched on the House of Commons to protest at unemployment levels. The TUC had publicly and loudly dissociated themselves from this enterprise. Circulars had been sent to all branches of affiliated unions indicating the TUC’s displeasure with the demonstration. Despite this some 20,000 workers took the well worn road from Euston to Westminster.</p>
<p>A manifestation of this size is not easily explained away as Mr Murray attempted to do, by references to sinister extremists. The extremists, no matter how sinister, would have considerably difficulty getting two men and a dog to demonstrate on say the £6 limit but on unemployment they are cutting with the grain. Mr Murray’s horrid dilemma was nicely displayed in the statement he issued shortly after the demonstration had passed Congress House shouting: “Murray Out” He said “Unemployment is unacceptably high ... the proposals the TUC will put to Mr Healey will be consistent with the need to beat inflation, not promote a consumption-led boom.” Translated into language trade unionists will understand that means the TUC is as committed to the government, and rising unemployment, as is the government to the TUC. They will sink or swim together. If they do sink, on a wave of rank and file, trade union revulsion, it is highly unlikely that Mrs Thatcher will benefit very much from the resultant mess.</p>
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MIA > Archive > Higgins
Jim Higgins
The unions
TUC Running Scared
(December 1975)
From the Spectator, 13 December 1975, p.755.
Published here with kind permission of the Spectator.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Official statistics are truly wonderful not just the ones that tell us we have two and a half children, but those trade figures, cost of living indices and the like. They have such an air of certainty about them, inspiring confidence in the statisticians, if not the facts they reveal. Governments, who normally have the appearance of bemused incompetence, display great expertise in taking all credit for good sets of figures which, they manage to suggest are a tribute to their wise and prudent stewardship. While bad figures call forth stern warnings not to he misled by one month’s returns, which are distorted by unique, unrepeatable factors. With these reservations in mind, and leaving aside the nagging doubts engendered by the Treasury’s seeming capacity to lose £4,000 million in their accounts, it could prove instructive to examine some of the figures released last week by the Department of Employment. Not just the figures but some of the surrounding circumstances.
First of all, you will he pleased to hear that by April 1975 the average male worker in this country had broken through the £3,000 per year wage barrier. Up to that date the average male’s weekly increase for the year was £13.10, several percentage points above the cost of living increase. Beside giving some added credibility to the ‘wage push’ theorists this fact pays a tribute to the effectiveness of trade union pressure during the period. Even more it points to the pressure during the period. Even more it points to the altruism being displayed by trade unionists in their acceptance of the £6 limit. For, since July this year there have been no increases over the limit and several below it. That represents the reversal of a trend, since the war, for wage increases to be based on last year’s claim plus a bit more for expanding living standards.
This “ragged trousered philanthropy” is not unknown in the trade union movement. It has been displayed at the cost of great sacrifice in two world wars and, in peace, to the greater glory of several Labour administrations. In the post-war Attlee government. Sir Stafford Cripps, a vegetarian who considered snoek a gastronomic indulgence, was able to impose a crude wage freeze that held for some time. During the early days of the first Wilson Administration, a great fund of good will was expended in voluntary restraint. So great was this in some trade union quarters, that one union insisted on taking less than it could have obtained for a section of its members, because to do so would have exceeded the 5 per cent norm.
Of course none of this lasted for very long. Pent up demand and rising expectation always broke through after a year or so. Each new attempt to control wages found the price of trade union acceptance a little higher. More and more it became necessary, not just to consult but to involve in wider and wider areas of policy, the TUC and trade union leadership, and to accept TUC social policy objectives as those of the government.
Nice though this may be for Congress House mandarins, it does carry with it some disadvantages. The closer the coincidence of view between government and unions, the greater their mutual dependence, the wider the gap between the trade union leadership and the activist rank and file member in the branches and shop steward committees. The TUC’s commitment to the £6 limit and deferred reflation, with its concomitant of even higher unemployment, will inevitably bring them into greater conflict with dissident minorities within the union.
This problem, of the dissident minority and how to deal with it has exercised the mind of a whole swathe of academics, a Royal Commission, countless politicians and leader writers. One short answer, favoured during Mr Ray Gunter’s time at the Ministry of Labour, canvassed at the Donovan Commission on Trade Unions, was to give the trade union leadership powers, through encouragement of the closed shop, to discipline and remove from employment any troublesome elements.
There is, though, a problem in attempting to discipline the active militants. In almost all unions the militants are the chaps who earn the right to be listened to by their fellows by carrying out the vital but very tedious work of local administration, sub collection and so on. Most negotiations with management are carried out by lay union officers, which makes them popular with the lads and essential to the functioning of the trade union. Without them several trade unions would falter and fail and the rest would be very ineffective indeed. Not only this, the avenue of communication with the average member is through these activists. Press and television appearances are no substitute for the union network, media communication is part of the public relations effort rather than an attempt to disseminate information.
This problem may be further illuminated by smother brief glance at the DE statistics. They indicate that there was a distinct lowering of days lost in strikes in October. At 278,000 it was the lowest for five years. Only 32,000 workers were involved in the comparatively small number of 110 disputes. All of this would tend to prove that unemployment is biting deep in the consciousness of industrial workers. A more significant fact about these same figures is that there were nearly as many strikes over redundancy problems as there were over money. If this tendency continues we will be able to learn the bitter truth that redundancy strikes are as destructive as money strikes.
Again, on the same day as the DE figures were released, a very large demonstration of trade unionists marched on the House of Commons to protest at unemployment levels. The TUC had publicly and loudly dissociated themselves from this enterprise. Circulars had been sent to all branches of affiliated unions indicating the TUC’s displeasure with the demonstration. Despite this some 20,000 workers took the well worn road from Euston to Westminster.
A manifestation of this size is not easily explained away as Mr Murray attempted to do, by references to sinister extremists. The extremists, no matter how sinister, would have considerably difficulty getting two men and a dog to demonstrate on say the £6 limit but on unemployment they are cutting with the grain. Mr Murray’s horrid dilemma was nicely displayed in the statement he issued shortly after the demonstration had passed Congress House shouting: “Murray Out” He said “Unemployment is unacceptably high ... the proposals the TUC will put to Mr Healey will be consistent with the need to beat inflation, not promote a consumption-led boom.” Translated into language trade unionists will understand that means the TUC is as committed to the government, and rising unemployment, as is the government to the TUC. They will sink or swim together. If they do sink, on a wave of rank and file, trade union revulsion, it is highly unlikely that Mrs Thatcher will benefit very much from the resultant mess.
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<h2>Jim Higgins</h2>
<h1>Workers’ power or jobs for the boys?</h1>
<h3>(29 March 1969)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Socialist Worker</strong>, <a href="../../../../history/etol/newspape/sw-gb/1969/index.html#n0115" target="new">No. 115</a>, 29 March 1969, p. 3.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<table width="65%" cellpadding="3" cellspacing="3" align="center">
<tbody><tr>
<td>
<p class="c"><strong>Control or participation? As the Workers Control conference meets this weekend, JIM HIGGINS suggests there is some confusion on the Left</strong></p>
</td>
</tr>
</tbody></table>
<p class="fst">IN RECENT YEARS workers’ control has acquired a more general currency in trade union and political discussion than it has enjoyed since the period leading up to the First World War.</p>
<p>The notion of workers’ control that has been kept alive through the dead years in the small circles of the Left now emerges to be taken up and transformed to its opposite by every trade union and Labour opportunist with a sharp eye for the main chance.</p>
<p>‘Industrial democracy’ is the cry from Jack Jones of the TGWU. Participation is the cry of almost any vice-chancellor suffering the onslaught of the student militants.</p>
<p>The Liberals weigh carefully the relative merits of shareholders and workers and decide, with some justice, that the man who gives his labour to an industry should have more rights than the man who just gives his money.</p>
<p>In all of this there is something missing – real control. The elaborate blueprints for workers’ representatives on management boards, shares for the workers and variations on the theme of advisory councils all leave aside the question of power and who exercises power.</p>
<p>In all societies with any pretensions to development, power is not exercised by the man with the biggest muscles. (If that were the case, Mohammed Ali would be President of the USA – not a bad idea at that.)<br>
</p>
<h4>Control</h4>
<p class="fst">In the capitalist system power is exercised by the capitalists not because they are tougher a because they know more about the industries they own (frequently they know nothing) but because they control the state.</p>
<p>In Britain today the police, the judges and the army are there to ensure that the capitalist system remains. The comparative liberality of the state machine and its alleged neutrality will last as long, and not one minute longer, as the system is not seriously challenged.</p>
<p>From the Weimar Republic to Hitler Germany was but a short step. The police, the judiciary and the army were, with minor alterations, composed of the same people; the only difference was that, under the Nazis, they were operating a militant defence of German capitalism.</p>
<p>To imagine that it is possible to legislate changes in effective control is to cast doubts on one’s good sense and it is not the good sense of the supporters of participation that we need to doubt.</p>
<p>Their notion is to change nothing. Workers’ representatives on management boards may give the impression of control while effectively disarming or degutting the representative.<br>
</p>
<h4>Operate</h4>
<p class="fst">If the bosses have the majority their only need for us is to provide a smokescreen behind which they can operate. If the workers have a majority they do not need the bosses, but to hold their control of the enterprise they must control the state.</p>
<p>The role of the worker director, in the capitalist enterprise, is merely a reversal of the historical role of the harlot: responsibility without power.</p>
<p>A very real problem for trade unionists at any level of contact with management is to avoid accepting the bosses’ aims for those of the workers.</p>
<p>The pattern is set right at the top with trade union leaders taking their fat salaries for jobs on NEDDY, the IRC, the CIR and any other government sponsored body that can be utilised to bring the unions into closer contact with the government and its policies.</p>
<p>The fundamental policies of British capitalism are invariably taken with some tame trade unionist to second the decision.<br>
</p>
<h4>Denies</h4>
<p class="fst">The idea of a national interest that stands above class lies at the bottom of the philosophy of participation. The individual may achieve harmony and agreement with the bosses only to the extent that he denies the class interests of his fellow workers.</p>
<p>Capitalist interests are fundamentally different and opposed to working-class interests and the final resolution of those differences will not come in cosy chats in the board room but in the streets and on the factory floor.</p>
<p>Anyone who adopts a class position on workers’ control is eventually faced with the question of what to do about it now. It is clear that although militancy is rising in the face of capitalist rationalisation, most workers are not yet convinced of the need to struggle for state power.</p>
<p>But, between the existing situation and the fight for control of the state there are a number of useful and instructive struggles that can be fought against management prerogatives.</p>
<p>Control over hiring and firing, grading, overtime and speed-up are all matters that are most hard fought in any industry. The struggle to wrest control over these factors of the workers’ everyday life completely from the employer’s grasp, to remove, if only partially, the employer’s stranglehold on the workers’ life in the factory,is a policy that nearly all workers will recognise as worthwhile and worth fighting for.</p>
<p>And in the process they might well develop the muscles and the will to do away with the employers altogether.<br>
</p>
<h4>Discipline</h4>
<p class="fst">In many of the struggles, big and small, that take place today, control of the day to day life on the job is the major component of the strike. At Ford the battle was not so much about the size of the increase and the differential with the Midland car factories but about how far management would be allowed to go in disciplining the workforce.</p>
<p>Whatever the formal result of the official discussions (and there is room for criticism of Scanlon and Jones for their acceptance of back-door penal conditions) it is clear that from a situation where the workers were defending their position against a management attack they are now in a position to mount an offensive against Ford rationalisation and denial of shopfloor organisation.</p>
<p>The nonsense of the remote official machinery has been exposed and broken irreparably.</p>
<p>The struggle for real control is continuous and will continue while society is divided into classes.</p>
<p>The Labour and trade union fakers who see ‘participation’ as the soft option that will give content to their demagogy are either daft or deluded.</p>
<p>To elect a worker director is to change nothing and will give nobody any sense of participation. It will merely serve to emphasise the desperate stupidity of our captains of industry and their labour lieutenants.</p>
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MIA > Archive > Higgins
Jim Higgins
Workers’ power or jobs for the boys?
(29 March 1969)
From Socialist Worker, No. 115, 29 March 1969, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Control or participation? As the Workers Control conference meets this weekend, JIM HIGGINS suggests there is some confusion on the Left
IN RECENT YEARS workers’ control has acquired a more general currency in trade union and political discussion than it has enjoyed since the period leading up to the First World War.
The notion of workers’ control that has been kept alive through the dead years in the small circles of the Left now emerges to be taken up and transformed to its opposite by every trade union and Labour opportunist with a sharp eye for the main chance.
‘Industrial democracy’ is the cry from Jack Jones of the TGWU. Participation is the cry of almost any vice-chancellor suffering the onslaught of the student militants.
The Liberals weigh carefully the relative merits of shareholders and workers and decide, with some justice, that the man who gives his labour to an industry should have more rights than the man who just gives his money.
In all of this there is something missing – real control. The elaborate blueprints for workers’ representatives on management boards, shares for the workers and variations on the theme of advisory councils all leave aside the question of power and who exercises power.
In all societies with any pretensions to development, power is not exercised by the man with the biggest muscles. (If that were the case, Mohammed Ali would be President of the USA – not a bad idea at that.)
Control
In the capitalist system power is exercised by the capitalists not because they are tougher a because they know more about the industries they own (frequently they know nothing) but because they control the state.
In Britain today the police, the judges and the army are there to ensure that the capitalist system remains. The comparative liberality of the state machine and its alleged neutrality will last as long, and not one minute longer, as the system is not seriously challenged.
From the Weimar Republic to Hitler Germany was but a short step. The police, the judiciary and the army were, with minor alterations, composed of the same people; the only difference was that, under the Nazis, they were operating a militant defence of German capitalism.
To imagine that it is possible to legislate changes in effective control is to cast doubts on one’s good sense and it is not the good sense of the supporters of participation that we need to doubt.
Their notion is to change nothing. Workers’ representatives on management boards may give the impression of control while effectively disarming or degutting the representative.
Operate
If the bosses have the majority their only need for us is to provide a smokescreen behind which they can operate. If the workers have a majority they do not need the bosses, but to hold their control of the enterprise they must control the state.
The role of the worker director, in the capitalist enterprise, is merely a reversal of the historical role of the harlot: responsibility without power.
A very real problem for trade unionists at any level of contact with management is to avoid accepting the bosses’ aims for those of the workers.
The pattern is set right at the top with trade union leaders taking their fat salaries for jobs on NEDDY, the IRC, the CIR and any other government sponsored body that can be utilised to bring the unions into closer contact with the government and its policies.
The fundamental policies of British capitalism are invariably taken with some tame trade unionist to second the decision.
Denies
The idea of a national interest that stands above class lies at the bottom of the philosophy of participation. The individual may achieve harmony and agreement with the bosses only to the extent that he denies the class interests of his fellow workers.
Capitalist interests are fundamentally different and opposed to working-class interests and the final resolution of those differences will not come in cosy chats in the board room but in the streets and on the factory floor.
Anyone who adopts a class position on workers’ control is eventually faced with the question of what to do about it now. It is clear that although militancy is rising in the face of capitalist rationalisation, most workers are not yet convinced of the need to struggle for state power.
But, between the existing situation and the fight for control of the state there are a number of useful and instructive struggles that can be fought against management prerogatives.
Control over hiring and firing, grading, overtime and speed-up are all matters that are most hard fought in any industry. The struggle to wrest control over these factors of the workers’ everyday life completely from the employer’s grasp, to remove, if only partially, the employer’s stranglehold on the workers’ life in the factory,is a policy that nearly all workers will recognise as worthwhile and worth fighting for.
And in the process they might well develop the muscles and the will to do away with the employers altogether.
Discipline
In many of the struggles, big and small, that take place today, control of the day to day life on the job is the major component of the strike. At Ford the battle was not so much about the size of the increase and the differential with the Midland car factories but about how far management would be allowed to go in disciplining the workforce.
Whatever the formal result of the official discussions (and there is room for criticism of Scanlon and Jones for their acceptance of back-door penal conditions) it is clear that from a situation where the workers were defending their position against a management attack they are now in a position to mount an offensive against Ford rationalisation and denial of shopfloor organisation.
The nonsense of the remote official machinery has been exposed and broken irreparably.
The struggle for real control is continuous and will continue while society is divided into classes.
The Labour and trade union fakers who see ‘participation’ as the soft option that will give content to their demagogy are either daft or deluded.
To elect a worker director is to change nothing and will give nobody any sense of participation. It will merely serve to emphasise the desperate stupidity of our captains of industry and their labour lieutenants.
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<h2>Jim Higgins</h2>
<h1>The lessons of Linwood</h1>
<h3>(February 1976)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From the <strong>Spectator</strong>, 14 February 1976, p.16.<br>
Published here with kind permission of the <strong>Spectator</strong>.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="date"><em>Glasgow</em></p>
<p class="fst">Working in a car factory is not very pleasant – computerised production lines, repetitive work in noisy and unpleasant conditions frequently add up to a <em>Modern Times</em> type of alienation. The spectacular strike record of most of our motor car factories gives eloquent testimony to the fact that, even given the financial loss, it is pleasant to stop occasionally. At the Chrysler Linwood factory they have, in addition to the standard aggravations, difficulties peculiar to Linwood.</p>
<p>Opened in 1962, with the aid of large lumps of government money, it was intended to provide an alternative source of employment to the declining heavy industry of the Clyde. The factory, like Linwood town itself, looks as if it were put up in a bit of a hurry. Like some single-crop, banana republic its future was invested in one model, the Imp.</p>
<p>The labour force was “green”, not I hasten to add unskilled – the Clyde probably has more-timed-served workers than anywhere else, but certainly unused to modern mass production methods. The management were not “green” in the same way, but they certainly were not familiar with the robust independence of Glasgow workers.</p>
<p>The Imp was basically as good a small car as you could buy, but it had too many teething problems in its design, it was probably too late and, in any event, it never seriously challenged the Mini.</p>
<p>With all of these difficulties of settling down it is not very surprising that industrial relations at Linwood were not very good from the beginning. It may surprise a number of people without much knowledge of the situation, among whom we can clearly count Messrs Varley and Wilson, that over the last three years there has been very little native industrial disruption. Such stoppage as there have been were a result of difficulties outside Linwood.</p>
<p>The slow but steady course of Chrysler in the direction of the knackers’ yard, over the last couple of years, has not been lost on the workforce. Before Christmas 1975 the men were on a three-day week. When they left for the Christmas holiday it was assumed by many that there would be no company when they returned.</p>
<p>In January there was more three-day working and the trauma of the Varley-Riccardo talks. Those talks, fate and Mr Harold Lever’s faith in private enterprise resulted in the £162 million rescue bid which, incidentally, has a certain crazy logic about it. To let Chrysler go to the wall would have cost £150 million in lost revenue and unemployment payments, not to mention the loss of the Shah of Persia’s big order for cars.</p>
<p>Whatever the merit of the rescue operation, it was accepted by the somewhat punch-drunk Linwood workers, even though it carried the condition of 1,300 redundancies. Surprisingly, 2,300 volunteered to be made redundant – a response to the apparent lack of enthusiasm for Chrysler’s future shown by a number of government ministers, not least by Mr Varley. The attitude of several workers I spoke to was, “Why wait until everybody is sacked before looking for another job”.</p>
<p>It is against the background of these events that the latest Chrysler strike must be viewed. The sequence of events is complicated, but suffice it to say that there is good and sufficient evidence to conclude that the workers’ representatives were convinced that their long-standing, factory agreement and disputes procedure were being cavalierly treated by a local management, who were themselves the helpless creatures of the overall Chrysler UK management.</p>
<p>Matters were not at all improved by the statement made by the abrasive Mr Don Lander that: “We are here to make cars, not to go through procedures.” Whatever the subtleties of this phase of the dispute, and they will elude all but the dedicated, the Chrysler managers were obviously expecting an early cave-in by the hired help. Their expectations were, in the event, sadly disappointed. Glasgow workers and Chrysler men are nothing if not Glasgow workers, have a tradition of independence and a predeliction for complicated argument</p>
<p>Once the idea got abroad that the management were attempting to renege on agreements then the old Adam was roused. Craft skill and basic trade unionism are matters that bite deep on the Clydeside consciousness. Whatever psychological victory might have been won in the effete south was not possible at Linwood. A mass meeting almost unanimously, decided for strike action. Even then the stewards, who were as well aware as anybody of the precarious state of the company, begged the management to reconsider but without success.</p>
<p>The strike was on and so, also, was a rather unpleasant press campaign against the Chrysler strikers. <strong>The Evening Standard</strong> produced a cartoon by Jak, which showed mindless elements rushing over a precipice above the heading “Linwood lemmings”. The <strong>Daily Mail</strong> went one better and described them as nation-wrecking mercenaries. None of this was lost on the workers, who had one or two less publicised and unprintable things to say about the <strong>Evening Standard</strong> and the <strong>Daily Mail</strong>.</p>
<p>The comments of Mr Varley and Harold Wilson, who both suggested that the blame lay with the strikers, left out of account the point made with some force by Norman Buchan (MP for the constituency) that employers do not strike very often, they have other methods of exerting pressure, while for workers it is sometimes the only answer that they have.</p>
<p>In the outcome the strike that started off for a few pounds and was then elevated to a matter of principle was settled by the Advisory Conciliation and Arbitration Service. The men got the cash and retained their agreements. A complete victory you might think. Funnily enough the stewards are not crowing over this “victory”. As John Carty, the convenor says: “We want to build cars, that is how we earn our living. We did not want this strike and it is certainly no precedent for the future”. I, if nobody else, believe him.</p>
<p>If the workers side can be absolved from most of the blame, apart from a certain ingrained stubborness, then what of the management. Perhaps it is that after driving Mr Varley and the government, against their will, into the rescue plan they felt confident enough to take on the workforce at Linwood</p>
<p>In his statement issued just after his ignominious defeat Mr Lander, in an attempt to make the best of a bad job, claimed that the strike had now made it possible to start serious negotiations with National trade union officials on a number of outstanding problems. If this is so it seems a very expensive way of communicating with national officials, even given the cost of first class post these days</p>
<p>The suggestions that the strike may well have cleared the air in such a way as to facilitate the smooth introduction of the Avenger line later this year has the strong feel of post facto rationalisation. Whatever the Chrysler UK tactics may have been, there can be little doubt that there are a few uneasy heads among the management this week.</p>
<p>The moral of the story is quite a simple one, even if it has escaped Harold Wilson this time. Trade unionists may well bend quite a lot in the face of rising unemployment, but while they are still actually in a job they will not lightly let go of that which they think they have won. At Linwood the retreat was genuine enough, but it was certainly not a rout.</p>
<p>Nor can it be said, as Wilson suggested last Thursday that they are idle. For a mixed production line, the Linwood track is the fastest in Europe, turning out some 60 cars an hour. It might be a good idea now if everybody, including politicians and journalists, shut up and let them get on with producing cars.</p>
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MIA > Archive > Higgins
Jim Higgins
The lessons of Linwood
(February 1976)
From the Spectator, 14 February 1976, p.16.
Published here with kind permission of the Spectator.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Glasgow
Working in a car factory is not very pleasant – computerised production lines, repetitive work in noisy and unpleasant conditions frequently add up to a Modern Times type of alienation. The spectacular strike record of most of our motor car factories gives eloquent testimony to the fact that, even given the financial loss, it is pleasant to stop occasionally. At the Chrysler Linwood factory they have, in addition to the standard aggravations, difficulties peculiar to Linwood.
Opened in 1962, with the aid of large lumps of government money, it was intended to provide an alternative source of employment to the declining heavy industry of the Clyde. The factory, like Linwood town itself, looks as if it were put up in a bit of a hurry. Like some single-crop, banana republic its future was invested in one model, the Imp.
The labour force was “green”, not I hasten to add unskilled – the Clyde probably has more-timed-served workers than anywhere else, but certainly unused to modern mass production methods. The management were not “green” in the same way, but they certainly were not familiar with the robust independence of Glasgow workers.
The Imp was basically as good a small car as you could buy, but it had too many teething problems in its design, it was probably too late and, in any event, it never seriously challenged the Mini.
With all of these difficulties of settling down it is not very surprising that industrial relations at Linwood were not very good from the beginning. It may surprise a number of people without much knowledge of the situation, among whom we can clearly count Messrs Varley and Wilson, that over the last three years there has been very little native industrial disruption. Such stoppage as there have been were a result of difficulties outside Linwood.
The slow but steady course of Chrysler in the direction of the knackers’ yard, over the last couple of years, has not been lost on the workforce. Before Christmas 1975 the men were on a three-day week. When they left for the Christmas holiday it was assumed by many that there would be no company when they returned.
In January there was more three-day working and the trauma of the Varley-Riccardo talks. Those talks, fate and Mr Harold Lever’s faith in private enterprise resulted in the £162 million rescue bid which, incidentally, has a certain crazy logic about it. To let Chrysler go to the wall would have cost £150 million in lost revenue and unemployment payments, not to mention the loss of the Shah of Persia’s big order for cars.
Whatever the merit of the rescue operation, it was accepted by the somewhat punch-drunk Linwood workers, even though it carried the condition of 1,300 redundancies. Surprisingly, 2,300 volunteered to be made redundant – a response to the apparent lack of enthusiasm for Chrysler’s future shown by a number of government ministers, not least by Mr Varley. The attitude of several workers I spoke to was, “Why wait until everybody is sacked before looking for another job”.
It is against the background of these events that the latest Chrysler strike must be viewed. The sequence of events is complicated, but suffice it to say that there is good and sufficient evidence to conclude that the workers’ representatives were convinced that their long-standing, factory agreement and disputes procedure were being cavalierly treated by a local management, who were themselves the helpless creatures of the overall Chrysler UK management.
Matters were not at all improved by the statement made by the abrasive Mr Don Lander that: “We are here to make cars, not to go through procedures.” Whatever the subtleties of this phase of the dispute, and they will elude all but the dedicated, the Chrysler managers were obviously expecting an early cave-in by the hired help. Their expectations were, in the event, sadly disappointed. Glasgow workers and Chrysler men are nothing if not Glasgow workers, have a tradition of independence and a predeliction for complicated argument
Once the idea got abroad that the management were attempting to renege on agreements then the old Adam was roused. Craft skill and basic trade unionism are matters that bite deep on the Clydeside consciousness. Whatever psychological victory might have been won in the effete south was not possible at Linwood. A mass meeting almost unanimously, decided for strike action. Even then the stewards, who were as well aware as anybody of the precarious state of the company, begged the management to reconsider but without success.
The strike was on and so, also, was a rather unpleasant press campaign against the Chrysler strikers. The Evening Standard produced a cartoon by Jak, which showed mindless elements rushing over a precipice above the heading “Linwood lemmings”. The Daily Mail went one better and described them as nation-wrecking mercenaries. None of this was lost on the workers, who had one or two less publicised and unprintable things to say about the Evening Standard and the Daily Mail.
The comments of Mr Varley and Harold Wilson, who both suggested that the blame lay with the strikers, left out of account the point made with some force by Norman Buchan (MP for the constituency) that employers do not strike very often, they have other methods of exerting pressure, while for workers it is sometimes the only answer that they have.
In the outcome the strike that started off for a few pounds and was then elevated to a matter of principle was settled by the Advisory Conciliation and Arbitration Service. The men got the cash and retained their agreements. A complete victory you might think. Funnily enough the stewards are not crowing over this “victory”. As John Carty, the convenor says: “We want to build cars, that is how we earn our living. We did not want this strike and it is certainly no precedent for the future”. I, if nobody else, believe him.
If the workers side can be absolved from most of the blame, apart from a certain ingrained stubborness, then what of the management. Perhaps it is that after driving Mr Varley and the government, against their will, into the rescue plan they felt confident enough to take on the workforce at Linwood
In his statement issued just after his ignominious defeat Mr Lander, in an attempt to make the best of a bad job, claimed that the strike had now made it possible to start serious negotiations with National trade union officials on a number of outstanding problems. If this is so it seems a very expensive way of communicating with national officials, even given the cost of first class post these days
The suggestions that the strike may well have cleared the air in such a way as to facilitate the smooth introduction of the Avenger line later this year has the strong feel of post facto rationalisation. Whatever the Chrysler UK tactics may have been, there can be little doubt that there are a few uneasy heads among the management this week.
The moral of the story is quite a simple one, even if it has escaped Harold Wilson this time. Trade unionists may well bend quite a lot in the face of rising unemployment, but while they are still actually in a job they will not lightly let go of that which they think they have won. At Linwood the retreat was genuine enough, but it was certainly not a rout.
Nor can it be said, as Wilson suggested last Thursday that they are idle. For a mixed production line, the Linwood track is the fastest in Europe, turning out some 60 cars an hour. It might be a good idea now if everybody, including politicians and journalists, shut up and let them get on with producing cars.
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<h2>Jim Higgins</h2>
<h1>Seamen back from the brink</h1>
<h3>(September 1976)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From the <strong>Spectator</strong>, 18 September 1976, p.16.<br>
Published here with kind permission of the <strong>Spectator</strong>.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">The National Union of Seamen is an interesting little union. Its history is studded with examples of its willingness to be very unpopular with the rest of the trade union movement. Under its then General Secretary, Havelock Wilson, it was expelled from the TUC in 1926. Much more recently it was expelled for registering under the Tory Industrial Relations Act. A very long time ago one of its officials tried to shoot Emmanuel Shinwell, who happened to be running a rival Seaman’s Union at the time. All of which seems to indicate a certain spirit of independence among seafarers.</p>
<p>Most recently, of course, they have been brought back from the brink of a very damaging strike through the combined blandishments and bullying of the General Council of the TUC.</p>
<p>In the brief time that is left to us, before the next crisis occurs, it might be as well to consider one or two questions arising from the recent unpleasantness. For a start there is the strange lassitude displayed by the Government. From their conduct, one might imagine that the business, of imports and exports was the sole concern of Len Murray and Jack Jones. The Government’s sole contribution to the dispute seems to have been the rather negative stratagem of not supporting the pound, apparently in the hope of convincing the seamen of the gravity of the situation. A ploy that was almost certainly quite lost on Mr Jim Slater (NUS General Secretary) and that almost as certainly contributed to the smart rise in Minimum-Lending Rate.</p>
<p>In a way, even stranger is the conduct of the TUC. Those with good memories may recall that the TUC is the central trade union body designed to improve the pay and conditions of Trade Unionists. For the present they have taken on the role, traditionally by employers and governments, of saying “No” to demands for more money. All of this in defence of a demonstrably feeble Labour government, the strict letter of the social contract, and a handful well-worn truisms.</p>
<p>It is a piece of received wisdom, for example, that if the seamen get £2 extra, then the gates will be opened to a tidal wave of excessive wage claims. Now this can only be true if there are large numbers of trade union leaders anxiously awaiting the chance to break the social contract. Such willingness is obviously the case in the NUS; not so in the overwhelming majority of unions.</p>
<p>There will of course always be unofficial strikes but these alone cannot cause wages explosions, for that you need large-scale official action.</p>
<p>What is true that the TUC, in their anxiety to ensure adherence to the strict letter of the contract have made of the seamen a <em>cause célèbre</em>, and pointed to the prospect of obtaining benefits other than those by the social contract. Now this sort of gap in the fabric of the contract is just the sort of thing that quite a few groups of workers are looking for and no doubt we shall be hearing more such cases in the future.</p>
<p>The NUS executive now occupy a rather enviable position They will be able to represent themselves as being held back by the diktat of the TUC while avoiding the ignominy of a long drawn-out, probably unsuccessful, strike. Not only that: as Mr Jim Slater has said the net result of the TUC investigations will probably be rather more money spent on the seamen than if their original case had been met in full. As employers usually discover to their cost special payments (in the NUS case, captive time, waiting time and improved pensions) are difficult to quantify accurately and inevitably cost more than originally planned.</p>
<p>The whole case, represents a useful insight into the bureaucratic mind. The essence of the bureaucrats problem is not to ensure that money is not spent but that it should not be spent under a particular label. Like so much in trade union negotiation, the effort expended is to find an appropriate formula rather than a just solution</p>
<p>For the fact of the matter is that the seamen have suffered rather a rough deal. Their 1975 settlement was large but split into three parts, because the employers were pleading poverty. After some heart-searching the NUS agreed to defer their enjoyment of the full settlement. This generous gesture was turned against them by the introduction of the social contract and its twelve month rule. Which of course brought them smartly up against the flinty-hearted TUC.</p>
<p>It is very much an open question as to whether the non-support of the TUC would have materially affected the course of the strike had the seamen decided to go it alone. No doubt Jack Jones would have instructed his docker members to cross NUS picket lines. But the dockers even today have a very strong aversion to “blacklegging”. It would have been interesting to see whether Mr Jones had more control in the docks, than the rank and file militants. That is certainly an open question.</p>
<p>But these are but interesting speculations. The strike has been deferred for at least a fortnight, and probably for ever. In the process of this little comedy of errors, the government has proved cowardly, the TUC has proved itself inflexible, and the seamen have done rather well. If it is a story without heroes, it has at least has a victor.</p>
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MIA > Archive > Higgins
Jim Higgins
Seamen back from the brink
(September 1976)
From the Spectator, 18 September 1976, p.16.
Published here with kind permission of the Spectator.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
The National Union of Seamen is an interesting little union. Its history is studded with examples of its willingness to be very unpopular with the rest of the trade union movement. Under its then General Secretary, Havelock Wilson, it was expelled from the TUC in 1926. Much more recently it was expelled for registering under the Tory Industrial Relations Act. A very long time ago one of its officials tried to shoot Emmanuel Shinwell, who happened to be running a rival Seaman’s Union at the time. All of which seems to indicate a certain spirit of independence among seafarers.
Most recently, of course, they have been brought back from the brink of a very damaging strike through the combined blandishments and bullying of the General Council of the TUC.
In the brief time that is left to us, before the next crisis occurs, it might be as well to consider one or two questions arising from the recent unpleasantness. For a start there is the strange lassitude displayed by the Government. From their conduct, one might imagine that the business, of imports and exports was the sole concern of Len Murray and Jack Jones. The Government’s sole contribution to the dispute seems to have been the rather negative stratagem of not supporting the pound, apparently in the hope of convincing the seamen of the gravity of the situation. A ploy that was almost certainly quite lost on Mr Jim Slater (NUS General Secretary) and that almost as certainly contributed to the smart rise in Minimum-Lending Rate.
In a way, even stranger is the conduct of the TUC. Those with good memories may recall that the TUC is the central trade union body designed to improve the pay and conditions of Trade Unionists. For the present they have taken on the role, traditionally by employers and governments, of saying “No” to demands for more money. All of this in defence of a demonstrably feeble Labour government, the strict letter of the social contract, and a handful well-worn truisms.
It is a piece of received wisdom, for example, that if the seamen get £2 extra, then the gates will be opened to a tidal wave of excessive wage claims. Now this can only be true if there are large numbers of trade union leaders anxiously awaiting the chance to break the social contract. Such willingness is obviously the case in the NUS; not so in the overwhelming majority of unions.
There will of course always be unofficial strikes but these alone cannot cause wages explosions, for that you need large-scale official action.
What is true that the TUC, in their anxiety to ensure adherence to the strict letter of the contract have made of the seamen a cause célèbre, and pointed to the prospect of obtaining benefits other than those by the social contract. Now this sort of gap in the fabric of the contract is just the sort of thing that quite a few groups of workers are looking for and no doubt we shall be hearing more such cases in the future.
The NUS executive now occupy a rather enviable position They will be able to represent themselves as being held back by the diktat of the TUC while avoiding the ignominy of a long drawn-out, probably unsuccessful, strike. Not only that: as Mr Jim Slater has said the net result of the TUC investigations will probably be rather more money spent on the seamen than if their original case had been met in full. As employers usually discover to their cost special payments (in the NUS case, captive time, waiting time and improved pensions) are difficult to quantify accurately and inevitably cost more than originally planned.
The whole case, represents a useful insight into the bureaucratic mind. The essence of the bureaucrats problem is not to ensure that money is not spent but that it should not be spent under a particular label. Like so much in trade union negotiation, the effort expended is to find an appropriate formula rather than a just solution
For the fact of the matter is that the seamen have suffered rather a rough deal. Their 1975 settlement was large but split into three parts, because the employers were pleading poverty. After some heart-searching the NUS agreed to defer their enjoyment of the full settlement. This generous gesture was turned against them by the introduction of the social contract and its twelve month rule. Which of course brought them smartly up against the flinty-hearted TUC.
It is very much an open question as to whether the non-support of the TUC would have materially affected the course of the strike had the seamen decided to go it alone. No doubt Jack Jones would have instructed his docker members to cross NUS picket lines. But the dockers even today have a very strong aversion to “blacklegging”. It would have been interesting to see whether Mr Jones had more control in the docks, than the rank and file militants. That is certainly an open question.
But these are but interesting speculations. The strike has been deferred for at least a fortnight, and probably for ever. In the process of this little comedy of errors, the government has proved cowardly, the TUC has proved itself inflexible, and the seamen have done rather well. If it is a story without heroes, it has at least has a victor.
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<h2>Jim Higgins</h2>
<h1>The Prophet’s Children</h1>
<h3>(Winter 1995/96)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>Revolutionary History</strong>, <a href="../../../../history/etol/revhist/backissu.htm#v6n1" target="new">Vol. 6 No. 1</a>, Winter 1995/96, p. 197 200.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">Tim Wohlforth<br>
<strong>The Prophet’s Children: Travels on the American Left</strong><br>
<em>Humanities Press, New Jersey, 1995, pp. 332</em></p>
<p class="fst">ACCORDING TO Robert Louis Stevenson: “To travel hopefully is a better thing than to arrive, and the true success is to labour.” Whatever universal validity this particular aphorism may possess, it is the one that immediately sprang to mind when I read this account of Tim Wohlforth’s travels through the wide Sargasso Sea of Trotskyism. He travelled far and he laboured mightily, and nobody could have had higher hopes for the marbled splendour of the destination, until finally, after 30 years, he arrived at the low-rise squalor of reformism. Such a well-trodden path, such an irritating inevitability.</p>
<p>In 1953 Tim Wohlforth joined the Independent Socialist League, purveyors of the theory of bureaucratic collectivism – originated by Bruno Rizzi, codified by Joe Carter, modified by James Burnham, brought to full fruition by Max Shachtman, and most recently adopted by Sean Matgamna. For sure, the ISL was one of the better choices for a young comrade to make. It had a relaxed internal regime and a number of very talented and intelligent members, all with a profound knowledge of the movement. Unfortunately, by 1953 Shachtman was beginning the process of dumping the organisation into the soft, soggy lap of the American Socialist Party. In 1958, having signed a humiliating document which denied all connection with Lenin or revolutionary Socialism, Shachtman was allowed to take his depleted forces into the Socialist Party/Social Democratic Federation. As it happens, the SP/SDF was in an even more dilapidated condition than the ISL, and within not too long the Shachtmanites were in control, not, as you might imagine, to turn it to the left, but further to the right, aligning it even more firmly with the Democratic Party.</p>
<p>By 1957 Tim Wohlforth, together with his co-factionalists Jim Robertson, later to take the Kirk Douglas rôle in the Spartacist League, and Shane Mage, who subsequently became a follower of Timothy Leary dedicated to the proposition that the opium of the masses was alright so long as it came from the Golden Triangle, could see the writing on the wall. In great big letters, it said: <em>This lot are moving to the right, better join the Socialist Workers Party.</em> So they did.</p>
<p>The SWP was not averse to having them, because they had some recent experience of youth work, whereas the party cadre’s most recent brush with youth had been the Young Communist League in 1928. Tim makes no reference to the fact that the SWP thought bureaucratic collectivism was a reactionary theory, and adhered to the classical Trotskyist workers’ state thesis. It seems he passed from one theory to the other without breaking step. From his account the difference between the two organisations was that the ISL’s headquarters was pretty scruffy, whilst the SWP’s was pretty smart. It may be that this is a factor left out of account by us revolutionaries in our recruitment policy. Perhaps we should draw them in with the subtle texture and colouring of our soft furnishings, or slip them a membership card as they enthuse over the plush opulence of our uncut moquette. It might just work, and, for what it’s worth, I give it free to Tony Cliff, as by now he must have tried every other stratagem. Life in the SWP was dull, routine stuff. The leadership at most levels were the people from the 1930s. These were Socialists who had forgotten Lenin’s terrible warning that the worst crime a Communist could commit was to be over 50. Some, like James P. Cannon, seemed set to commit the same crime twice over. If life is dull, of course, you can always juice it up a bit by forming a faction. Sam Marcy, at about that time, showed the way. His group took the view that the Hungarian Revolution was Fascist, and that the SWP should seek an orientation to the ultra-Stalinist, Foster wing of the US Communist Party. Wohlforth was, reasonably one might think, not impressed either with the policy or the man: “... in the centre of the mass was a little animated man talking non-stop ... he had a high-pitched voice and I thought he spoke in a completely hysterical manner. Yet I noticed that the Marcyites were enthralled by his performance ... and responded to him en masse. It was my first experience with true political cult followers.” Given that Wohlforth spent the next best years of his life in thrall to that true political cult leader Gerry Healy, it is a pity that he did not pay more attention to the awful example of Sam Marcy. It would have saved him a great deal of pain.</p>
<p>The critical time came when the SWP fell in love with Fidel Castro. Cannon and his ageing cadre so wanted a revolution they could support, that they were prepared to shut their eyes to the leading rôle played by the Stalinists in Cuba, and to the suppression of the Cuban Trotskyists. Here, without doubt, was their “workers’ state”. Tim Wohlforth disagreed. For reasons not unassociated with the fact that the SWP was becoming close to the United Secretariat of the Fourth International, the carrier of the dreaded bacillus of Pabloism, Gerry Healy also disagreed with them about the progressive nature of Castro. Wohlforth had a backer, and the SWP had a new faction fight. For a short time Healy could not make up his mind between the two contenders for his favour, Robertson and Wohlforth. Robertson, however, was foolhardy enough to suppose that he was permitted to fight back when attacked, and was quickly consigned to the outer darkness (from which vantage point he sends out his followers from time to time to make everyone else’s life bloody miserable). Wohlforth was awarded Healy’s North American franchise.</p>
<p>One might have thought that the separation enforced by the Atlantic would mitigate the worst effects of the Healy regime. Not a bit of it, the Workers’ League was to become a Socialist Labour League clone forged in the furnace heat of Healy’s random and splenetic rage. Everything and everybody was to be worked and exploited to the limit of endurance and beyond. Party life was an endless round of paper sales and fund-raising, with recrimination and fault finding the punctuating light relief. Wohlforth was summoned to Clapham High Street on Gerry’s whim, charged with gross dereliction of duty, given just enough time to confess, and then stuffed on the plane back to the States. Don’t let anyone tell you it’s a rich full life, it isn’t.</p>
<p>Inevitably, ritual abuse in Clapham was not enough. The humiliation needed an appropriate audience. The opportunity presented itself at a Workers League camp in Canada. Healy arrived, and in short order he was accusing Wohlforth’s partner, Nancy, of being a CIA agent. A vote to dismiss Wohlforth as Secretary and to expel Nancy was carried, Nancy and Tim both voting for. How pathetic can you get? The last hurrah was a brief return to the SWP to discover that under Jack Barnes the party was even more besotted with Cuba than before. He spent time in Mexico and visited Coyoacan, and he went to Cuba, but his heart was no longer in it. Nowadays, apparently, he agrees politically with Robin Blick. Oh well, as the old song says: “You can tell a man that boozes by the company he chooses, whereat the pig got up and slowly walked away.”</p>
<p><strong>The Prophet’s Children</strong> is a strange book. At the end of it one does not understand why Tim Wohlforth did what he did. He was, it seems, motivated by goodwill to others, he was hardworking and unselfish, and prepared for sacrifice. But why he made those sacrifices is unclear. He thought Shachtman was a great man, and also James P. Cannon. To be fair, they certainly stood out in a field full of the vertically challenged, but to confer similar status on Healy shows a lack of judgement that sets you firmly amongst those who cannot tell Stork from butter. Still, Wohlforth has an endearing foible of larding his tale with little vignettes from everyday life. He visited a female comrade, Deborah, who worked in the party office, but was off sick. She was, it appears, not sick, just in love with him. Before you can say knife: “... we kissed passionately and started to undress each other. We staggered to her bed and were soon making passionate sweaty love.” Afterwards, Tim gets up, gets dressed, and is about to leave when the phone rings. Deborah answers the phone. “Hello, Trina”, she says, “I just fucked the Great Pumpkin.” Tim does not say so, but I think it must have been Halloween. What other explanation can there be?</p>
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MIA > Archive > Higgins
Jim Higgins
The Prophet’s Children
(Winter 1995/96)
From Revolutionary History, Vol. 6 No. 1, Winter 1995/96, p. 197 200.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Tim Wohlforth
The Prophet’s Children: Travels on the American Left
Humanities Press, New Jersey, 1995, pp. 332
ACCORDING TO Robert Louis Stevenson: “To travel hopefully is a better thing than to arrive, and the true success is to labour.” Whatever universal validity this particular aphorism may possess, it is the one that immediately sprang to mind when I read this account of Tim Wohlforth’s travels through the wide Sargasso Sea of Trotskyism. He travelled far and he laboured mightily, and nobody could have had higher hopes for the marbled splendour of the destination, until finally, after 30 years, he arrived at the low-rise squalor of reformism. Such a well-trodden path, such an irritating inevitability.
In 1953 Tim Wohlforth joined the Independent Socialist League, purveyors of the theory of bureaucratic collectivism – originated by Bruno Rizzi, codified by Joe Carter, modified by James Burnham, brought to full fruition by Max Shachtman, and most recently adopted by Sean Matgamna. For sure, the ISL was one of the better choices for a young comrade to make. It had a relaxed internal regime and a number of very talented and intelligent members, all with a profound knowledge of the movement. Unfortunately, by 1953 Shachtman was beginning the process of dumping the organisation into the soft, soggy lap of the American Socialist Party. In 1958, having signed a humiliating document which denied all connection with Lenin or revolutionary Socialism, Shachtman was allowed to take his depleted forces into the Socialist Party/Social Democratic Federation. As it happens, the SP/SDF was in an even more dilapidated condition than the ISL, and within not too long the Shachtmanites were in control, not, as you might imagine, to turn it to the left, but further to the right, aligning it even more firmly with the Democratic Party.
By 1957 Tim Wohlforth, together with his co-factionalists Jim Robertson, later to take the Kirk Douglas rôle in the Spartacist League, and Shane Mage, who subsequently became a follower of Timothy Leary dedicated to the proposition that the opium of the masses was alright so long as it came from the Golden Triangle, could see the writing on the wall. In great big letters, it said: This lot are moving to the right, better join the Socialist Workers Party. So they did.
The SWP was not averse to having them, because they had some recent experience of youth work, whereas the party cadre’s most recent brush with youth had been the Young Communist League in 1928. Tim makes no reference to the fact that the SWP thought bureaucratic collectivism was a reactionary theory, and adhered to the classical Trotskyist workers’ state thesis. It seems he passed from one theory to the other without breaking step. From his account the difference between the two organisations was that the ISL’s headquarters was pretty scruffy, whilst the SWP’s was pretty smart. It may be that this is a factor left out of account by us revolutionaries in our recruitment policy. Perhaps we should draw them in with the subtle texture and colouring of our soft furnishings, or slip them a membership card as they enthuse over the plush opulence of our uncut moquette. It might just work, and, for what it’s worth, I give it free to Tony Cliff, as by now he must have tried every other stratagem. Life in the SWP was dull, routine stuff. The leadership at most levels were the people from the 1930s. These were Socialists who had forgotten Lenin’s terrible warning that the worst crime a Communist could commit was to be over 50. Some, like James P. Cannon, seemed set to commit the same crime twice over. If life is dull, of course, you can always juice it up a bit by forming a faction. Sam Marcy, at about that time, showed the way. His group took the view that the Hungarian Revolution was Fascist, and that the SWP should seek an orientation to the ultra-Stalinist, Foster wing of the US Communist Party. Wohlforth was, reasonably one might think, not impressed either with the policy or the man: “... in the centre of the mass was a little animated man talking non-stop ... he had a high-pitched voice and I thought he spoke in a completely hysterical manner. Yet I noticed that the Marcyites were enthralled by his performance ... and responded to him en masse. It was my first experience with true political cult followers.” Given that Wohlforth spent the next best years of his life in thrall to that true political cult leader Gerry Healy, it is a pity that he did not pay more attention to the awful example of Sam Marcy. It would have saved him a great deal of pain.
The critical time came when the SWP fell in love with Fidel Castro. Cannon and his ageing cadre so wanted a revolution they could support, that they were prepared to shut their eyes to the leading rôle played by the Stalinists in Cuba, and to the suppression of the Cuban Trotskyists. Here, without doubt, was their “workers’ state”. Tim Wohlforth disagreed. For reasons not unassociated with the fact that the SWP was becoming close to the United Secretariat of the Fourth International, the carrier of the dreaded bacillus of Pabloism, Gerry Healy also disagreed with them about the progressive nature of Castro. Wohlforth had a backer, and the SWP had a new faction fight. For a short time Healy could not make up his mind between the two contenders for his favour, Robertson and Wohlforth. Robertson, however, was foolhardy enough to suppose that he was permitted to fight back when attacked, and was quickly consigned to the outer darkness (from which vantage point he sends out his followers from time to time to make everyone else’s life bloody miserable). Wohlforth was awarded Healy’s North American franchise.
One might have thought that the separation enforced by the Atlantic would mitigate the worst effects of the Healy regime. Not a bit of it, the Workers’ League was to become a Socialist Labour League clone forged in the furnace heat of Healy’s random and splenetic rage. Everything and everybody was to be worked and exploited to the limit of endurance and beyond. Party life was an endless round of paper sales and fund-raising, with recrimination and fault finding the punctuating light relief. Wohlforth was summoned to Clapham High Street on Gerry’s whim, charged with gross dereliction of duty, given just enough time to confess, and then stuffed on the plane back to the States. Don’t let anyone tell you it’s a rich full life, it isn’t.
Inevitably, ritual abuse in Clapham was not enough. The humiliation needed an appropriate audience. The opportunity presented itself at a Workers League camp in Canada. Healy arrived, and in short order he was accusing Wohlforth’s partner, Nancy, of being a CIA agent. A vote to dismiss Wohlforth as Secretary and to expel Nancy was carried, Nancy and Tim both voting for. How pathetic can you get? The last hurrah was a brief return to the SWP to discover that under Jack Barnes the party was even more besotted with Cuba than before. He spent time in Mexico and visited Coyoacan, and he went to Cuba, but his heart was no longer in it. Nowadays, apparently, he agrees politically with Robin Blick. Oh well, as the old song says: “You can tell a man that boozes by the company he chooses, whereat the pig got up and slowly walked away.”
The Prophet’s Children is a strange book. At the end of it one does not understand why Tim Wohlforth did what he did. He was, it seems, motivated by goodwill to others, he was hardworking and unselfish, and prepared for sacrifice. But why he made those sacrifices is unclear. He thought Shachtman was a great man, and also James P. Cannon. To be fair, they certainly stood out in a field full of the vertically challenged, but to confer similar status on Healy shows a lack of judgement that sets you firmly amongst those who cannot tell Stork from butter. Still, Wohlforth has an endearing foible of larding his tale with little vignettes from everyday life. He visited a female comrade, Deborah, who worked in the party office, but was off sick. She was, it appears, not sick, just in love with him. Before you can say knife: “... we kissed passionately and started to undress each other. We staggered to her bed and were soon making passionate sweaty love.” Afterwards, Tim gets up, gets dressed, and is about to leave when the phone rings. Deborah answers the phone. “Hello, Trina”, she says, “I just fucked the Great Pumpkin.” Tim does not say so, but I think it must have been Halloween. What other explanation can there be?
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<h2>Jim Higgins</h2>
<h1>How Not to Hammer Hitchens</h1>
<h3>(2002)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">Letter to <strong>What Next</strong> No.22, 2002.<br>
Copied with thanks from the <a href="http://www.whatnextjournal.co.uk/" target="new">What Next?</a> Website.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">I HAVE little doubt that Christopher Hitchens is deserving of a swift kick up the bum for his peculiar and rather hysterical support for America’s war on Afghanistan. On the evidence of his article, <em>Christopher In Khaki</em>, in <strong>What Next?</strong> No.21, it is much more doubtful that Dave Renton is the man we should trust to do the kicking. David seems overly fond of the scatter gun approach to criticism, just that sin of which he accuses Hitchens.</p>
<p>For example, David writes:</p>
<p class="quoteb">“Describing the Islamic defeat of 1683, he [Hitchens] wrote: ‘In our culture, the episode is often forgotten or downplayed, except by Catholic propagandists like Hilaire Belloc and G.K. Chesterton.’ This last reference is puzzling. Why are these two alone praised? Is it Belloc's arguments against the (‘servile’) welfare state that appeal to Hitchens now or Belloc’s 1922 book calling (in the words of one, friendly, reviewer) for ‘the elimination of the Jews’? There is something truly nauseating about an ‘anti-Nazi’ argument that could justify itself only with reference to the work of real, self-acknowledged fascists.”</p>
<p class="fst">There are quite a few things wrong with this passage. Chesterton-Belloc are not singled out for praise in Hitchens’ text, merely acknowledged as the authors of a piece on the Muslim defeat at the gates of Vienna. All talk about the Servile State or the elimination of the Jews is quite inappropriate and is included only to add a nicely prejudicial colouration to David’s narrative.</p>
<p>Dave informs us that Hitchens has never failed to back our rulers “since Thatcher and Reagan came to power”. Now Thatcher came to power in 1979 and I have a clear recollection of Chris Hitchens attacking her Falklands adventure, with some spirit, but then maybe, according to Dave Renton’s fractured logic, what he really wanted was for her to re-establish the crusader kingdom of Outremer.</p>
<p>It seems from his text that David met Hitchens for a full minute in 1999 but several of the references in the article suggest a close knowledge of his life. He apparently misses the “old Christopher Hitchens, lost to excess, alcohol and the seductive embrace of the system”. I have often thought that I only just escaped the seductive embrace of the system by my puritanical eschewing of excess and alcohol, although I did know quite a few members of the SWP whose alcohol consumption was such that excess and seductive embraces were totally beyond their powers.</p>
<p>Finally, let’s just examine another of the prejudicial little squibs in <em>Christopher in Khaki</em>:</p>
<p class="quoteb">“The great chip on Peter Hitchens’ shoulder – or so they say – is his failure to live up to the charm of his extraordinary brother. The unkindest of former friends suggest that the great chip on Christopher’s shoulder was his inability to become a second Paul Foot ...”</p>
<p class="fst">Though I cannot say whether Peter is jealous of Christopher, I can say that I knew Peter 30 years and more ago and he was charmless and talentless then, and ensuing decades have changed this not one whit. Christopher was a quite different kettle of fish, a stylish and original writer and an accomplished speaker with a great gift for conversation and conviviality. I find it difficult to believe that, even in the darker recesses of his mind, he wanted to be Paul Foot, but then I am not even certain, in the dark recesses of his mind, that Paul Foot wants to be Paul Foot.</p>
<p>Dave Renton is convinced, however, that Foot’s 40 years of subservience to the leadership of the SWP guarantees him a place among the elect. Well good luck to them – it’s a cosy, closed world, full of certainty and eventual disappointment. Chris Hitchens spent, perhaps, seven years in the International Socialists and a couple of decades or so writing articles and books from a left perspective, so naturally he is not part of the movement, although he was until 1999 sufficiently alright to be accorded a 60-second audience with Dave Renton.</p>
<p>I do not know where Chris Hitchens will finally come to rest. If he continues on his present course, and it is a well worn path along which many have gone before, then we will be able to say with certainty that he has left the movement that he adorned for so long.</p>
<p class="author">Jim Higgins</p>
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MIA > Archive > Higgins
Jim Higgins
How Not to Hammer Hitchens
(2002)
Letter to What Next No.22, 2002.
Copied with thanks from the What Next? Website.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
I HAVE little doubt that Christopher Hitchens is deserving of a swift kick up the bum for his peculiar and rather hysterical support for America’s war on Afghanistan. On the evidence of his article, Christopher In Khaki, in What Next? No.21, it is much more doubtful that Dave Renton is the man we should trust to do the kicking. David seems overly fond of the scatter gun approach to criticism, just that sin of which he accuses Hitchens.
For example, David writes:
“Describing the Islamic defeat of 1683, he [Hitchens] wrote: ‘In our culture, the episode is often forgotten or downplayed, except by Catholic propagandists like Hilaire Belloc and G.K. Chesterton.’ This last reference is puzzling. Why are these two alone praised? Is it Belloc's arguments against the (‘servile’) welfare state that appeal to Hitchens now or Belloc’s 1922 book calling (in the words of one, friendly, reviewer) for ‘the elimination of the Jews’? There is something truly nauseating about an ‘anti-Nazi’ argument that could justify itself only with reference to the work of real, self-acknowledged fascists.”
There are quite a few things wrong with this passage. Chesterton-Belloc are not singled out for praise in Hitchens’ text, merely acknowledged as the authors of a piece on the Muslim defeat at the gates of Vienna. All talk about the Servile State or the elimination of the Jews is quite inappropriate and is included only to add a nicely prejudicial colouration to David’s narrative.
Dave informs us that Hitchens has never failed to back our rulers “since Thatcher and Reagan came to power”. Now Thatcher came to power in 1979 and I have a clear recollection of Chris Hitchens attacking her Falklands adventure, with some spirit, but then maybe, according to Dave Renton’s fractured logic, what he really wanted was for her to re-establish the crusader kingdom of Outremer.
It seems from his text that David met Hitchens for a full minute in 1999 but several of the references in the article suggest a close knowledge of his life. He apparently misses the “old Christopher Hitchens, lost to excess, alcohol and the seductive embrace of the system”. I have often thought that I only just escaped the seductive embrace of the system by my puritanical eschewing of excess and alcohol, although I did know quite a few members of the SWP whose alcohol consumption was such that excess and seductive embraces were totally beyond their powers.
Finally, let’s just examine another of the prejudicial little squibs in Christopher in Khaki:
“The great chip on Peter Hitchens’ shoulder – or so they say – is his failure to live up to the charm of his extraordinary brother. The unkindest of former friends suggest that the great chip on Christopher’s shoulder was his inability to become a second Paul Foot ...”
Though I cannot say whether Peter is jealous of Christopher, I can say that I knew Peter 30 years and more ago and he was charmless and talentless then, and ensuing decades have changed this not one whit. Christopher was a quite different kettle of fish, a stylish and original writer and an accomplished speaker with a great gift for conversation and conviviality. I find it difficult to believe that, even in the darker recesses of his mind, he wanted to be Paul Foot, but then I am not even certain, in the dark recesses of his mind, that Paul Foot wants to be Paul Foot.
Dave Renton is convinced, however, that Foot’s 40 years of subservience to the leadership of the SWP guarantees him a place among the elect. Well good luck to them – it’s a cosy, closed world, full of certainty and eventual disappointment. Chris Hitchens spent, perhaps, seven years in the International Socialists and a couple of decades or so writing articles and books from a left perspective, so naturally he is not part of the movement, although he was until 1999 sufficiently alright to be accorded a 60-second audience with Dave Renton.
I do not know where Chris Hitchens will finally come to rest. If he continues on his present course, and it is a well worn path along which many have gone before, then we will be able to say with certainty that he has left the movement that he adorned for so long.
Jim Higgins
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<h2>Jim Higgins</h2>
<h1>Good soldiers?</h1>
<h3>(April 1976)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From the <strong>Spectator</strong>, 24 April 1976, p.14.<br>
Published here with kind permission of the <strong>Spectator</strong>.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">In that fine novel <strong>The Good Soldier Schweik</strong>, there is an episode, early on in the volume, where Schweik through no fault of his own is immured in a hospital ward for malingerers. There the sick and infirm are encouraged to volunteer for the front by liberal does of aspirin and vigorous applications of the stomach pump and the clyster. When it came to Schweik’s turn for the treatment he smiled sweetly and said, “Don’t spare me. it’s your duty to the Emperor ... Try hard to think that Austria rests on these clysters and victory will be ours”. And so it seems with a majority of trade union members, if the latest opinion polls are to be trusted. The three per cent, plus tax concessions, package has, apparently, the support of over two thirds of organised workers. A truly magnificent response for Mr Healey and a tribute, perhaps, to the complexity of the deal.</p>
<p>Consider: since last August wage increases have been running at a rate of ten per cent while inflation has been running at something in excess of twenty per cent. The budget policy will introduce a limit of three per cent for wage increases plus two per cent in tax concessions at a time when inflation, at the Chancellor’s best – and highly optimistic – estimate, will be running at ten per cent. Whichever way you write the figures, and the Treasury is developing a fine line in tortured dialectics on the subject, it represents two years of declining living standards.</p>
<p>Not only that the rates of inflation on such items as electricity, gas, public transport and food – all items bearing most heavily on working class budgets – will inevitably rise faster than average prices. Truly the average worker will have to close his eyes and think of England.</p>
<p>It does not end there either. A small item, not much noticed by the commentators or probably by all the trade unionists questioned, is that the present six pound limit is a supplement to wages not an addition to hourly rates. In consequence it is not calculated for overtime and other premium payments. It will also not be part of the calculation of any percentage increase in stage two. Which means that the man getting £66 per week now will have his next increase calculated on £60. Further to that, it is still unclear as to whether the increases under stage two will also be counted a supplement rather than an integral part of the hourly rate. This of course is particularly useful to those firms and industries who have a deal of overtime and shift working but it could be very dangerous in the future. At some stage it will become a part of trade union strategy to get consolidation of all the supplementary additions. When that becomes irresistible it will, at one fell swoop, add as much as fifteen per cent to certain companies’ wage bills, in additional premium payments.</p>
<p>But for all that a majority of trade unionists are showing an admirable degree of altruism about the budget proposals though there are still a number of obstacles to overcome. First of these is the problem of the TUC. To date the members of the General Council have been unnaturally quiet, apart from the ritual negotiating stance of saying: “it’s not enough”. But the apparent calm exterior and the evident desire to come to an accommodation with the Government mask a considerable disagreement between the leading trade union figures. Mr Jack Jones may have abandoned the flat rate scheme but there are still those who see the best interest of their members served in just such a scheme. Mr Scanlon takes the view that a much larger percentage-only scheme is the way to restore differentials and keep his skilled members quiet. All other things being equal he is probably right.</p>
<p>Mr Jones, eager to regain his position as the main architect of any agreement, has produced a plan for a five per cent increase, plus the tax concessions, that would be based on established bargaining units. The figure of five per cent would be calculated on the global wage bill and apportioned according to the priorities decided by the unions. Such a plan would have the advantage of introducing some flexibility into bargaining and allow regrading schemes with differential increases such as might have avoided the recent Leyland difficulties. I say, “might have avoided” because there would be considerable difficulty in persuading production workers to forgo part of their rise for the more highly skilled toolmakers. That is Mr Jones’s scheme and because it is his it must be taken seriously. Indeed, leading figures on the TUC’s Economic Committee were rather miffed to find that the only trade union leader permitted an audience, so far, with Mr Callaghan was Mr Jones. Leading to the suspicion that he was getting the inside track before an agreed policy had been hammered out within the TUC.</p>
<p>In some ways, though, these are marginal considerations. The TUC will arrive at a deal with Healey and Foot. It may be rather more inflationary than the ideal set out in the budget but not much more. The TUC, along with the overwhelming majority of their members, are now convinced that one man’s increase is another man’s price rise. It does not matter that this is an oversimplified view of economics: it is believed, and that is what counts.</p>
<p>The worry for the Government is not the achievement of some kind of deal; it is how long any deal will stick. In the unlikely event that all goes smoothly and phase two holds the line for a further twelve months from next August, it will be the longest period of wage restraint since Sir Stafford Cripps. Sir Stafford had all the advantage of a hangover of wartime controls and siege economy and a much lower level of expectation among the work force. Since then a great deal has changed and, as Mr James Prior sadly remarked in the <strong>Financial Times</strong> this week, “Public opinion is schizophrenic. It hates the abuse of power and yet does not support a government which stands up to the abuse of power by certain trade unions at the national and shop floor level.”</p>
<p>In this extremely truthful point Mr Prior gets to the heart of the problem and raises the fundamental question: how schizophrenic are the two thirds of trade unionists who accept the Healey package? That is a question that the TUC, Mr Healey and the rest would dearly like to know the answer to. On the estimation of how long the altruism will last must certainly depend the date of the next general election. With this in mind my money is on for October.</p>
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MIA > Archive > Higgins
Jim Higgins
Good soldiers?
(April 1976)
From the Spectator, 24 April 1976, p.14.
Published here with kind permission of the Spectator.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
In that fine novel The Good Soldier Schweik, there is an episode, early on in the volume, where Schweik through no fault of his own is immured in a hospital ward for malingerers. There the sick and infirm are encouraged to volunteer for the front by liberal does of aspirin and vigorous applications of the stomach pump and the clyster. When it came to Schweik’s turn for the treatment he smiled sweetly and said, “Don’t spare me. it’s your duty to the Emperor ... Try hard to think that Austria rests on these clysters and victory will be ours”. And so it seems with a majority of trade union members, if the latest opinion polls are to be trusted. The three per cent, plus tax concessions, package has, apparently, the support of over two thirds of organised workers. A truly magnificent response for Mr Healey and a tribute, perhaps, to the complexity of the deal.
Consider: since last August wage increases have been running at a rate of ten per cent while inflation has been running at something in excess of twenty per cent. The budget policy will introduce a limit of three per cent for wage increases plus two per cent in tax concessions at a time when inflation, at the Chancellor’s best – and highly optimistic – estimate, will be running at ten per cent. Whichever way you write the figures, and the Treasury is developing a fine line in tortured dialectics on the subject, it represents two years of declining living standards.
Not only that the rates of inflation on such items as electricity, gas, public transport and food – all items bearing most heavily on working class budgets – will inevitably rise faster than average prices. Truly the average worker will have to close his eyes and think of England.
It does not end there either. A small item, not much noticed by the commentators or probably by all the trade unionists questioned, is that the present six pound limit is a supplement to wages not an addition to hourly rates. In consequence it is not calculated for overtime and other premium payments. It will also not be part of the calculation of any percentage increase in stage two. Which means that the man getting £66 per week now will have his next increase calculated on £60. Further to that, it is still unclear as to whether the increases under stage two will also be counted a supplement rather than an integral part of the hourly rate. This of course is particularly useful to those firms and industries who have a deal of overtime and shift working but it could be very dangerous in the future. At some stage it will become a part of trade union strategy to get consolidation of all the supplementary additions. When that becomes irresistible it will, at one fell swoop, add as much as fifteen per cent to certain companies’ wage bills, in additional premium payments.
But for all that a majority of trade unionists are showing an admirable degree of altruism about the budget proposals though there are still a number of obstacles to overcome. First of these is the problem of the TUC. To date the members of the General Council have been unnaturally quiet, apart from the ritual negotiating stance of saying: “it’s not enough”. But the apparent calm exterior and the evident desire to come to an accommodation with the Government mask a considerable disagreement between the leading trade union figures. Mr Jack Jones may have abandoned the flat rate scheme but there are still those who see the best interest of their members served in just such a scheme. Mr Scanlon takes the view that a much larger percentage-only scheme is the way to restore differentials and keep his skilled members quiet. All other things being equal he is probably right.
Mr Jones, eager to regain his position as the main architect of any agreement, has produced a plan for a five per cent increase, plus the tax concessions, that would be based on established bargaining units. The figure of five per cent would be calculated on the global wage bill and apportioned according to the priorities decided by the unions. Such a plan would have the advantage of introducing some flexibility into bargaining and allow regrading schemes with differential increases such as might have avoided the recent Leyland difficulties. I say, “might have avoided” because there would be considerable difficulty in persuading production workers to forgo part of their rise for the more highly skilled toolmakers. That is Mr Jones’s scheme and because it is his it must be taken seriously. Indeed, leading figures on the TUC’s Economic Committee were rather miffed to find that the only trade union leader permitted an audience, so far, with Mr Callaghan was Mr Jones. Leading to the suspicion that he was getting the inside track before an agreed policy had been hammered out within the TUC.
In some ways, though, these are marginal considerations. The TUC will arrive at a deal with Healey and Foot. It may be rather more inflationary than the ideal set out in the budget but not much more. The TUC, along with the overwhelming majority of their members, are now convinced that one man’s increase is another man’s price rise. It does not matter that this is an oversimplified view of economics: it is believed, and that is what counts.
The worry for the Government is not the achievement of some kind of deal; it is how long any deal will stick. In the unlikely event that all goes smoothly and phase two holds the line for a further twelve months from next August, it will be the longest period of wage restraint since Sir Stafford Cripps. Sir Stafford had all the advantage of a hangover of wartime controls and siege economy and a much lower level of expectation among the work force. Since then a great deal has changed and, as Mr James Prior sadly remarked in the Financial Times this week, “Public opinion is schizophrenic. It hates the abuse of power and yet does not support a government which stands up to the abuse of power by certain trade unions at the national and shop floor level.”
In this extremely truthful point Mr Prior gets to the heart of the problem and raises the fundamental question: how schizophrenic are the two thirds of trade unionists who accept the Healey package? That is a question that the TUC, Mr Healey and the rest would dearly like to know the answer to. On the estimation of how long the altruism will last must certainly depend the date of the next general election. With this in mind my money is on for October.
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<h2>Alois Neurath</h2>
<h1>The Conference of the Enlarged Executive<br>
of the Communist International</h1>
<h3>(31 May 1923)</h3>
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<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1923/v03n40[22]-may-31-Inprecor-loc.pdf" target="new">Vol. 3 No. 40 [22]</a>, 31 May 1923, p. 384.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
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<p class="fst">The Session of the Enlarged Executive of the Communist International will begin on June 10. As all sections affiliated to the Third International will send delegates, the conference of the Enlarged Executive will possess all the significance of a world congress. The agenda include the most important and urgent problems of the international labor movement. Even before the IV. Congress the relations between the sections and the Executive of the Comintern were excellent, but these relations have become much more intimate since the last World Congress. The international situation of capitalist society and the exceedingly precarious political situation in all bourgeois countries, have forced the class-conscious workers to take steps towards the practical realization of the resolutions passed by the IV. World Congress. When the principles of the proletarian United front, and of the Workers’ Government, were first definitely formulated, resistance was aroused in many of our most important sections, the call for the proletarian United Front was confused with a desire to unite with social traitors; the summons to form a fighting front of the exploited was interpreted as if meaning an alliance with the social democrats, or with the leaders of the Amsterdam trade union movement. This crisis within the sections of the Third international was not so much overcome by the resolutions passed by the E.C. of the C.I.. as by the actual economic and political facts. The bourgeoisie, feeling confident that the Amsterdam secretaries would not venture on any real battle, proceeded to involve the workers of the most important branches of industry in isolated struggles, in which they were able to defeat them. These hard facts have taught the whole of the workers and their leaders that the demand for the proletarian united front is not merely an agitation catchword, but the most decisive slogan of present-day class war. The broad masses of the workers are gradually accomplishing the task of forming the united front of the exploited and are doing this against the will of the social democratic and yellow leaders. These last are beginning to find themselves in a desperate situation, and shrink from no measures which offer any prospect of strengthening their shaken position. The sections of the C.I., therefore, have still many obstacles to face in their struggle for the unity of the proletarian masses. The Enlarged Executive will have to occupy itself largely with the results of the work done in this direction since the IV. Congress.</p>
<p>The question of the workers’ government has become, in some states, a question of immediate importance much sooner than might have been expected at the time of the IV. Congress. The German proletariat has been able to acquire the best practical experiences in this respect. The German bourgeoisie realizes perhaps better than many workers, that the social-democratic-communist agreements will rapidly lead to a very definite struggle for a workers’ government for the whole country. The working masses, including not only those under the immediate influence of the German C.P., but wide masses beyond, recognize that the Communist Party is the only party possessing the necessary power and determination to lead the proletariat to emancipation from its desperate situation.</p>
<p>It is easily understood that today, when Germany’s situation is so critical, the experiences of the Kapp and Rathenau days receive different judgments within the German C.P. Revolutionary impatience on the one hand, and cautious estimation of forces on the other, have led to many differences of opinion; these have already been smoothed out for the most part, but the Enlarged Executive will occupy itself with them in detail, as it is highly desirable that this knotty point be thoroughly cleared up.</p>
<p>The so-called Ruhr action has gradually opened the eyes of the overwhelming majority of the proletariat, and has clearly exposed the intentions of the French and German bourgeoisies. The Ruhr crisis is not merely a crisis between the German bourgeoisie and French imperialism, but the crisis of capitalist world economics, in 1914 the various groups of the world bourgeoisie were able to carry on a bloody war in their own interests, at the expense and with the aid of the working class. Today the bourgeoisie encounters immediate resistance, first from the masses led by the Communist Party, and then, in the course of action, from the serious opposition of the decisive strata of the working population. The world bourgeoisie is fully aware that the beginning of every war is a fateful hour for the bourgeoisie. First it endeavors to employ every conceivable means of overcoming the conflict of interests in its own camp, and then it seeks forcefully to increase the exploitation of the proletariat But it becomes more and more difficult to overcome these great obstacles by “peaceful means”. The ruling class in the present social order cannot escape its destiny, it cannot avoid the bloody collisions in its own ranks, that is, it has not been able to prevent the economic decay of the capitalist social order from having already provided, to a very great extent, the prerequisites for the successful class war of the proletariat. The discuss on of the lessons taught by the Ruhr action will doubtless form the central point of the deliberations of the Enlarged Executive.</p>
<p>As the masses lose faith in the Amsterdamers and social democratic leaders, the ruling class sets proportionately less store upon the coalition with its socialist brothers so indispensable and invaluable to it during the critical period following the collapse of the war. The bourgeoisie now begins to deal out kicks and blows to its friends of yesterday; but the worse treatment the social imperialists receive at the hands of the bourgeoisie, the greater the emphasis with they proclaim their love for the coalition with the exploiters of the proletariat. And with good reason. Scheidemann, Noske, Hilferding, & Co. know very well that their positions in the labor movement are irretrievably lost. Therefore they continue to permit themselves to be used for the purposes of the ruling class, in a more despicable manner than ever, and finally, they will be thrown over by the bourgeoisie as useless tools. The social democrats being of no further use to the bourgeoisie, the ruling class is now raising a fresh guard in the form of the Fascist movement, hoping that this will defend the interests of the exploiters even better than the social democrats. Fascism at the same time represents the mobilization of all the remaining political reserves of the counter-revolution. The danger of Fascism, which is receiving every possible support from the dominant party, is exceedingly great. In order systematically and steadily to make its preparations for the inevitable, protracted and decisive struggle with the proletariat, the bourgeoisie is destroying all the so-called rights and liberties said to have been won by democracy, and is applauded in this by all parties following the principles of democracy. The exceptional laws issued in Poland, Yugoslavia, Czechoslovakia, etc., will be followed by similar laws in other important capitalist states. It is hoped to break the increasing resistance of the working masses lor a long time to come by placing the communist movement, or rather its organizations, completely outside the law. The experiences undergone by the Italian proletariat, and the latest events in Czecho-Slovakia, in German-Austria, Germany, and the Balkan states, will play a leading part in the discussions of the Enlarged Executive.</p>
<p>The Ruhr action, the workers’ and peasants’ government the proletarian united front, trade unions tactics, national problems, the question of agitation among small farmers – all these important questions are to be thoroughly considered. The delegates of the various sections of the C.I. will return to their countries thoroughly informed on the political events of the most important states, enlightened concerning the experiences gained in the latest great political and economic struggles in almost all capitalist states, and acquainted – thanks to the detailed discussions – with every line of tactics required for the immediate future; they will thus be enabled to continue their work with even greater success than before.</p>
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MIA > Archive > Neurath
Alois Neurath
The Conference of the Enlarged Executive
of the Communist International
(31 May 1923)
From International Press Correspondence, Vol. 3 No. 40 [22], 31 May 1923, p. 384.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
The Session of the Enlarged Executive of the Communist International will begin on June 10. As all sections affiliated to the Third International will send delegates, the conference of the Enlarged Executive will possess all the significance of a world congress. The agenda include the most important and urgent problems of the international labor movement. Even before the IV. Congress the relations between the sections and the Executive of the Comintern were excellent, but these relations have become much more intimate since the last World Congress. The international situation of capitalist society and the exceedingly precarious political situation in all bourgeois countries, have forced the class-conscious workers to take steps towards the practical realization of the resolutions passed by the IV. World Congress. When the principles of the proletarian United front, and of the Workers’ Government, were first definitely formulated, resistance was aroused in many of our most important sections, the call for the proletarian United Front was confused with a desire to unite with social traitors; the summons to form a fighting front of the exploited was interpreted as if meaning an alliance with the social democrats, or with the leaders of the Amsterdam trade union movement. This crisis within the sections of the Third international was not so much overcome by the resolutions passed by the E.C. of the C.I.. as by the actual economic and political facts. The bourgeoisie, feeling confident that the Amsterdam secretaries would not venture on any real battle, proceeded to involve the workers of the most important branches of industry in isolated struggles, in which they were able to defeat them. These hard facts have taught the whole of the workers and their leaders that the demand for the proletarian united front is not merely an agitation catchword, but the most decisive slogan of present-day class war. The broad masses of the workers are gradually accomplishing the task of forming the united front of the exploited and are doing this against the will of the social democratic and yellow leaders. These last are beginning to find themselves in a desperate situation, and shrink from no measures which offer any prospect of strengthening their shaken position. The sections of the C.I., therefore, have still many obstacles to face in their struggle for the unity of the proletarian masses. The Enlarged Executive will have to occupy itself largely with the results of the work done in this direction since the IV. Congress.
The question of the workers’ government has become, in some states, a question of immediate importance much sooner than might have been expected at the time of the IV. Congress. The German proletariat has been able to acquire the best practical experiences in this respect. The German bourgeoisie realizes perhaps better than many workers, that the social-democratic-communist agreements will rapidly lead to a very definite struggle for a workers’ government for the whole country. The working masses, including not only those under the immediate influence of the German C.P., but wide masses beyond, recognize that the Communist Party is the only party possessing the necessary power and determination to lead the proletariat to emancipation from its desperate situation.
It is easily understood that today, when Germany’s situation is so critical, the experiences of the Kapp and Rathenau days receive different judgments within the German C.P. Revolutionary impatience on the one hand, and cautious estimation of forces on the other, have led to many differences of opinion; these have already been smoothed out for the most part, but the Enlarged Executive will occupy itself with them in detail, as it is highly desirable that this knotty point be thoroughly cleared up.
The so-called Ruhr action has gradually opened the eyes of the overwhelming majority of the proletariat, and has clearly exposed the intentions of the French and German bourgeoisies. The Ruhr crisis is not merely a crisis between the German bourgeoisie and French imperialism, but the crisis of capitalist world economics, in 1914 the various groups of the world bourgeoisie were able to carry on a bloody war in their own interests, at the expense and with the aid of the working class. Today the bourgeoisie encounters immediate resistance, first from the masses led by the Communist Party, and then, in the course of action, from the serious opposition of the decisive strata of the working population. The world bourgeoisie is fully aware that the beginning of every war is a fateful hour for the bourgeoisie. First it endeavors to employ every conceivable means of overcoming the conflict of interests in its own camp, and then it seeks forcefully to increase the exploitation of the proletariat But it becomes more and more difficult to overcome these great obstacles by “peaceful means”. The ruling class in the present social order cannot escape its destiny, it cannot avoid the bloody collisions in its own ranks, that is, it has not been able to prevent the economic decay of the capitalist social order from having already provided, to a very great extent, the prerequisites for the successful class war of the proletariat. The discuss on of the lessons taught by the Ruhr action will doubtless form the central point of the deliberations of the Enlarged Executive.
As the masses lose faith in the Amsterdamers and social democratic leaders, the ruling class sets proportionately less store upon the coalition with its socialist brothers so indispensable and invaluable to it during the critical period following the collapse of the war. The bourgeoisie now begins to deal out kicks and blows to its friends of yesterday; but the worse treatment the social imperialists receive at the hands of the bourgeoisie, the greater the emphasis with they proclaim their love for the coalition with the exploiters of the proletariat. And with good reason. Scheidemann, Noske, Hilferding, & Co. know very well that their positions in the labor movement are irretrievably lost. Therefore they continue to permit themselves to be used for the purposes of the ruling class, in a more despicable manner than ever, and finally, they will be thrown over by the bourgeoisie as useless tools. The social democrats being of no further use to the bourgeoisie, the ruling class is now raising a fresh guard in the form of the Fascist movement, hoping that this will defend the interests of the exploiters even better than the social democrats. Fascism at the same time represents the mobilization of all the remaining political reserves of the counter-revolution. The danger of Fascism, which is receiving every possible support from the dominant party, is exceedingly great. In order systematically and steadily to make its preparations for the inevitable, protracted and decisive struggle with the proletariat, the bourgeoisie is destroying all the so-called rights and liberties said to have been won by democracy, and is applauded in this by all parties following the principles of democracy. The exceptional laws issued in Poland, Yugoslavia, Czechoslovakia, etc., will be followed by similar laws in other important capitalist states. It is hoped to break the increasing resistance of the working masses lor a long time to come by placing the communist movement, or rather its organizations, completely outside the law. The experiences undergone by the Italian proletariat, and the latest events in Czecho-Slovakia, in German-Austria, Germany, and the Balkan states, will play a leading part in the discussions of the Enlarged Executive.
The Ruhr action, the workers’ and peasants’ government the proletarian united front, trade unions tactics, national problems, the question of agitation among small farmers – all these important questions are to be thoroughly considered. The delegates of the various sections of the C.I. will return to their countries thoroughly informed on the political events of the most important states, enlightened concerning the experiences gained in the latest great political and economic struggles in almost all capitalist states, and acquainted – thanks to the detailed discussions – with every line of tactics required for the immediate future; they will thus be enabled to continue their work with even greater success than before.
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<h2>Alois Neurath</h2>
<h4>The Labor Movement</h4>
<h1>The Offensive of the Czech Exploiters</h1>
<h3>(28 March 1922)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1922/v02n024-mar-28-1922-inprecor.pdf" target="new">Vol. 2 No. 24</a>, 28 March 1922, pp. 182–183.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
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<p class="fst">After the defeat of the miners, the other employer groups are not permitting the favorable occasion to slip by, and are also beginning to attack. The exploiters of the glass industry have made the beginning. For several weeks the employers and the glass workers have been at loggerheads. In the glass industry, “home work ” is still very extensive and the exploitation of the wage earners is therefore greater than in any other branch of industry A few weeks ago the workers asked for a small increase in wages. As a result of the “glorious” conclusion of the miners’ strike, the employers answered with an announcement that they intended to decrease wages to the extent of 20, 30 and more per cent. The trade-union leaders and the Social Democratic papers announced a relentless struggle against the employers m regard to the reduction of wages, We draw attention to the fact that the trade-union bureaucracy had the opportunity of convincing themselves during the last struggle that the capitalists are not frightened by talk, and that the exploiters ignored all the recommendations of the government. The workers – not alone those organized as Communists – know very well (and the trade-union bureaucracy also know it), that in no serious affair has the government been able to restrain the capitalists. The government dances as the employers whistle, and the capitalists know how to whistle.</p>
<p>The representatives of the workers demand the intervention of the government. For tactical reasons nothing can be said against this. No harm is done if this simple and valuable truth is continually demonstrated anew to all of the workers that the government not only does not [do] anything that is against the interests of the capitalists, but that when a serious occasion arrives it is to be found with all of the powers at the disposal of the state on the side of the exploiters. Till recently the employers have for tactical reasons played the game and permitted the mediation of the government.</p>
<p>In the struggle between the employers and the workers in the glass industry the capitalists are not acting as wisely as their colleagues, the mine-owners. They feel their strength and evidently expect that there is a big difference between the words of the trade-union leaders and their actions. The Ministry for Social Welfare invited the representatives of the workers and the employers to a mutual conference on Wednesday, March 8th. The capitalists declared that they have no use for any mediation, that they do not need any discussions and demanded that before a conference take place the workers accept the demands of the employers. The conference, however, took place and a representative of the employers also took part who added to the forwardness of the employers his own contempt and declared that he had merely come <em>to enjoy himself personally</em>. This “lack of manners" was even too much for the representative of the Ministry. The latter could not permit it to be so openly revealed that the employers are sure of the support of the government. Therefore the representative of the Ministry tried to call the representative of the employers to order. Hereupon the man rose and contemptuously left the conference.</p>
<p>Thus the employers intend not only to reject the demands of the workers (this the employers no longer mention), but to cut wages considerably. The trade-union bureaucracy still has time to act in order to prevent the employers from treating the workers as entirely helpless slaves. But so much is certain, that the capitalists must be made to feel that the representatives of the workers are not only going to take up the struggle, but are also going to carry it through together with the aid of the workers of outer industrial groups. Even if a comparatively small group of worker is concerned, its defeat can only be prevented if all the labor parties and above all the representatives of the Trade-Union Federation convoke a general conference to discuss the measures that will have to be taken by larger sections of the proletariat than are now involved in the struggle. It remains to be seen whether the trade-union leaders are able to draw the correct consequences from the recent struggle of the miners.</p>
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MIA > Archive > Neurath
Alois Neurath
The Labor Movement
The Offensive of the Czech Exploiters
(28 March 1922)
From International Press Correspondence, Vol. 2 No. 24, 28 March 1922, pp. 182–183.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
After the defeat of the miners, the other employer groups are not permitting the favorable occasion to slip by, and are also beginning to attack. The exploiters of the glass industry have made the beginning. For several weeks the employers and the glass workers have been at loggerheads. In the glass industry, “home work ” is still very extensive and the exploitation of the wage earners is therefore greater than in any other branch of industry A few weeks ago the workers asked for a small increase in wages. As a result of the “glorious” conclusion of the miners’ strike, the employers answered with an announcement that they intended to decrease wages to the extent of 20, 30 and more per cent. The trade-union leaders and the Social Democratic papers announced a relentless struggle against the employers m regard to the reduction of wages, We draw attention to the fact that the trade-union bureaucracy had the opportunity of convincing themselves during the last struggle that the capitalists are not frightened by talk, and that the exploiters ignored all the recommendations of the government. The workers – not alone those organized as Communists – know very well (and the trade-union bureaucracy also know it), that in no serious affair has the government been able to restrain the capitalists. The government dances as the employers whistle, and the capitalists know how to whistle.
The representatives of the workers demand the intervention of the government. For tactical reasons nothing can be said against this. No harm is done if this simple and valuable truth is continually demonstrated anew to all of the workers that the government not only does not [do] anything that is against the interests of the capitalists, but that when a serious occasion arrives it is to be found with all of the powers at the disposal of the state on the side of the exploiters. Till recently the employers have for tactical reasons played the game and permitted the mediation of the government.
In the struggle between the employers and the workers in the glass industry the capitalists are not acting as wisely as their colleagues, the mine-owners. They feel their strength and evidently expect that there is a big difference between the words of the trade-union leaders and their actions. The Ministry for Social Welfare invited the representatives of the workers and the employers to a mutual conference on Wednesday, March 8th. The capitalists declared that they have no use for any mediation, that they do not need any discussions and demanded that before a conference take place the workers accept the demands of the employers. The conference, however, took place and a representative of the employers also took part who added to the forwardness of the employers his own contempt and declared that he had merely come to enjoy himself personally. This “lack of manners" was even too much for the representative of the Ministry. The latter could not permit it to be so openly revealed that the employers are sure of the support of the government. Therefore the representative of the Ministry tried to call the representative of the employers to order. Hereupon the man rose and contemptuously left the conference.
Thus the employers intend not only to reject the demands of the workers (this the employers no longer mention), but to cut wages considerably. The trade-union bureaucracy still has time to act in order to prevent the employers from treating the workers as entirely helpless slaves. But so much is certain, that the capitalists must be made to feel that the representatives of the workers are not only going to take up the struggle, but are also going to carry it through together with the aid of the workers of outer industrial groups. Even if a comparatively small group of worker is concerned, its defeat can only be prevented if all the labor parties and above all the representatives of the Trade-Union Federation convoke a general conference to discuss the measures that will have to be taken by larger sections of the proletariat than are now involved in the struggle. It remains to be seen whether the trade-union leaders are able to draw the correct consequences from the recent struggle of the miners.
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<h2>Alois Neurath</h2>
<h1>Report of the Balkan, Swiss<br>
and Austrian Commissions</h1>
<h4>The Enlarged Executive: Eleventh Day of Session</h4>
<h3>(23 June 1923)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1923/v03n52-jul-23-Inprecor-loc.pdf" target="new">Vol. 3 No. 52</a>, 23 July 1923, pp. 547–548.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2022). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="date">June 23, 1923</p>
<p class="fst"><em>Neurath</em> presented a report of the Balkan, Swiss and Austrian Commissions.</p>
<p>He proposed that the settlement of the Balkan Question, particularly as regards Jugoslavia, should be handed over to the Presidium. The resolutions on the Swiss Question were adopted unanimously by the Commission. The Austrian Commission, also, came to differences in principle between the two fractions, the majority and the minority. The Commission adopted a decision to the effect that the Executive of the Austrian Communist Party should be obliged to invite representatives of the minority to all Party work, including political work. We expect that the Austrian Party Executive will carry out this decision loyally. The Austrian Party is not so strong as to permit itself the luxury of excluding a section from collaboration in political work. We hope that on this basis the differences of a personal nature that still remain will be completely liquidated.</p>
<p>The Resolutions on the Swiss and Austrian Questions were adopted unanimously.</p>
<h4>*</h4>
<a name="sw"></a>
<h3>Swiss Question</h3>
<h4>Propagandist Activity</h4>
<p class="fst">The Swiss Communist Party has a relatively small membership, for it numbers from 4,500 to 4,800 paid-up members, as against 30,000 members of the Social-democratic Party. Moreover, taking into consideration that the Swiss Trade Unions have an approximate membership of a quarter of a million workers, it is no exaggeration to say that the numerical strength of the Party is not in proportion to the strength of the Labor movement as a whole, which naturally includes the trade unions, it appears that the Swiss Party Executive was concerned about the maintenance of a so-called “Pure Communist Party”. In this connection we draw their attention to the following: the Russian Communist Party, which has been victorious in the social revolution and which now possesses the means of Power in the Russian State, is the target for the world reaction as a whole. It finds itself in the position of a defensive army in a beleaguered fortress. This Party must be careful to restrict its ranks to proven Communists. Those sections of the Communist International which have yet to organise and to wage the fight against the governing classes of their respective countries, who have yet to gain the sympathies of the large (passes of the population, if not a direct majority, cannot afford the luxury of creating a so-called “Pure Party”, which should embrace only an infinitesimal minority of the class conscious proletariat. The Swiss Party has to develop an intense campaign for membership, so as to gain many new members. The Communist Party must seek not only immediate influence over the masses of the workers, but also indirect influence over the greatest possible portion of the working class, if it wants to fulfill its revolutionary tasks.<br>
</p>
<h4>The Party’s Enterprises</h4>
<p class="fst">We repeat once again that the Swiss Party Executive is not only entitled, but it is also its duty to see to it that all the enterprises of the Party should be under the control of the Executive. The Party Executive is responsible to the Party and to the Communist International not only for its general policies, but also for all the economic and other matters appertaining to the Party. This responsibility can be borne by the Party provided it has also the right of decisive influence, i.e. control, over all the enterprises of the Party.</p>
<p>The Enlarged Executive of the Communist International confirms the decisions of the Presidium of the 15th March, 1923, with regard to the tactical methods within the Swiss Communist Party. The Enlarged Executive refers once again to the important questions which already occupied the attention of the Presidium.<br>
</p>
<h4>On the Trade Union Question</h4>
<p class="fst">Only in as much as the Party takes care of the so-called everyday cares of the working class, in as much as it endeavours to influence the conduct of Trade Union struggles, to that extent the Party will be able to gain the increasing confidence of the organised workers of the Trade Unions. Our representatives in the Trade Union Movement must be guided in their activities by the Fourth World Congress of the Communist International, and above all by those of the R.I.LU. Congress. The activity of our comrades in the Trade Unions must be deliberately supported and promoted by the Party Press. Hence it follows the Party Press must give its most thorough attention to the problems of the economic struggle of the proletariat</p>
<p>The thesis advocated by the Trade Union leaders, Wys and Kopp, to the effect that the Party should give the least possible attention to Trade Union organization matters, is certainly absolutely wrong. It is true the direct influencing of the Trade Union movement by the Communist Party should not be emphasised at all times and at every opportunity. The main thing is that the Communist Party, or its representatives, should be actually in a position to influence the trade Union struggles in the spirit of the decisions of our World Congresses, and to compel the present nominal leaders of the trade unions, to act in the interest of the large masses of the working class, and thus to put the trade unions at the service of the class struggle.</p>
<h4>*</h4>
<a name="au"></a>
<h3>Austrian Question</h3>
<p class="fst">The following are the main characteristics of the present situation in Austria: a) the complete dependence of Austria upon the Entente, whose representative is the unrestricted lord of the country; b) the extreme reactionary policy of Seipel, winch is directed exclusively against the Austrian working class; c) the strength of Fascism, the organizations of which are already making the first attempts to smash the Workers’ organizations and to crush the workers in blood; d) the strengthening of the monarchist organizations which hope foi the restoration; e) an extremely acute economic situation, rise in the cost of living, tremendous unemployment; f) the situation of the working class becoming steadily more acute, owing to the attempts of the capitalists to reduce the wages of the workers which are already far behind the increased cost of living, and to the growth of unemployment and the worsening of the conditions of labour.</p>
<p>Owing to the above economic and political reasons, the class war in Austria is becoming more critical and armed collisions have already occurred.</p>
<p>The Austrian Social-Democratic Party, which was once the strong-hold of the former 2½ International, is pursuing its policy of betraying the interests of the Austrian working class, of impotence in face of the capitalist offensive, and of supporting the bourgeoisie. The working class masses, and even certain Social-Democratic organizations, are becoming steadily disillusioned by this policy and are setting themselves in opposition to the leaders, as tn the case of certain strikes which were initiated in spite of the decision of the central organs of the Social-Democratic Party, and of other actions undertaken by the working class.</p>
<p>These circumstances should induce the Austrian Communist Party to pursue its political policy with especial energy and perspicuity and to devote its attention to attracting working masses into the struggle against the capitalist offensive and against Fascism and also to the slogans connected with the following important tasks of the Party:<br>
</p>
<h4>Workers’ and Peasants’ Government</h4>
<p class="fst">It is the duty of the Austrian Communist Party as of every other Section of the Communist International, to conduct a clear propaganda in the sense ol the decisions of the Fourth World Congress and of the Enlarged Executive with regard to a Workers’ and Peasants’ Government. The fight against the Seipel Government or against a coalition government with the Social-Democrats cannot be conducted successfully, nor taken up seriously by the revolutionary workers of Austria, if the Austrian Communist Party is not in a position to bring forward a definite aim for the struggle. A Workers’ and Peasants’ Government 16 consequently not merely a propaganda slogan, but a slogan of action. The agitation of the Austrian Communist Party, as far as concerns a Workers’ and Peasants’ Government, will be without effect and will remain incomprehensible to the broad masses, if the Party does not succeed in creating a practical, i.e. organisational and agitational, close contact with the agricultural population. It is in this very sense that the Austrian Communist Party has not proved itself equal to its task.<br>
</p>
<h4>Electoral Policy</h4>
<p class="fst">The Austrian Communist Party must participate independently in the elections. It can adopt a common electoral platform only with the opposition trade union bloc In its electoral program the Party must make clear its communist point of view. The Austrian Party must conduct the election campaign mainly on the questions of the fight against Fascism, the Christian-Socialist Government, against the Coalition Government, and for a Workers’ and Peasants’ Government. If the Party conducts its work well on this basis, if it fulfils its duties in the sphere of trade union activity and in agitation and propaganda, not only among the proletarian sections of the people, but also among the petty bourgeoisie and semi-proletarian masses, and above all among the agricultural proletariat, it will be in a position to obtain the votes not only of the conscious revolutionary class fighters, but also a part of the votes of the honest opponents of capitalism. It goes without saying that the Communist Party of Austria must expose the treacherous attitude towards the workers on the part of the Social-Democratic Party.<br>
</p>
<h4>The Trade Union Question</h4>
<p class="fst">The Trade Union tactics of the Communist Party of Austria, in the main express the decisions of the Fourth Congress of the Profintern. In this sphere of its tactics the Communist Party of Austria has already certain successes to record. Recently, however, the responsible bodies of the Party have permitted certain serious errors to be committed in the sphere of trade unionism. It appears from the reports submitted by Comrades Koritschoner and Frey that responsible trade union officials of the Communist Party of Austria, during negotiations over wages, are not always acted according to the principles formulated by the Red International of Labor Unions. In every wages campaign, the attitude of our officials must be well considered, well prepared, and above all, unitedly and compactly represented. The Party must combat the reformists, not only by its criticism but also by positive proposals. At every meeting of wages committees, factory councils conferences, etc., the representatives of the revolutionary bloc must always represent the principles of the Red International of Labor Unions. This must be done even at the risk of our comrades being expelled front these bodies by the reformists. Under no circumstances should communist officials strive to secure the right to participate in any campaign for wages negotiations at the price of sacrificing our principles.</p>
<p>At the conclusions of wages movements, which have ended unsuccessfully as a consequence of the tactics of the reformists, a thorough estimation of the movement must be made in the press and particularly in the factories giving a definite outline of our position.<br>
</p>
<h4>The Youth Organisation</h4>
<p class="fst">Without going into the details of the differences between the Communist Party of Austria and the Young Communist League of Austria, it must be generally stated here that the Party must bring about good relations with the Youth Organisation. The Party must strive always to maintain good relations with the Youth Organisation. On the basis of the decisions laid down by the CI (YCI), politically and tactically the Youth Organisation is subordinate to the Party. Nevertheless, in accordance with international decisions, the organisational independence of the Youth’s Organisation is not hereby limited. In the Youth’s Organisation, as well as in the Party, all factionalism must cease.<br>
</p>
<h4>The Party Newspaper</h4>
<p class="fst">It has been established that the editorial staff of the <strong>Rote Fahne</strong> has not always understood how to be politically realistic. We refer here to the assassination of Comrade Vorovsky, to the Unity Congress of the Second and 2½ International, and last but not least to the propaganda for the Labor Government. The editorial staff of <strong>Rote Fahne</strong> has given but little attention to these questions in every respect. The Party press must, more than hitherto, give prominence to news and facts and deal with the events of the day in their social connection and at the same time advocate the slogans of the Comintern.<br>
</p>
<h4>Personal</h4>
<p class="fst">The representatives of both factions undertake to put an end to all personal and factional conflicts and ruthlessly oppose any attempt to renew them.</p>
<p class="link"> <br>
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MIA > Archive > Neurath
Alois Neurath
Report of the Balkan, Swiss
and Austrian Commissions
The Enlarged Executive: Eleventh Day of Session
(23 June 1923)
From International Press Correspondence, Vol. 3 No. 52, 23 July 1923, pp. 547–548.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2022). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
June 23, 1923
Neurath presented a report of the Balkan, Swiss and Austrian Commissions.
He proposed that the settlement of the Balkan Question, particularly as regards Jugoslavia, should be handed over to the Presidium. The resolutions on the Swiss Question were adopted unanimously by the Commission. The Austrian Commission, also, came to differences in principle between the two fractions, the majority and the minority. The Commission adopted a decision to the effect that the Executive of the Austrian Communist Party should be obliged to invite representatives of the minority to all Party work, including political work. We expect that the Austrian Party Executive will carry out this decision loyally. The Austrian Party is not so strong as to permit itself the luxury of excluding a section from collaboration in political work. We hope that on this basis the differences of a personal nature that still remain will be completely liquidated.
The Resolutions on the Swiss and Austrian Questions were adopted unanimously.
*
Swiss Question
Propagandist Activity
The Swiss Communist Party has a relatively small membership, for it numbers from 4,500 to 4,800 paid-up members, as against 30,000 members of the Social-democratic Party. Moreover, taking into consideration that the Swiss Trade Unions have an approximate membership of a quarter of a million workers, it is no exaggeration to say that the numerical strength of the Party is not in proportion to the strength of the Labor movement as a whole, which naturally includes the trade unions, it appears that the Swiss Party Executive was concerned about the maintenance of a so-called “Pure Communist Party”. In this connection we draw their attention to the following: the Russian Communist Party, which has been victorious in the social revolution and which now possesses the means of Power in the Russian State, is the target for the world reaction as a whole. It finds itself in the position of a defensive army in a beleaguered fortress. This Party must be careful to restrict its ranks to proven Communists. Those sections of the Communist International which have yet to organise and to wage the fight against the governing classes of their respective countries, who have yet to gain the sympathies of the large (passes of the population, if not a direct majority, cannot afford the luxury of creating a so-called “Pure Party”, which should embrace only an infinitesimal minority of the class conscious proletariat. The Swiss Party has to develop an intense campaign for membership, so as to gain many new members. The Communist Party must seek not only immediate influence over the masses of the workers, but also indirect influence over the greatest possible portion of the working class, if it wants to fulfill its revolutionary tasks.
The Party’s Enterprises
We repeat once again that the Swiss Party Executive is not only entitled, but it is also its duty to see to it that all the enterprises of the Party should be under the control of the Executive. The Party Executive is responsible to the Party and to the Communist International not only for its general policies, but also for all the economic and other matters appertaining to the Party. This responsibility can be borne by the Party provided it has also the right of decisive influence, i.e. control, over all the enterprises of the Party.
The Enlarged Executive of the Communist International confirms the decisions of the Presidium of the 15th March, 1923, with regard to the tactical methods within the Swiss Communist Party. The Enlarged Executive refers once again to the important questions which already occupied the attention of the Presidium.
On the Trade Union Question
Only in as much as the Party takes care of the so-called everyday cares of the working class, in as much as it endeavours to influence the conduct of Trade Union struggles, to that extent the Party will be able to gain the increasing confidence of the organised workers of the Trade Unions. Our representatives in the Trade Union Movement must be guided in their activities by the Fourth World Congress of the Communist International, and above all by those of the R.I.LU. Congress. The activity of our comrades in the Trade Unions must be deliberately supported and promoted by the Party Press. Hence it follows the Party Press must give its most thorough attention to the problems of the economic struggle of the proletariat
The thesis advocated by the Trade Union leaders, Wys and Kopp, to the effect that the Party should give the least possible attention to Trade Union organization matters, is certainly absolutely wrong. It is true the direct influencing of the Trade Union movement by the Communist Party should not be emphasised at all times and at every opportunity. The main thing is that the Communist Party, or its representatives, should be actually in a position to influence the trade Union struggles in the spirit of the decisions of our World Congresses, and to compel the present nominal leaders of the trade unions, to act in the interest of the large masses of the working class, and thus to put the trade unions at the service of the class struggle.
*
Austrian Question
The following are the main characteristics of the present situation in Austria: a) the complete dependence of Austria upon the Entente, whose representative is the unrestricted lord of the country; b) the extreme reactionary policy of Seipel, winch is directed exclusively against the Austrian working class; c) the strength of Fascism, the organizations of which are already making the first attempts to smash the Workers’ organizations and to crush the workers in blood; d) the strengthening of the monarchist organizations which hope foi the restoration; e) an extremely acute economic situation, rise in the cost of living, tremendous unemployment; f) the situation of the working class becoming steadily more acute, owing to the attempts of the capitalists to reduce the wages of the workers which are already far behind the increased cost of living, and to the growth of unemployment and the worsening of the conditions of labour.
Owing to the above economic and political reasons, the class war in Austria is becoming more critical and armed collisions have already occurred.
The Austrian Social-Democratic Party, which was once the strong-hold of the former 2½ International, is pursuing its policy of betraying the interests of the Austrian working class, of impotence in face of the capitalist offensive, and of supporting the bourgeoisie. The working class masses, and even certain Social-Democratic organizations, are becoming steadily disillusioned by this policy and are setting themselves in opposition to the leaders, as tn the case of certain strikes which were initiated in spite of the decision of the central organs of the Social-Democratic Party, and of other actions undertaken by the working class.
These circumstances should induce the Austrian Communist Party to pursue its political policy with especial energy and perspicuity and to devote its attention to attracting working masses into the struggle against the capitalist offensive and against Fascism and also to the slogans connected with the following important tasks of the Party:
Workers’ and Peasants’ Government
It is the duty of the Austrian Communist Party as of every other Section of the Communist International, to conduct a clear propaganda in the sense ol the decisions of the Fourth World Congress and of the Enlarged Executive with regard to a Workers’ and Peasants’ Government. The fight against the Seipel Government or against a coalition government with the Social-Democrats cannot be conducted successfully, nor taken up seriously by the revolutionary workers of Austria, if the Austrian Communist Party is not in a position to bring forward a definite aim for the struggle. A Workers’ and Peasants’ Government 16 consequently not merely a propaganda slogan, but a slogan of action. The agitation of the Austrian Communist Party, as far as concerns a Workers’ and Peasants’ Government, will be without effect and will remain incomprehensible to the broad masses, if the Party does not succeed in creating a practical, i.e. organisational and agitational, close contact with the agricultural population. It is in this very sense that the Austrian Communist Party has not proved itself equal to its task.
Electoral Policy
The Austrian Communist Party must participate independently in the elections. It can adopt a common electoral platform only with the opposition trade union bloc In its electoral program the Party must make clear its communist point of view. The Austrian Party must conduct the election campaign mainly on the questions of the fight against Fascism, the Christian-Socialist Government, against the Coalition Government, and for a Workers’ and Peasants’ Government. If the Party conducts its work well on this basis, if it fulfils its duties in the sphere of trade union activity and in agitation and propaganda, not only among the proletarian sections of the people, but also among the petty bourgeoisie and semi-proletarian masses, and above all among the agricultural proletariat, it will be in a position to obtain the votes not only of the conscious revolutionary class fighters, but also a part of the votes of the honest opponents of capitalism. It goes without saying that the Communist Party of Austria must expose the treacherous attitude towards the workers on the part of the Social-Democratic Party.
The Trade Union Question
The Trade Union tactics of the Communist Party of Austria, in the main express the decisions of the Fourth Congress of the Profintern. In this sphere of its tactics the Communist Party of Austria has already certain successes to record. Recently, however, the responsible bodies of the Party have permitted certain serious errors to be committed in the sphere of trade unionism. It appears from the reports submitted by Comrades Koritschoner and Frey that responsible trade union officials of the Communist Party of Austria, during negotiations over wages, are not always acted according to the principles formulated by the Red International of Labor Unions. In every wages campaign, the attitude of our officials must be well considered, well prepared, and above all, unitedly and compactly represented. The Party must combat the reformists, not only by its criticism but also by positive proposals. At every meeting of wages committees, factory councils conferences, etc., the representatives of the revolutionary bloc must always represent the principles of the Red International of Labor Unions. This must be done even at the risk of our comrades being expelled front these bodies by the reformists. Under no circumstances should communist officials strive to secure the right to participate in any campaign for wages negotiations at the price of sacrificing our principles.
At the conclusions of wages movements, which have ended unsuccessfully as a consequence of the tactics of the reformists, a thorough estimation of the movement must be made in the press and particularly in the factories giving a definite outline of our position.
The Youth Organisation
Without going into the details of the differences between the Communist Party of Austria and the Young Communist League of Austria, it must be generally stated here that the Party must bring about good relations with the Youth Organisation. The Party must strive always to maintain good relations with the Youth Organisation. On the basis of the decisions laid down by the CI (YCI), politically and tactically the Youth Organisation is subordinate to the Party. Nevertheless, in accordance with international decisions, the organisational independence of the Youth’s Organisation is not hereby limited. In the Youth’s Organisation, as well as in the Party, all factionalism must cease.
The Party Newspaper
It has been established that the editorial staff of the Rote Fahne has not always understood how to be politically realistic. We refer here to the assassination of Comrade Vorovsky, to the Unity Congress of the Second and 2½ International, and last but not least to the propaganda for the Labor Government. The editorial staff of Rote Fahne has given but little attention to these questions in every respect. The Party press must, more than hitherto, give prominence to news and facts and deal with the events of the day in their social connection and at the same time advocate the slogans of the Comintern.
Personal
The representatives of both factions undertake to put an end to all personal and factional conflicts and ruthlessly oppose any attempt to renew them.
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<h2>Neurath</h2>
<h1>Speech at Session of Enlarged Executive of C.I.</h1>
<h4>Fifth Day of Session<br>
Morning</h4>
<h3>(28 June 1923)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1923/v03n46-jun-28-1923-Inprecor-loc.pdf" target="new">Vol. 3 No. 46</a>, 28 June 1923, pp. 450–451.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">The Ruhr action is a question of more than local importance. It cannot be a matter of indifference for the Enlarged Executive what attitude the leading papers or the leaders of the German Communist Party take up towards it. The most important task was either to win over or neutralise the best part of the petty-bourgeois and proletarian sections of the population, and to carry on a policy which would enable the French proletariat to conduct a vigorous struggle against French imperialism.</p>
<p>What efforts were made to solve this task? The question was: should one deal with the situation by making use of nationalist prejudices, or by combating them ruthlessly?</p>
<p><strong>The International</strong>, the theoretical organ of the Communist Party of Germany, published an article entitled <em>Some Tactical Questions of the Ruhr War</em>. This article contained the following paragraph.</p>
<p class="quoteb">“Although the German bourgeoisie is in its inmost heart counter-revolutionary, it has been given the opportunity to appear outwardly as an objectively revolutionary factor, owing to the cowardice of the petty-bourgeois democracy (principally the social-democracy). It is outwardly (at least for the time being) revolutionary in spite of itself (as Bismarck was from 1864 to 1871). and for analagous historic reasons.”</p>
<p class="fst">As a matter of fact, in this struggle, the German bourgeoisie has not played anywhere an objectively revolutionary role. Its role has been counter-revolutionary.</p>
<p>The German Party has taken the right view of the situation. In its political resolution, the German Party Conference made, among other things, the following statement:</p>
<p class="quoteb">“The only way out of the terrible situation (which grows daily worse) in which the German working and middle classes find themselves at present, and the only way to avoid the dangers which are threatening the very existence of Germany, is the establishment of a militant united front of the working class against its own bourgeoisie. and working class leadership of the nation.”</p>
<p class="fst">This means that French imperialism can only be defeated by the German proletariat. If the latter will, in the first instance, carry on a relentless struggle against its own bourgeoisie. It Is only thus that the Party helps the French proletariat to defeat the French bourgeoisie. Comrade Thalheimer referred to Marx’ and Engels’ attitude to the Franco-German war. If a parallel is to be drawn at all, it must be this: just as Thiers arrived at an understanding with Bismarck concerning the slaughter of the revolutionary French proletariat, so has Lutterbeck (on behalf of the German bourgeoisie) arrived at an understanding with the French general concerning the slaughter of the German revolutionary proletariat.</p>
<p>In his reply, Thalheimer wrote, among other things, as follows:</p>
<p class="quoteb">“It must he one of two things: either the German working class must look upon its present defensive struggle against French Imperialism as a revolutionary aim, or, if it does not do that, then in the latter case this struggle should not be carried on at all. I am of the opinion that the struggle of the proletariat against Imperialism in general cannot but be a revolutionary aim. But the question is: what is the best way for the German working class to conduct this struggle. I reiterate, the best way for the German working class to conduct the struggle against French imperialism is to realise that it must first of all overthrow the German bourgeoisie or carry on a relentless struggle against it, in order to establish a united fighting front with the French proletariat.”</p>
<p class="fst">Previous to that. In Nr. 5 of the <strong>International</strong>, Thalheimer said: “The defeat of French imperialism in the world war was not a Communist aim, but its defeat in the Ruhr is a Communist aim.”</p>
<p>I confess that I do not understand this theoretical principle. I put the question: was the struggle against French Imperialism in 1914–18 a Communist, and thus, a revolutionary socialist aim or not? If in 1914 the struggle against French imperialism was not a communist aim, the Entente social patriots were perhaps right in their assertion that the struggle against the Hohenzollern dynasty was revolutionary.</p>
<p>From the beginning of the war, the struggle against French Imperialism, and every kind of Imperialism, was naturally a Communist and a revolutionary aim. The proletariat of every State is under the obligation to fight against its own bourgeoisie, thus creating the prerequisite for the overthrow of international reaction.</p>
<p>Such, then, was the situation between 1914 and 1918. and such it is today. Comrade Thalheimer pointed out that great changes have taken place since 1914. But what are these changes? Thalheimer wanted to know what German imperialism was, and where was its strength. But in his criticism he overlooked a small matter, viz. that during and towards the end of the war the forces of the German bourgeoisie were shattered, that its militarism is practically non-existent. and can therefore not be considered as a force, as was the case in 1914 and later. The German bourgeoisie being today the weakest, it is occupying at present the weakest position In the world’s structure of capitalism. Overthrow of the German bourgeoisie, establishment of a Workers’ and Peasants’ Government, alliance with the Soviet Government and after the victory of the working class – if it cannot be avoided – a repetition of Brest-Litovsk, some compromise with French imperialism, such is the way not only to carry on a successful struggle, but. by such direct methods, to bring large masses of petty-bourgeois proletarian sections of society over to Communism. This will not happen, if we attempt to compete with the German nationalists, but only If we maintain in this critical situation the strictest internationalism.</p>
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MIA > Archive > Neurath
Neurath
Speech at Session of Enlarged Executive of C.I.
Fifth Day of Session
Morning
(28 June 1923)
From International Press Correspondence, Vol. 3 No. 46, 28 June 1923, pp. 450–451.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
The Ruhr action is a question of more than local importance. It cannot be a matter of indifference for the Enlarged Executive what attitude the leading papers or the leaders of the German Communist Party take up towards it. The most important task was either to win over or neutralise the best part of the petty-bourgeois and proletarian sections of the population, and to carry on a policy which would enable the French proletariat to conduct a vigorous struggle against French imperialism.
What efforts were made to solve this task? The question was: should one deal with the situation by making use of nationalist prejudices, or by combating them ruthlessly?
The International, the theoretical organ of the Communist Party of Germany, published an article entitled Some Tactical Questions of the Ruhr War. This article contained the following paragraph.
“Although the German bourgeoisie is in its inmost heart counter-revolutionary, it has been given the opportunity to appear outwardly as an objectively revolutionary factor, owing to the cowardice of the petty-bourgeois democracy (principally the social-democracy). It is outwardly (at least for the time being) revolutionary in spite of itself (as Bismarck was from 1864 to 1871). and for analagous historic reasons.”
As a matter of fact, in this struggle, the German bourgeoisie has not played anywhere an objectively revolutionary role. Its role has been counter-revolutionary.
The German Party has taken the right view of the situation. In its political resolution, the German Party Conference made, among other things, the following statement:
“The only way out of the terrible situation (which grows daily worse) in which the German working and middle classes find themselves at present, and the only way to avoid the dangers which are threatening the very existence of Germany, is the establishment of a militant united front of the working class against its own bourgeoisie. and working class leadership of the nation.”
This means that French imperialism can only be defeated by the German proletariat. If the latter will, in the first instance, carry on a relentless struggle against its own bourgeoisie. It Is only thus that the Party helps the French proletariat to defeat the French bourgeoisie. Comrade Thalheimer referred to Marx’ and Engels’ attitude to the Franco-German war. If a parallel is to be drawn at all, it must be this: just as Thiers arrived at an understanding with Bismarck concerning the slaughter of the revolutionary French proletariat, so has Lutterbeck (on behalf of the German bourgeoisie) arrived at an understanding with the French general concerning the slaughter of the German revolutionary proletariat.
In his reply, Thalheimer wrote, among other things, as follows:
“It must he one of two things: either the German working class must look upon its present defensive struggle against French Imperialism as a revolutionary aim, or, if it does not do that, then in the latter case this struggle should not be carried on at all. I am of the opinion that the struggle of the proletariat against Imperialism in general cannot but be a revolutionary aim. But the question is: what is the best way for the German working class to conduct this struggle. I reiterate, the best way for the German working class to conduct the struggle against French imperialism is to realise that it must first of all overthrow the German bourgeoisie or carry on a relentless struggle against it, in order to establish a united fighting front with the French proletariat.”
Previous to that. In Nr. 5 of the International, Thalheimer said: “The defeat of French imperialism in the world war was not a Communist aim, but its defeat in the Ruhr is a Communist aim.”
I confess that I do not understand this theoretical principle. I put the question: was the struggle against French Imperialism in 1914–18 a Communist, and thus, a revolutionary socialist aim or not? If in 1914 the struggle against French imperialism was not a communist aim, the Entente social patriots were perhaps right in their assertion that the struggle against the Hohenzollern dynasty was revolutionary.
From the beginning of the war, the struggle against French Imperialism, and every kind of Imperialism, was naturally a Communist and a revolutionary aim. The proletariat of every State is under the obligation to fight against its own bourgeoisie, thus creating the prerequisite for the overthrow of international reaction.
Such, then, was the situation between 1914 and 1918. and such it is today. Comrade Thalheimer pointed out that great changes have taken place since 1914. But what are these changes? Thalheimer wanted to know what German imperialism was, and where was its strength. But in his criticism he overlooked a small matter, viz. that during and towards the end of the war the forces of the German bourgeoisie were shattered, that its militarism is practically non-existent. and can therefore not be considered as a force, as was the case in 1914 and later. The German bourgeoisie being today the weakest, it is occupying at present the weakest position In the world’s structure of capitalism. Overthrow of the German bourgeoisie, establishment of a Workers’ and Peasants’ Government, alliance with the Soviet Government and after the victory of the working class – if it cannot be avoided – a repetition of Brest-Litovsk, some compromise with French imperialism, such is the way not only to carry on a successful struggle, but. by such direct methods, to bring large masses of petty-bourgeois proletarian sections of society over to Communism. This will not happen, if we attempt to compete with the German nationalists, but only If we maintain in this critical situation the strictest internationalism.
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<h2>Alois Neurath</h2>
<h4>In the International</h4>
<h1>The United Front and the Communist Party of Czecho-Slovakia</h1>
<h3>(17 March 1922)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1922/v02n021-mar-17-1922-inprecor.pdf" target="new">Vol. 2 No. 21</a>, 17 March 1922, pp. 157–158.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">In 1920 the Czech class-conscious workers parted from their social patriotic leaders, in March 1921 the German proletarians followed, and during the end of November of the same year the German and Czech class-conscious proletarians united into the Communist Party of Czecho-Slovakia. The C.P.C. is now able to organize the revolutionary struggle of the working class without being exposed to the sabotage of the opportunists and social patriotic leaders. Every worker who is only superficially acquainted with the political struggle of the last six years understands very well that the split of the old social-imperialistic political parties forms the most primitive prerequisite for the revolutionary class struggle.</p>
<p>When we issued the slogan of the proletarian united front the trade-union and socialist papers represented the situation as if the Communists were merely interested in forming new watchwords, in order by this method to win the proletariat for its political actions. But our delegates not let an occasion slip by without showing the workers that all of their so-called social and political gains are in danger, that the capitalists are attacking the eight-hour day, and that they are preparing a general cut in wages. Last year at the time that the conflict in the metal industry began, we told the workers that the capitalists would not yield if they saw that they only had to do with the metal workers. If it were not possible to get several other large trade-unions to show solidarity in practice, then the arrogance of not only the capitalists in the metal industry, but of all the rest of the exploiters could not be kept in bounds. The Right Socialist trade-union leaders and the Social Democrats made fun of our slogans; <em>but at the end of the struggle the workers were forced to understand that we had been right</em>. Then came the struggle of the financial magnates against the bank employees. The Communists told the proletariat that without doubt the bank employees would also be defeated if larger groups of manual workers did not come to their aid. Again the trade-union leaders tried to discredit our attitude. The workers, however, saw two things: first, that their trade-union leaders and their Right Socialist parliamentarians carried on negotiations with the government and formulated a few phrases about solidarity with the struggling bank employees, and second, that the struggle, however, ended just as the Communists had predicted. Before Christmas 1921, the decisive group of capitalists, the <em>mine barons</em>, began the attack. The Communists said: “This struggle is decisive. If the mine owners win, then the advance of the entire bourgeoisie of Czecho-Slovakia cannot be stopped, and your defeat is inevitable.” The slander of the Right Socialists was in vain. In large meetings the workers expressed their attitude, demanded the extension of the struggle and for the present the general strike of the miners. The capitalists hesitated They postponed the struggle. In the meantimes war was declared against the state employees and they were defeated. They, too, had been left without any support.</p>
<p>And now began (the beginning of February) the great struggle in the mining industry. The problem was now to show in what way the extension of the struggle and the defensive front could be prepared and achieved in practice. As soon as the united front is mentioned, the Socialists of the Right try to shift the basis of discussion. They do not speak of the struggle and its organization but of the bureaucratic prerequisites for a proletarian united front and of the preparation and organization of a “proletarian congress” and the like. The mistrust of the workers (and in this case not alone of the Communist workers) is immediately aroused when they hear of new bureaucratic institutions, the workers ask: “The capitalists want to diminish our income, that is, lower our standard of living, increase our misery. What can we do against them?” The demand for a proletarian congress is rejected. Our party and our delegates pointed to the last struggles and said to the miners:</p>
<p class="quoteb">“The entire bourgeoisie and the government with all the powers of the state are standing behind the mine owners. If you are defeated, then a decrease in wages will follow in all the other branches. You will be defeated, if you, as miners, are forced to remain alone in the struggle. You can only repulse the attack of the capitalists if your front is broadened to include the workers of other vital trades and industries, especially the workers of the transit and transport industries. It is therefore your business to force your leaders to prepare the struggle and so prevent a definite defeat.”</p>
<p class="fst">We went to the Right Socialist trade-union organizations and all the Socialist parties and told them essentially what we had explained to the workers. In order to deprive the demagogues of the Right beforehand of all excuses we declared from the beginning that we did not put up a single political demand. We do not speak of the struggle for political power, nor of the Third International, we merely are speaking of those things that are for the proletariat at present the most decisive, namely, of the aim of the bourgeoisie to restore the productive apparatus of the capitalist economic system at the cost of the workers and of how we can prevent this aim. The Social Democrats in the Trade Union Executive and the Socialist parties became extremely embarrassed. The Czech trade-union leaders and the Right Socialists, by far smarter and sharper than the German separatists, answered our letters after the struggle was nearing its end or ended. The German separatists did not give any at all, all the more did they rage in their political newspapers and their trade-union journals.</p>
<p>The workers understood us?</p>
<p>Completely. They above all understood – and that was the most important – that we are really serious, that we really want to build up a united front. They seen and they will feel it still more clearly now, that everything that we said about the struggle, about its course, about its end, is entirely correct and above all they recognize very dearly that this shameful end could been prevented, if the trade-union leaders had respected our proposals.</p>
<p>A conference of the secretaries and delegates of the miners, which took place in Prague, accepted the agreement which had been made by the coal barons and the trade-union leaders. We already reported here about this agreement, and shown how cleverly the defeat had been covered up. However, when the delegates came home, they were received with great indignation, especially in Mährisch-Ostrau, the most important coal district of Czecho-Slovakia. In a vote taken at the pits, 90% of the workers voted against the agreement. Only gradually as the results of the agreement begin to make themselves shown, as for instance, is the case in the Falkenau district, do the workers recognize the extent of the defeat.</p>
<p>During the last months the wage earners without regard to their political affiliations seen that the C.P. has honestly tried to bring about all the necessary prerequisites for the trade-union leaders and the Right Socialists to prevent our endeavors. Before the outbreak of the next struggle the workers will want to decide in time if and how the front of the wage earners shall be extended. Whether or not it will suit the trade-union leaders, they will to, willingly or unwillingly, sit down together with us and seriously talk about the organization of the struggle. The workers will also see to it that such only trade-union leaders will be sent to the conferences as they can trust, in this way, <em>that</em> united proletarian front will gradually develop which will not alone be able to repulse the attack of the capitalists but itself begin an attack. A few dozen or a few hundred bureaucrats cannot build up a united front at proletarian conferences and congresses; this united front will not be able to be anything else than the fruit of long drawn-out struggles and bitter experiences.</p>
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MIA > Archive > Neurath
Alois Neurath
In the International
The United Front and the Communist Party of Czecho-Slovakia
(17 March 1922)
From International Press Correspondence, Vol. 2 No. 21, 17 March 1922, pp. 157–158.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
In 1920 the Czech class-conscious workers parted from their social patriotic leaders, in March 1921 the German proletarians followed, and during the end of November of the same year the German and Czech class-conscious proletarians united into the Communist Party of Czecho-Slovakia. The C.P.C. is now able to organize the revolutionary struggle of the working class without being exposed to the sabotage of the opportunists and social patriotic leaders. Every worker who is only superficially acquainted with the political struggle of the last six years understands very well that the split of the old social-imperialistic political parties forms the most primitive prerequisite for the revolutionary class struggle.
When we issued the slogan of the proletarian united front the trade-union and socialist papers represented the situation as if the Communists were merely interested in forming new watchwords, in order by this method to win the proletariat for its political actions. But our delegates not let an occasion slip by without showing the workers that all of their so-called social and political gains are in danger, that the capitalists are attacking the eight-hour day, and that they are preparing a general cut in wages. Last year at the time that the conflict in the metal industry began, we told the workers that the capitalists would not yield if they saw that they only had to do with the metal workers. If it were not possible to get several other large trade-unions to show solidarity in practice, then the arrogance of not only the capitalists in the metal industry, but of all the rest of the exploiters could not be kept in bounds. The Right Socialist trade-union leaders and the Social Democrats made fun of our slogans; but at the end of the struggle the workers were forced to understand that we had been right. Then came the struggle of the financial magnates against the bank employees. The Communists told the proletariat that without doubt the bank employees would also be defeated if larger groups of manual workers did not come to their aid. Again the trade-union leaders tried to discredit our attitude. The workers, however, saw two things: first, that their trade-union leaders and their Right Socialist parliamentarians carried on negotiations with the government and formulated a few phrases about solidarity with the struggling bank employees, and second, that the struggle, however, ended just as the Communists had predicted. Before Christmas 1921, the decisive group of capitalists, the mine barons, began the attack. The Communists said: “This struggle is decisive. If the mine owners win, then the advance of the entire bourgeoisie of Czecho-Slovakia cannot be stopped, and your defeat is inevitable.” The slander of the Right Socialists was in vain. In large meetings the workers expressed their attitude, demanded the extension of the struggle and for the present the general strike of the miners. The capitalists hesitated They postponed the struggle. In the meantimes war was declared against the state employees and they were defeated. They, too, had been left without any support.
And now began (the beginning of February) the great struggle in the mining industry. The problem was now to show in what way the extension of the struggle and the defensive front could be prepared and achieved in practice. As soon as the united front is mentioned, the Socialists of the Right try to shift the basis of discussion. They do not speak of the struggle and its organization but of the bureaucratic prerequisites for a proletarian united front and of the preparation and organization of a “proletarian congress” and the like. The mistrust of the workers (and in this case not alone of the Communist workers) is immediately aroused when they hear of new bureaucratic institutions, the workers ask: “The capitalists want to diminish our income, that is, lower our standard of living, increase our misery. What can we do against them?” The demand for a proletarian congress is rejected. Our party and our delegates pointed to the last struggles and said to the miners:
“The entire bourgeoisie and the government with all the powers of the state are standing behind the mine owners. If you are defeated, then a decrease in wages will follow in all the other branches. You will be defeated, if you, as miners, are forced to remain alone in the struggle. You can only repulse the attack of the capitalists if your front is broadened to include the workers of other vital trades and industries, especially the workers of the transit and transport industries. It is therefore your business to force your leaders to prepare the struggle and so prevent a definite defeat.”
We went to the Right Socialist trade-union organizations and all the Socialist parties and told them essentially what we had explained to the workers. In order to deprive the demagogues of the Right beforehand of all excuses we declared from the beginning that we did not put up a single political demand. We do not speak of the struggle for political power, nor of the Third International, we merely are speaking of those things that are for the proletariat at present the most decisive, namely, of the aim of the bourgeoisie to restore the productive apparatus of the capitalist economic system at the cost of the workers and of how we can prevent this aim. The Social Democrats in the Trade Union Executive and the Socialist parties became extremely embarrassed. The Czech trade-union leaders and the Right Socialists, by far smarter and sharper than the German separatists, answered our letters after the struggle was nearing its end or ended. The German separatists did not give any at all, all the more did they rage in their political newspapers and their trade-union journals.
The workers understood us?
Completely. They above all understood – and that was the most important – that we are really serious, that we really want to build up a united front. They seen and they will feel it still more clearly now, that everything that we said about the struggle, about its course, about its end, is entirely correct and above all they recognize very dearly that this shameful end could been prevented, if the trade-union leaders had respected our proposals.
A conference of the secretaries and delegates of the miners, which took place in Prague, accepted the agreement which had been made by the coal barons and the trade-union leaders. We already reported here about this agreement, and shown how cleverly the defeat had been covered up. However, when the delegates came home, they were received with great indignation, especially in Mährisch-Ostrau, the most important coal district of Czecho-Slovakia. In a vote taken at the pits, 90% of the workers voted against the agreement. Only gradually as the results of the agreement begin to make themselves shown, as for instance, is the case in the Falkenau district, do the workers recognize the extent of the defeat.
During the last months the wage earners without regard to their political affiliations seen that the C.P. has honestly tried to bring about all the necessary prerequisites for the trade-union leaders and the Right Socialists to prevent our endeavors. Before the outbreak of the next struggle the workers will want to decide in time if and how the front of the wage earners shall be extended. Whether or not it will suit the trade-union leaders, they will to, willingly or unwillingly, sit down together with us and seriously talk about the organization of the struggle. The workers will also see to it that such only trade-union leaders will be sent to the conferences as they can trust, in this way, that united proletarian front will gradually develop which will not alone be able to repulse the attack of the capitalists but itself begin an attack. A few dozen or a few hundred bureaucrats cannot build up a united front at proletarian conferences and congresses; this united front will not be able to be anything else than the fruit of long drawn-out struggles and bitter experiences.
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<h4><em>New International</em>, January–February 1953</h4>
<p> </p>
<h2>Alois Neurath</h2>
<h1>An Open Letter to Zapotocky</h1>
<h4>From a Founder of the Communist Movement</h4>
<h3>(January 1953)</h3>
<p> </p>
<p class="from">From <em>New International</em>, <a href="../../issue3.htm#ni53_01" target="new">Vol. XIII No. 1</a>, January–February 1953, pp. 52–55.<br>
Marked up up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for <em>ETOL</em>.</p>
<p> </p>
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<p class="fst"><small><em>The author is highly qualified from every standpoint to address this open letter to the Czech Stalinist leader, Zapotocky. Alois Neurath is one of the most prominent of the founders and builders of the international communist movement in the days when it was a communist movement. In 1921, after the founding of the Communist Party of the Czechoslovakian Republic (in the German-speaking sector), Comrade Neurath became its General Secretary. After the union of the Communist Party of the German section and the party of the Czechoslovakian section, Neurath became director, together with Dr. Hauser, of the Central Secretariat of the united organization. In the subsequent internal party conflicts, they were replaced by Jilek, first, and then by Zapotocky, as General Secretary. From 1922 to 1926, Neurath was a member of the Executive Committee of the Communist International; from November 1922 to June 1923, he was a member of the Moscow Secretariat of the Executive Committee of the Communist International, along with the Bulgarian Kolarov, the Finn Kuusinen and the Russian Pyatnitsky. In 1926, Neurath came out in opposition to the policy of the Comintern and Czech party leadership and after a protracted struggle, left the party in 1929. He became a supporter of the Trotskyist movement, without, actually joining the international organization, although he was in constant touch with Leon Trotsky by mail. He succeeded in escaping the Hitlerite terror and has been residing for years in Sweden. – Ed.</em></small></p>
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<h4>*</h4>
<p class="fst">Mr. Antonin Zapotocky<br>
Minister-President<br>
Prague, CZR</p>
<p>Only a few days ago I received the issues of <strong>Rude Pravo</strong> containing all the materials relating to the trial as well as the testimony and “confessions” of the accused. The materials, especially the “confessions” of the accused, show that it was not so much Slansky but Frejka (Freund) and Geminder who were guilty of the economic bankruptcy of Czechoslovakia. Geminder as well as Frejka confessed that they had been seduced by me, the “Trotskyite” thirty years ago, having been put on the wrong track, so to speak, that far back. In this respect Geminder had even more to say, namely, that Slansky had confided to him that he (Slansky) was in agreement with his political opinions. And Frejka provoked reproaches from the prosecution because of the tremendous losses his economic measures had caused the state; “confessed” that it was I who had given him such a responsible position in the party apparatus. This part of the “confessions” of both accused corresponds to the truth as much as everything else to which the victims of the trials have “confessed.” I had practically nothing to do with Geminder and I helped Frejka in 1923 or ’24 to get a job as city editor with the Reichenberger <strong>Vorwaerts</strong>.</p>
<p>The fact that your former colleagues and friends have been compelled to mention my name in the course of the trial a few times would not be a reason to address this open letter to you. For Frejka and Geminder testified only to that to which they had been forced to testify. It cannot be a question of polemizing against the testimony of the trial victims, but to expose your responsibility for this shameful trial.</p>
<p>Though neither Slansky, Geminder nor Frejka are my concern, nevertheless it is you, though you are not alone, who is responsible for the arrest, conviction and execution of a number of the “Karliner gang.” It was the party leadership which together with the functionaries of the NKVD drew up the list of those party functionaries who were to stand before the Peoples’ Court as “saboteurs,” “spies,” “murderers” and above all as “Zionists.”</p>
<p>In this connection, therefore, it is in order to illuminate your political past and your specific political acts. It was not so much Slansky, Frejka and Geminder, but Gottwald and a few others of the above group which you denounced at the time as the “Karliner gang” whom I sought to influence during the years 1923–25. One of the important tasks of this “Karliner gang” consisted among other things in trying to forestall those excesses which you, together with Nosek, Smeral, and others organized. (Attacks on the editorial offices of <strong>Rude Pravo</strong> and individual members of the Central Committee, who did not belong to your group.) Stalin himself at the time termed these excesses “banditry,” and he called you, who had been responsible for them, “bandits.” It is far from certain that Stalin has revised his opinion of you even today.</p>
<p>In 1925, the “troika” (Zinoviev, Kamenev and Stalin) decided on a thorough cleaning out of the Central Committee of the Czech Communist Party. The “troika” categorically demanded not only Smeral’s, Nosek’s and your removal from the CC, but your exclusion from the party altogether. The majority of the CC did not abide by this demand of the “troika.” Some of those belonging to the “Karliner gang” group, whom you have sent to the gallows, at that time opposed the decision of the “troika.” You have them to thank for the fact that you were not thrown out of the party as a “counter-revolutionary” or “bourgeois agent.” (At that time the Central Committees of the Communist Parties were not yet full of “spies,” “murderers,” “police agents,” and “Zionists.” That became the fashion only after Stalin had attained power.)</p>
<p>It would be pointless to enumerate all your political mistakes or those of other Stalinists, since Stalin determines the “general line” not only of the Soviet union, but of the Comintern as well; and therefore, it is the Kremlin that decides in the first instance who is a “spy” or “Zionist,” and who shall be hanged. Furthermore, it is the Kremlin that supplies the background of the various witchcraft trials. Moscow has now decided to begin an international anti-Semitic campaign. Were this not so, it would not be Slansky, Frejka, Geminder, etc., who would be facing the Peoples Court but possibly Gottwald, Zapotocky and Co.</p>
<p>One of the accused admitted, among other things, that he had been sympathetic to the Marshall Plan. What comedy! It was, after all, your “friend” and only opponent in the Central Committee, Gottwald, who was ready to welcome the Marshall Plan in the name of the Prague regime. Not Slansky, but Gottwald, as is well-known, was ordered to come to Moscow to receive a dressing-down because of his attitude on the Marshall Plan.</p>
<p>Today the only task of the Central Committee of the CPC consists of facilitating the activities of the NKVD insofar as the matter concerns dooming this or that group of party functionaries to the gallows. The fact that this time Moscow has initiated an anti-Semitic action has given you the opportunity of getting rid of some of your antagonists for ever, since among them were a few Jews. The question was not one of who might be a “spy” but one of who was a Jew among the leading cadres of the party. And then the “chosen ones” were compelled to confess that they not only had acted as “spies” but in the first place as “Zionists.”</p>
<p>What shame! No party, no human being, and above all no person actively engaged in politics can sink to a lower level than anti-Semitism!</p>
<p>No one knows better than you that none of those convicted in the Prague Witchcraft Trial were spies, that none of them committed the crimes to which they “confessed.” All the accused are victims of a bestial judicial murder. You know, of course, that the Prague Trials were in no way intended to influence public opinion in the CSR favorably. Only a very small part of the Czech population takes the materials of the trial seriously or believes in the “confessions” of the accused. If the trial in Czechoslovakia has any favorable result, it consists in strengthening “Titoism.” But it was not after all the purpose of the trial to create a friendly attitude on the part of the population, the trial represented the beginning of the international anti- Semitic campaign that meets the momentary needs of the Kremlin.</p>
<p>I repeat here the dialogue between the prosecutor and Geminder as it was published in <strong>Rude Pravo</strong>:</p>
<p class="quoteb"><em>Geminder:</em> I attended German schools in Ostrau. In 1910 I left the country and finished my high school studies in Berlin. After finishing these studies, I began to run around with provincial, petty-bourgeois cosmopolitan and Zionist circles where only German was spoken. That is the reason I don’t talk good Czechoslovakian.</p>
<p class="quoteb"><em>Prosecutor:</em> What language do you speak well?</p>
<p class="quoteb"><em>Geminder:</em> German.</p>
<p class="quoteb"><em>Prosecutor:</em> Do you really speak a good German?</p>
<p class="quoteb"><em>Geminder:</em> It’s been a long time since I spoke German, but I know it.</p>
<p class="quoteb"><em>Prosecutor:</em> Do you know German about as well as you know Czech.</p>
<p class="quoteb"><em>Geminder:</em> Yes.</p>
<p class="quoteb"><em>Prosecutor:</em> Then you really can’t speak any language decently. A typical cosmopolitan.</p>
<p class="fst">All the trial proceedings are conducted on this low level. And the level on which the whole trial occurs corresponds completely to the purpose of the trial itself: propaganda for anti-Semitism.</p>
<p>It is not so long ago that Slansky forced you to engage in “self-criticism.” You publicly confessed in 1945 that you were the author of the slanderous name “the Karliner gang,” and that it has turned out that they (in the first place Slansky) had always been right and you wrong.</p>
<p>Moscow’s international general anti- Semitic offensive has completely changed the situation inside the Central Committee of the CPC. Moscow demands Jews as scapegoats. And you have taken advantage of this favorable opportunity to denounce not only Frejka, Geminder and others, but above all Slansky, as “Zionists.”</p>
<p>Apart from the pleasure you derived from handing your strongest opponent over to the NKVD, you really had no other choice. Nor is there any way out’ You cannot escape your own fate. After Zinoviev, Kamenev and the others, those became the victims who had borne witness against them: Bukharin, Radek, etc. And after that came the turn of those who had testified against Bukharin, Radek, etc. Yesterday it was Slansky and company. Tomorrow it will be Gottwald, Zapotocky and company. Such things have their own logic.</p>
<table width="100%" cellpadding="3" cellspacing="3">
<tbody><tr>
<td width="60%">
<p> <br>
<em>Stockholm, January 1953</em></p>
</td>
<td>
<p><em>Alois Neurath</em><br>
</p>
</td>
</tr>
</tbody></table>
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Encyclopedia of Trotskyism | Marxists’ Internet Archive
New International, January–February 1953
Alois Neurath
An Open Letter to Zapotocky
From a Founder of the Communist Movement
(January 1953)
From New International, Vol. XIII No. 1, January–February 1953, pp. 52–55.
Marked up up by Einde O’Callaghan for ETOL.
The author is highly qualified from every standpoint to address this open letter to the Czech Stalinist leader, Zapotocky. Alois Neurath is one of the most prominent of the founders and builders of the international communist movement in the days when it was a communist movement. In 1921, after the founding of the Communist Party of the Czechoslovakian Republic (in the German-speaking sector), Comrade Neurath became its General Secretary. After the union of the Communist Party of the German section and the party of the Czechoslovakian section, Neurath became director, together with Dr. Hauser, of the Central Secretariat of the united organization. In the subsequent internal party conflicts, they were replaced by Jilek, first, and then by Zapotocky, as General Secretary. From 1922 to 1926, Neurath was a member of the Executive Committee of the Communist International; from November 1922 to June 1923, he was a member of the Moscow Secretariat of the Executive Committee of the Communist International, along with the Bulgarian Kolarov, the Finn Kuusinen and the Russian Pyatnitsky. In 1926, Neurath came out in opposition to the policy of the Comintern and Czech party leadership and after a protracted struggle, left the party in 1929. He became a supporter of the Trotskyist movement, without, actually joining the international organization, although he was in constant touch with Leon Trotsky by mail. He succeeded in escaping the Hitlerite terror and has been residing for years in Sweden. – Ed.
*
Mr. Antonin Zapotocky
Minister-President
Prague, CZR
Only a few days ago I received the issues of Rude Pravo containing all the materials relating to the trial as well as the testimony and “confessions” of the accused. The materials, especially the “confessions” of the accused, show that it was not so much Slansky but Frejka (Freund) and Geminder who were guilty of the economic bankruptcy of Czechoslovakia. Geminder as well as Frejka confessed that they had been seduced by me, the “Trotskyite” thirty years ago, having been put on the wrong track, so to speak, that far back. In this respect Geminder had even more to say, namely, that Slansky had confided to him that he (Slansky) was in agreement with his political opinions. And Frejka provoked reproaches from the prosecution because of the tremendous losses his economic measures had caused the state; “confessed” that it was I who had given him such a responsible position in the party apparatus. This part of the “confessions” of both accused corresponds to the truth as much as everything else to which the victims of the trials have “confessed.” I had practically nothing to do with Geminder and I helped Frejka in 1923 or ’24 to get a job as city editor with the Reichenberger Vorwaerts.
The fact that your former colleagues and friends have been compelled to mention my name in the course of the trial a few times would not be a reason to address this open letter to you. For Frejka and Geminder testified only to that to which they had been forced to testify. It cannot be a question of polemizing against the testimony of the trial victims, but to expose your responsibility for this shameful trial.
Though neither Slansky, Geminder nor Frejka are my concern, nevertheless it is you, though you are not alone, who is responsible for the arrest, conviction and execution of a number of the “Karliner gang.” It was the party leadership which together with the functionaries of the NKVD drew up the list of those party functionaries who were to stand before the Peoples’ Court as “saboteurs,” “spies,” “murderers” and above all as “Zionists.”
In this connection, therefore, it is in order to illuminate your political past and your specific political acts. It was not so much Slansky, Frejka and Geminder, but Gottwald and a few others of the above group which you denounced at the time as the “Karliner gang” whom I sought to influence during the years 1923–25. One of the important tasks of this “Karliner gang” consisted among other things in trying to forestall those excesses which you, together with Nosek, Smeral, and others organized. (Attacks on the editorial offices of Rude Pravo and individual members of the Central Committee, who did not belong to your group.) Stalin himself at the time termed these excesses “banditry,” and he called you, who had been responsible for them, “bandits.” It is far from certain that Stalin has revised his opinion of you even today.
In 1925, the “troika” (Zinoviev, Kamenev and Stalin) decided on a thorough cleaning out of the Central Committee of the Czech Communist Party. The “troika” categorically demanded not only Smeral’s, Nosek’s and your removal from the CC, but your exclusion from the party altogether. The majority of the CC did not abide by this demand of the “troika.” Some of those belonging to the “Karliner gang” group, whom you have sent to the gallows, at that time opposed the decision of the “troika.” You have them to thank for the fact that you were not thrown out of the party as a “counter-revolutionary” or “bourgeois agent.” (At that time the Central Committees of the Communist Parties were not yet full of “spies,” “murderers,” “police agents,” and “Zionists.” That became the fashion only after Stalin had attained power.)
It would be pointless to enumerate all your political mistakes or those of other Stalinists, since Stalin determines the “general line” not only of the Soviet union, but of the Comintern as well; and therefore, it is the Kremlin that decides in the first instance who is a “spy” or “Zionist,” and who shall be hanged. Furthermore, it is the Kremlin that supplies the background of the various witchcraft trials. Moscow has now decided to begin an international anti-Semitic campaign. Were this not so, it would not be Slansky, Frejka, Geminder, etc., who would be facing the Peoples Court but possibly Gottwald, Zapotocky and Co.
One of the accused admitted, among other things, that he had been sympathetic to the Marshall Plan. What comedy! It was, after all, your “friend” and only opponent in the Central Committee, Gottwald, who was ready to welcome the Marshall Plan in the name of the Prague regime. Not Slansky, but Gottwald, as is well-known, was ordered to come to Moscow to receive a dressing-down because of his attitude on the Marshall Plan.
Today the only task of the Central Committee of the CPC consists of facilitating the activities of the NKVD insofar as the matter concerns dooming this or that group of party functionaries to the gallows. The fact that this time Moscow has initiated an anti-Semitic action has given you the opportunity of getting rid of some of your antagonists for ever, since among them were a few Jews. The question was not one of who might be a “spy” but one of who was a Jew among the leading cadres of the party. And then the “chosen ones” were compelled to confess that they not only had acted as “spies” but in the first place as “Zionists.”
What shame! No party, no human being, and above all no person actively engaged in politics can sink to a lower level than anti-Semitism!
No one knows better than you that none of those convicted in the Prague Witchcraft Trial were spies, that none of them committed the crimes to which they “confessed.” All the accused are victims of a bestial judicial murder. You know, of course, that the Prague Trials were in no way intended to influence public opinion in the CSR favorably. Only a very small part of the Czech population takes the materials of the trial seriously or believes in the “confessions” of the accused. If the trial in Czechoslovakia has any favorable result, it consists in strengthening “Titoism.” But it was not after all the purpose of the trial to create a friendly attitude on the part of the population, the trial represented the beginning of the international anti- Semitic campaign that meets the momentary needs of the Kremlin.
I repeat here the dialogue between the prosecutor and Geminder as it was published in Rude Pravo:
Geminder: I attended German schools in Ostrau. In 1910 I left the country and finished my high school studies in Berlin. After finishing these studies, I began to run around with provincial, petty-bourgeois cosmopolitan and Zionist circles where only German was spoken. That is the reason I don’t talk good Czechoslovakian.
Prosecutor: What language do you speak well?
Geminder: German.
Prosecutor: Do you really speak a good German?
Geminder: It’s been a long time since I spoke German, but I know it.
Prosecutor: Do you know German about as well as you know Czech.
Geminder: Yes.
Prosecutor: Then you really can’t speak any language decently. A typical cosmopolitan.
All the trial proceedings are conducted on this low level. And the level on which the whole trial occurs corresponds completely to the purpose of the trial itself: propaganda for anti-Semitism.
It is not so long ago that Slansky forced you to engage in “self-criticism.” You publicly confessed in 1945 that you were the author of the slanderous name “the Karliner gang,” and that it has turned out that they (in the first place Slansky) had always been right and you wrong.
Moscow’s international general anti- Semitic offensive has completely changed the situation inside the Central Committee of the CPC. Moscow demands Jews as scapegoats. And you have taken advantage of this favorable opportunity to denounce not only Frejka, Geminder and others, but above all Slansky, as “Zionists.”
Apart from the pleasure you derived from handing your strongest opponent over to the NKVD, you really had no other choice. Nor is there any way out’ You cannot escape your own fate. After Zinoviev, Kamenev and the others, those became the victims who had borne witness against them: Bukharin, Radek, etc. And after that came the turn of those who had testified against Bukharin, Radek, etc. Yesterday it was Slansky and company. Tomorrow it will be Gottwald, Zapotocky and company. Such things have their own logic.
Stockholm, January 1953
Alois Neurath
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<h2>Alois Neurath</h2>
<h4>The Labor Movement</h4>
<h1>The National Trade Union Congress of Czecho-Slovakia</h1>
<h3>(10 February 1922)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1922/v02n011-feb-10-1922-inprecor.pdf" target="new">Vol. II No. 11</a>, 10 February 1922, p. 78.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">The National Trade Union Congress of Czecho-Slovakia met in Prague from Sunday, January 22nd, to Thursday, January 26th 1922. Before its opening, articles on the significance of this Congress had been published by the Communist press both at home and abroad expressing the hope that the majority of the trade-union representatives would vote in favor of the Red Trade Union International. The prospects were very favourable indeed. Several unions had some time ago elected Communist leaders. The following unions were already permeated with Communist spirit before the Congress: rural and forest workers, chemical workers, workers of the building trade and lumbermen These organisations comprise 344,000 members.</p>
<p>According to the figures of the Prague Trade Union Commission 832,000 workers are organised in Czech unions. The Moravian Trade Union Conference took place at Brunn, September 28th, the overwhelming majority of which voted in favor of the Red Trade Union International. At this conference 207,000 workers were represented. In October a Trade Union Conference at Bosenberg, representing 143.000 organised workers, demanded secession from the Amsterdam International. It was the task of the Communist Party, i.e., the National Communist Trade Union Committee, to do their best in enlightening the workers and influencing the election of the delegates to the National Trade Union Congress. Have these bodies thoroughly fulfilled their task? This question must be answered in the negative. It is true that our Party was unable to begin preparations in time as it was only founded on October 31st, 1921. After its formation, however, the Communist Party could have done more than has been done in making the organized proletariat of all unions recognise the immense importance of the National Trade Union Congress. Only some days before the beginning of the Congress the Party Executive examined the preparations of the Communist Trade Union Committee. For a considerable time the Agricultural Workers’ Union had paid no dues to the National Trade Union Commission. The Party Executive and the Communist Trade Union Committee side with the view of the Red Trade Union International that unity of the trade union movement must be kept intact. They reject the opinion that unions with a Communist majority should leave the National Trade Union Fereration. For this very reason the Communist Trade Union Committee advised the Agricultural Workers’ Union to pay their dues to the National Trade Union Commission, thus preserving their right of representation at the National Congress. The same advice was given by the Executive of the Communist Party. The Congress being over now, it is not only our right but our duty to say that the Agricultural Workers’ Union has not considered this advice. They did not pay their dues and thus lost their right of sending a delegation to the National Congress. This was a fundamental problem. The decision of the Red Trade Union International to do everything possible to maintain the unity of the trade-union movement must be followed by Communist trade-union representatives. This principle has been violated by the leaders of the Agricultural Workers’ Union, who in spite of all decisions did not pay their dues, thus placing themselves outside the National Trade Union Congress, and considerably weakening the Communist representation in this Congress.</p>
<p>According to the report of the Credentials Committee the following 602 delegates attended the Congress: 37 editors of trade organs, 126 delegates of Divisional and Local Trade Union Councils and 439 delegates of union branches. Before the Congress the Social Democrats who control the entire union apparatus spoke and wrote very little but worked all the more actively. With all the tricks of experienced politicians the Amsterdam trade-union bureaucrats were “preparing” the elections. The conferences in Moravia, Silesia, Slovakia and the unions which already before the Congress were under Communist leadership are ample proof of the fact that the majority of the workers in Czecho-Slovakia supported the campaign against the Amsterdam International. In the first session of the Congress the strength of both fractions was tested in a trial vote. The motion being of small importance, however, the result was not quite clear 316 delegates voted in favour of Tayerle, secretary of the Trade Union Commission, and 270 against him. Two days later however, when the new rules of the Trade Union Federation were decided upon, Tayerle received 343 votes, while 226 delegates voted against him. The day before the Congress was closed the following proposal of the building trades workers was voted upon by soll-call:</p>
<p class="quoteb">“Dealing with the problem of international affiliation the Seventh National Trade Union Congress approves of the withdrawal of the Czecho-Slovakian Trade Union Federation from the Amsterdam Trade Union International and its affiliation to the Moscow Trade Union International.”</p>
<p class="fst">Representatives of 222,027 workers voted in favor of this proposal and of 338,477 against it, i.e., the Congress decided with a majority of 116,405 to remain affiliated to the Amsterdam International.</p>
<p>From their point of view the Amsterdam trade-union officials excellently prepared for the Congress. They succeeded in bringing their influence to bear upon the delegates of the Congress. Tayerle welcomed the guests, thereby casually mentioning that a representative of the Third International was present. Mertens, representative of the Amsterdam International and Jouhaux, delegate of the French Amsterdam Labor Federation were given the floor to greet the Congress. The representative of the Third International, however, was not allowed to speak. Yet the letter of Comrade Lozovsky to the Congress could not well be suppressed. As for the rest, the Amsterdam supporters in the Czecho-Slovakian Trade Union Federation are shrewd wirepullers. The talk very much about the unity of the movement and the neutrality of the trade unions. They say that so-called political differences should not be allowed to influence economic organisations of the workers.</p>
<p>It would be a great mistake, however, to consider the machinations and tactical tricks of the Amsterdam bureaucrats the only reason for the result of the Congress. The tricks of the Amsterdamers and the mistakes of the Communist Party and the Communist trade unions could influence the Congress but to a certain extent. What is more, we must not overlook or deny the fact that large numbers of workers who do not agree with the Amsterdam officials, are not yet sufficiently informed on the principles of the Red Trade Union International. With the support of the Communist Party the Communist Trade Union Committee must carry on more intensive agitation and propaganda activities among the organized workers than has been the case heretofore. We will have favorable opportunities for this work. If the Communist Trade Union Committee and the Communist trade-union representatives fulfil their duty in the large economic struggles, the Amsterdam bureaucrats will in spite of their intrigues be left hanging in the air.</p>
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MIA > Archive > Neurath
Alois Neurath
The Labor Movement
The National Trade Union Congress of Czecho-Slovakia
(10 February 1922)
From International Press Correspondence, Vol. II No. 11, 10 February 1922, p. 78.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
The National Trade Union Congress of Czecho-Slovakia met in Prague from Sunday, January 22nd, to Thursday, January 26th 1922. Before its opening, articles on the significance of this Congress had been published by the Communist press both at home and abroad expressing the hope that the majority of the trade-union representatives would vote in favor of the Red Trade Union International. The prospects were very favourable indeed. Several unions had some time ago elected Communist leaders. The following unions were already permeated with Communist spirit before the Congress: rural and forest workers, chemical workers, workers of the building trade and lumbermen These organisations comprise 344,000 members.
According to the figures of the Prague Trade Union Commission 832,000 workers are organised in Czech unions. The Moravian Trade Union Conference took place at Brunn, September 28th, the overwhelming majority of which voted in favor of the Red Trade Union International. At this conference 207,000 workers were represented. In October a Trade Union Conference at Bosenberg, representing 143.000 organised workers, demanded secession from the Amsterdam International. It was the task of the Communist Party, i.e., the National Communist Trade Union Committee, to do their best in enlightening the workers and influencing the election of the delegates to the National Trade Union Congress. Have these bodies thoroughly fulfilled their task? This question must be answered in the negative. It is true that our Party was unable to begin preparations in time as it was only founded on October 31st, 1921. After its formation, however, the Communist Party could have done more than has been done in making the organized proletariat of all unions recognise the immense importance of the National Trade Union Congress. Only some days before the beginning of the Congress the Party Executive examined the preparations of the Communist Trade Union Committee. For a considerable time the Agricultural Workers’ Union had paid no dues to the National Trade Union Commission. The Party Executive and the Communist Trade Union Committee side with the view of the Red Trade Union International that unity of the trade union movement must be kept intact. They reject the opinion that unions with a Communist majority should leave the National Trade Union Fereration. For this very reason the Communist Trade Union Committee advised the Agricultural Workers’ Union to pay their dues to the National Trade Union Commission, thus preserving their right of representation at the National Congress. The same advice was given by the Executive of the Communist Party. The Congress being over now, it is not only our right but our duty to say that the Agricultural Workers’ Union has not considered this advice. They did not pay their dues and thus lost their right of sending a delegation to the National Congress. This was a fundamental problem. The decision of the Red Trade Union International to do everything possible to maintain the unity of the trade-union movement must be followed by Communist trade-union representatives. This principle has been violated by the leaders of the Agricultural Workers’ Union, who in spite of all decisions did not pay their dues, thus placing themselves outside the National Trade Union Congress, and considerably weakening the Communist representation in this Congress.
According to the report of the Credentials Committee the following 602 delegates attended the Congress: 37 editors of trade organs, 126 delegates of Divisional and Local Trade Union Councils and 439 delegates of union branches. Before the Congress the Social Democrats who control the entire union apparatus spoke and wrote very little but worked all the more actively. With all the tricks of experienced politicians the Amsterdam trade-union bureaucrats were “preparing” the elections. The conferences in Moravia, Silesia, Slovakia and the unions which already before the Congress were under Communist leadership are ample proof of the fact that the majority of the workers in Czecho-Slovakia supported the campaign against the Amsterdam International. In the first session of the Congress the strength of both fractions was tested in a trial vote. The motion being of small importance, however, the result was not quite clear 316 delegates voted in favour of Tayerle, secretary of the Trade Union Commission, and 270 against him. Two days later however, when the new rules of the Trade Union Federation were decided upon, Tayerle received 343 votes, while 226 delegates voted against him. The day before the Congress was closed the following proposal of the building trades workers was voted upon by soll-call:
“Dealing with the problem of international affiliation the Seventh National Trade Union Congress approves of the withdrawal of the Czecho-Slovakian Trade Union Federation from the Amsterdam Trade Union International and its affiliation to the Moscow Trade Union International.”
Representatives of 222,027 workers voted in favor of this proposal and of 338,477 against it, i.e., the Congress decided with a majority of 116,405 to remain affiliated to the Amsterdam International.
From their point of view the Amsterdam trade-union officials excellently prepared for the Congress. They succeeded in bringing their influence to bear upon the delegates of the Congress. Tayerle welcomed the guests, thereby casually mentioning that a representative of the Third International was present. Mertens, representative of the Amsterdam International and Jouhaux, delegate of the French Amsterdam Labor Federation were given the floor to greet the Congress. The representative of the Third International, however, was not allowed to speak. Yet the letter of Comrade Lozovsky to the Congress could not well be suppressed. As for the rest, the Amsterdam supporters in the Czecho-Slovakian Trade Union Federation are shrewd wirepullers. The talk very much about the unity of the movement and the neutrality of the trade unions. They say that so-called political differences should not be allowed to influence economic organisations of the workers.
It would be a great mistake, however, to consider the machinations and tactical tricks of the Amsterdam bureaucrats the only reason for the result of the Congress. The tricks of the Amsterdamers and the mistakes of the Communist Party and the Communist trade unions could influence the Congress but to a certain extent. What is more, we must not overlook or deny the fact that large numbers of workers who do not agree with the Amsterdam officials, are not yet sufficiently informed on the principles of the Red Trade Union International. With the support of the Communist Party the Communist Trade Union Committee must carry on more intensive agitation and propaganda activities among the organized workers than has been the case heretofore. We will have favorable opportunities for this work. If the Communist Trade Union Committee and the Communist trade-union representatives fulfil their duty in the large economic struggles, the Amsterdam bureaucrats will in spite of their intrigues be left hanging in the air.
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./articles/Husserl-Edmund/https:..www.marxists.org.archive.vygotsky.works.crisis.index | <body>
<h2>Lev Vygotsky</h2>
<h3>The Historical Meaning of the Crisis in Psychology: A Methodological Investigation</h3>
<hr class="end">
<p class="information">
<span class="info">Written:</span> 1927;<br>
<span class="info">Source:</span> The Collected Works of Vygotsky;<br>
<span class="info">Publisher:</span> <a href="http://www.wkap.nl/">Plenum Press</a>, 1987;<br>
<span class="info">Translated:</span> translated Rene Van Der Veer;<br>
<span class="info">Transcribed:</span> <a href="../../../../admin/volunteers/biographies/ablunden.htm">Andy Blunden</a>;<br>
<span class="info">HTML Markup: </span> Andy Blunden.</p>
<hr class="end">
<h4>Table of Contents</h4>
<p class="index">
Chapter 1 – <a href="psycri01.htm#p100">The Nature of the Crisis</a><br>
Chapter 2 – <a href="psycri01.htm#p200">Our Approach</a><br>
Chapter 3– <a href="psycri01.htm#p300">The Development of Sciences</a><br>
Chapter 4 – <a href="psycri01.htm#p400">Current Trends in Psychology</a><br>
Chapter 5 – <a href="psycri05.htm">From Generalisation to Explanation</a><br>
Chapter 6 – <a href="psycri06.htm">The Objective Tendencies in development of a Science</a><br>
Chapter 7 – <a href="psycri07.htm">The Unconscious. The Fusing of disparate theories</a><br>
Chapter 8 – <a href="psycri08.htm">The Biogenetic hypothesis. Borrowings from the natural sciences</a><br>
Chapter 9 – <a href="psycri9.htm">On Scientific Language</a><br>
Chapter 10 – <a href="psycri10.htm">Interpretations of the Crisis in Psychology and its Meaning</a><br>
Chapter 11 – <a href="psycri11.htm">Bankruptcy of the idea of creating an empirical psychology</a><br>
Chapter 12 – <a href="psycri12.htm">The Driving Forces of the Crisis</a><br>
Chapter 13– <a href="psycri13.htm">Two Psychologies</a><br>
Chapter 14 – <a href="psycri14.htm">Conclusion</a></p>
<hr class="end">
<p class="quote">
“<i><b>When one mixes up the epistemological problem with the ontological one</b></i> by introducing into psychology not the whole argumentation but its final results, this leads to the distortion of <i><b>both</b></i>. In Russia the subjective is identified with the mental and later it is proved that the mental cannot be objective. Epistemological consciousness as part of the antinomy “subject-object” is confused with empirical, psychological consciousness and then it is asserted that consciousness cannot be material, that to assume this would be Machism. And as a result one ends up with neoplatonism, in the sense of infallible essences for which being and phenomenon coincide. They flee from idealism only to plunge into it headlong.” <a href="psycri13.htm#p1367">Two Psychologies</a></p>
<hr class="end">
<p class="toc">Glossary References:</p>
<p class="index">
<a href="../../../../glossary/people/b/r.htm#brentano-franz">Brentano</a> |
<a href="../../../../glossary/people/w/u.htm#wundt-wilhelm">Wundt</a> |
<a href="../../../../glossary/people/d/i.htm#dilthey-wilhelm">Dilthey</a> |
<a href="../../../../glossary/people/p/a.htm#pavlov-ivan">Pavlov</a> |
<a href="../../../../glossary/people/f/r.htm#freud-sigmund">Freud</a> |
<a href="../../../../glossary/people/a/d.htm#adler-alfred">Adler</a> |
<a href="../../../../glossary/people/k/o.htm#koffka-kurt">Koffka</a> |
<a href="../../../../glossary/people/j/u.htm#jung-carl">Jung</a>
</p>
<p class="toc">Further reading:</p>
<p class="index">
<a href="../../../../reference/subject/philosophy/works/ru/pavlov.htm">The Work of the Cerebral Hemispheres</a>, Pavlov 1924<br>
<a href="../../../../reference/subject/philosophy/works/us/skinner.htm">The Origins of Cognitive Thought</a>, B F Skinner 1989<br>
<a href="../../../../reference/subject/philosophy/works/fr/piaget.htm">Genetic Epistemology</a>, Jean Piaget 1968<br>
<a href="../../../../reference/subject/philosophy/works/us/kuhn.htm">The Structure of Scientific Revolutions</a>, Thomas Kuhn, 1962<br>
</p>
<hr class="end">
<p class="quote">
“History is a science about the past, reconstructed by its traces, and not a science about the traces of the past.” [<a href="psycri08.htm">Chapter 8</a>]</p>
<hr class="end">
<p class="footer">
<a href="../../index.htm" target="_top">Vygotsky Internet Archive</a>
</p>
</body> |
Lev Vygotsky
The Historical Meaning of the Crisis in Psychology: A Methodological Investigation
Written: 1927;
Source: The Collected Works of Vygotsky;
Publisher: Plenum Press, 1987;
Translated: translated Rene Van Der Veer;
Transcribed: Andy Blunden;
HTML Markup: Andy Blunden.
Table of Contents
Chapter 1 – The Nature of the Crisis
Chapter 2 – Our Approach
Chapter 3– The Development of Sciences
Chapter 4 – Current Trends in Psychology
Chapter 5 – From Generalisation to Explanation
Chapter 6 – The Objective Tendencies in development of a Science
Chapter 7 – The Unconscious. The Fusing of disparate theories
Chapter 8 – The Biogenetic hypothesis. Borrowings from the natural sciences
Chapter 9 – On Scientific Language
Chapter 10 – Interpretations of the Crisis in Psychology and its Meaning
Chapter 11 – Bankruptcy of the idea of creating an empirical psychology
Chapter 12 – The Driving Forces of the Crisis
Chapter 13– Two Psychologies
Chapter 14 – Conclusion
“When one mixes up the epistemological problem with the ontological one by introducing into psychology not the whole argumentation but its final results, this leads to the distortion of both. In Russia the subjective is identified with the mental and later it is proved that the mental cannot be objective. Epistemological consciousness as part of the antinomy “subject-object” is confused with empirical, psychological consciousness and then it is asserted that consciousness cannot be material, that to assume this would be Machism. And as a result one ends up with neoplatonism, in the sense of infallible essences for which being and phenomenon coincide. They flee from idealism only to plunge into it headlong.” Two Psychologies
Glossary References:
Brentano |
Wundt |
Dilthey |
Pavlov |
Freud |
Adler |
Koffka |
Jung
Further reading:
The Work of the Cerebral Hemispheres, Pavlov 1924
The Origins of Cognitive Thought, B F Skinner 1989
Genetic Epistemology, Jean Piaget 1968
The Structure of Scientific Revolutions, Thomas Kuhn, 1962
“History is a science about the past, reconstructed by its traces, and not a science about the traces of the past.” [Chapter 8]
Vygotsky Internet Archive
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<p class="title">Martin Heidegger (1927)</p>
<p><img src="../../../../../glossary/people/h/pics/heidegge.jpg" align="RIGHT" hspace="10" vspace="2" alt="nasty-looking, pudgy man"></p>
<h1>The Basic Problems of Phenomenology</h1>
<h3>Introduction</h3>
<hr class="end">
<p class="information">
<span class="info">Source</span>: <em>The Basic Problems of Phenomenology</em> (1954) Published by Indiana University Press, 1975. Introduction, p 1 - 23 reproduced here.</p>
<hr class="end">
<h3>§ 1. Exposition and general division of the theme</h3>
<p class="fst">
This course sets for itself the task of posing the basic <em>problems
of phenomenology</em>, elaborating them, and proceeding to some
extent toward their solution. Phenomenology must develop its concept
out of what it takes as its theme and how it investigates its
object. Our considerations are aimed at the <em>inherent content</em>
and<em> inner systematic relationships</em> of the basic problems.
The goal is to achieve a fundamental illumination of these problems.</p>
<p>
In negative terms this means that our purpose is not to acquire
historical knowledge about the circumstances of the modern movement
in philosophy called phenomenology. We shall be dealing not with
phenomenology but with what phenomenology itself deals with. And,
again, we do not wish merely to take note of it so as to be able
to report then that phenomenology deals with this or that subject;
instead, the course deals with the subject itself, and you yourself
are supposed to deal with it, or learn how to do so, as the course
proceeds. The point is not to gain some knowledge about philosophy
but to be able to philosophise. An introduction to the basic problems
could lead to that end.</p>
<p>
And these basic problems themselves? Are we to take it on trust
that the ones we discuss do in fact constitute the inventory of
the basic problems? How shall we arrive at these basic problems?
Not directly but by the roundabout way of <em>a discussion of certain
individual problems</em>. From these we shall sift out the basic
problems and determine their systematic interconnection. Such
an understanding of the basic problems should yield insight into
the degree to which philosophy as a science is necessarily demanded
by them.</p>
<p>
The course accordingly divides into <em>three parts</em>. At the
outset we may outline them roughly as follows:
</p><ol class="numbered">
<li>Concrete phenomenological inquiry leading to the basic problems</li>
<li>The basic problems of phenomenology in their systematic order
and foundation</li>
<li>The scientific way of treating these problems and the idea
of phenomenology</li>
</ol>
<p>
The <em>path</em> of our reflections will take us from certain individual
problems to the basic problems. The question therefore arises,
How are we to gain the starting point of our considerations? How
shall we select and circumscribe the individual problems? Is this
to be left to chance and arbitrary choice? In order to avoid the
appearance that we have simply assembled a few problems at random,
an introduction leading up to the individual problems is required.</p>
<p>
It might be thought that the simplest and surest way would be
to derive the concrete individual phenomenological problems from
the concept of phenomenology. Phenomenology is essentially such
and such; hence it encompasses such and such problems. But we
have first of all to arrive at the concept of phenomenology. This
route is accordingly closed to us. But to circumscribe the concrete
problems we do not ultimately need a clear-cut and fully validated
concept of phenomenology. Instead it might be enough to have some
acquaintance with what is nowadays familiarly known by the name
"phenomenology." Admittedly, within phenomenological
inquiry there are again differing definitions of its nature and
tasks. But, even if these differences in defining the nature of
phenomenology could be brought to a consensus, it would remain
doubtful whether the concept of phenomenology thus attained, a
sort of average concept, could direct us toward the concrete problems
to be chosen. For we should have to be certain beforehand that
phenomenological inquiry today has reached the center of philosophy's
problems and has defined its own nature by way of their possibilities.
As we shall see, however, this is not the case - and so little
is it the case that one of the main purposes of this course is
to show that conceived in its basic tendency, phenomenological
research can represent nothing less than the more explicit and
more radical understanding of the idea of a scientific philosophy
which philosophers from ancient times to Hegel sought to realize
time and again in a variety of internally coherent endeavours.</p>
<p>
Hitherto, phenomenology has been understood, even within that
discipline itself, as a science propaedeutic to philosophy, preparing
the ground for the proper philosophical disciplines of logic,
ethics, aesthetics, and philosophy of religion. But in this definition
of phenomenology as a preparatory science the traditional stock
of philosophical disciplines is taken over without asking whether
that same stock is not called in question and eliminated precisely
by phenomenology itself. Does not phenomenology contain within
itself the possibility of reversing the alienation of philosophy
into these disciplines and of revitalising and reappropriating
in its basic tendencies the great tradition of philosophy with
its essential answers? We shall maintain that phenomenology is
not just one philosophical science among others, nor is it the
science preparatory to the rest of them; rather, <em>the expression
"phenomenology"</em> is the name for the <em>method of
scientific philosophy in general</em>.</p>
<p>
Clarification of the idea of phenomenology is equivalent to exposition
of the concept of scientific philosophy. To be sure, this does
not yet tell us what phenomenology means as far as its content
is concerned, and it tells us even less about how this method
is to be put into practice. But it does indicate how and why we
must avoid aligning ourselves with any contemporary tendency in
phenomenology.</p>
<p>
We shall not deduce the concrete phenomenological problems from
some dogmatically proposed concept of phenomenology; on the contrary,
we shall allow ourselves to be led to them by a more general and
preparatory discussion of the concept of scientific philosophy
in general. We shall conduct this discussion in tacit apposition
to the basic tendencies of Western philosophy from antiquity to
Hegel.</p>
<p>
In the early period of ancient thought philosophia means the same
as science in general. Later, individual philosophies, that is
to say, individual sciences - medicine, for instance, and mathematics
- become detached from philosophy. The term philosophia then refers
to a science which underlies and encompasses all the other particular
sciences. Philosophy becomes science pure and simple. More and
more it takes itself to be the first and highest science or, as
it was called during the period of German idealism, absolute science.
If philosophy is absolute science, then the expression "scientific
philosophy" contains a pleonasm. It then means scientific
absolute science. It suffices simply to say "philosophy."
This already implies science pure and simple. Why then do we still
add the adjective "scientific" to the expression "philosophy"?
A science, not to speak of absolute science, is scientific by
the very meaning of the term. We speak of "scientific philosophy"
principally because conceptions of philosophy prevail which not
only imperil but even negate its character as science pure and
simple. These conceptions of philosophy are not just contemporary
but accompany the development of scientific philosophy throughout
the time philosophy has existed as a science. On this view philosophy
is supposed not only, and not in the first place, to be a theoretical
science, but to give practical guidance to our view of things
and their interconnection and our attitudes toward them, and to
regulate and direct our interpretation of existence and its meaning.
Philosophy is wisdom of the world and of life, or, to use an expression
current nowadays, philosophy is supposed to provide a <em>Weltanschauung</em>,
a world-view. Scientific philosophy can thus be set off against
philosophy as world-view.</p>
<p>
We shall try to examine this distinction more critically and to
decide whether it is valid or whether it has to be absorbed into
one of its members. In this way the concept of philosophy should
become clear to us and put us in a position to justify the selection
of the individual problems to be dealt with in the first part.
It should be borne in mind here that these discussions concerning
the concept of philosophy can be only provisional - provisional
not just in regard to the course as a whole but provisional in
general. For the concept of philosophy is the most proper and
highest result of philosophy itself. Similarly, the question whether
philosophy is at all possible or not can be decided only by philosophy
itself.</p>
<h3>§ 2. The concept of philosophy<br>
Philosophy and world-view</h3>
<p>
In discussing the difference between scientific philosophy and
philosophy as world-view, we may fittingly start from the latter
notion and begin with the term "<em>Weltanschauung</em>,"
"world-view." This expression is not a translation from
Greek, say, or Latin. There is no such expression as <em>kosmotheoria</em>.
The word "<em>Weltanschauung</em>" is of specifically
German coinage; it was in fact coined within philosophy. It first
turns up in its natural meaning in Kant's <em>Critique of Judgment</em>
- world-intuition in the sense of contemplation of the world given
to the senses or, as Kant says, the <em>mundus sensibili</em>s -
a beholding of the world as simple apprehension of nature in the
broadest sense. Goethe and Alexander von Humboldt thereupon use
the word in this way. This usage dies out in the thirties of the
last century under the influence of a new meaning given to the
expression "<em>Weltanschauung</em>" by the Romantics
and principally by Schelling. In the Introduction to the draft
of a System of Philosophy of Nature, (1799), Schelling says: "Intelligence
is productive in a double manner, either blindly and unconsciously
or freely and consciously; it is unconsciously productive in <em>Weltanschauung</em>
and consciously productive in the creation of an ideal world."
Here <em>Weltanschauung</em> is directly assigned not to sense-observation
but to intelligence, albeit to unconscious intelligence. Moreover,
the factor of productivity, the independent formative process
of intuition, is emphasised. Thus the word approaches the meaning
we are familiar with today, a self-realised, productive as well
as conscious way of apprehending and interpreting the universe
of beings. Schelling speaks of a schematism of <em>Weltanschauung</em>,
a schematised form for the different possible world-views which
appear and take shape in fact. A view of the world, understood
in this way, does not have to be produced with a theoretical intention
and with the means of theoretical science. In his <em>Phenomenology
of Spirit</em>, Hegel speaks of a "moral world-view."
Görres makes use of the expression "poetic world-view."
Ranke speaks of the "religious and Christian world-view."
Mention is made sometimes of the democratic, sometimes of the
pessimistic world-view or even of the medieval world-view. Schleiermacher
says: "It is only our world-view that makes our knowledge
of God complete." Bismarck at one point writes to his bride:
"What strange views of the world there are among clever people!"
From the forms and possibilities of world-view thus enumerated
it becomes clear that what is meant by this term is not only a
conception of the contexture of natural things but at the same
time an interpretation of the sense and purpose of the human <em>Dasein</em>
[the being that we are ourselves] and hence of history. A world-view
always includes a view of life. A world-view grows out of an all-inclusive
reflection on the world and the human <em>Dasein</em>, and this
again happens in different ways, explicitly and consciously in
individuals or by appropriating an already prevalent world-view.
We grow up within such a world-view and gradually become accustomed
to it. Our world-view is determined by environment - people, race,
class, developmental stage of culture. Every world-view thus individually
formed arises out of a natural world-view, out of a range of conceptions
of the world and determinations of the human <em>Dasein</em> which
are at any particular time given more or less explicitly with
each such <em>Dasein</em>. We must distinguish the individually
formed world-view or the cultural world-view from the natural
world-view.</p>
<p>
A world-view is not a matter of theoretical knowledge, either
in respect of its origin or in relation to its use. It is not
simply retained in memory like a parcel of cognitive property.
Rather, it is a matter of a coherent conviction which determines
the current affairs of life more or less expressly and directly.
A world-view is related in its meaning to the particular contemporary
<em>Dasein</em> at any given time. In this relationship to the <em>Dasein</em>
the world-view is a guide to it and a source of strength under
pressure. Whether the world-view is determined by superstitions
and prejudices or is based purely on scientific knowledge and
experience or even, as is usually the case, is a mixture of superstition
and knowledge, prejudice and sober reason it all comes to the
same thing; nothing essential is changed.</p>
<p>
This indication of the characteristic traits of what we mean by
the term "world-view" may suffice here. A rigorous definition
of it would have to be gained in another way, as we shall see.
In his <em>Psychologie der Weltanschauungen</em>, Jaspers says that
"when we speak of world-views we mean Ideas, what is ultimate
and total in man, both subjectively, as life-experience and power
and character, and objectively, as a world having objective shape."
For our purpose of distinguishing between philosophy as world-view
and scientific philosophy, it is above all important to see that
the world-view, in its meaning, always arises out of the particular
factical existence of the human being in accordance with his factical
possibilities of thoughtful reflection and attitude-formation,
and it arises thus for this factical <em>Dasein</em>. The world-view
is something that in each case exists historically from, with,
and for the factical <em>Dasein</em>. A philosophical world-view
is one that expressly and explicitly or at any rate preponderantly
has to be worked out and brought about by philosophy, that is
to say, by theoretical speculation, to the exclusion of artistic
and religious interpretations of the world and the <em>Dasein</em>.
This world-view is not a by-product of philosophy; its cultivation,
rather, is the proper goal and nature of philosophy itself. In
its very concept philosophy is world-view philosophy, philosophy
as world-view. If philosophy in the form of theoretical knowledge
of the world aims at what is universal in the world and ultimate
for the <em>Dasein</em> - the whence, the whither, and the wherefore
of the world and life - then this differentiates it from the particular
sciences, which always consider only a particular region of the
world and the <em>Dasein</em>, as well as from the artistic and
religious attitudes, which are not based primarily on the theoretical
attitude. It seems to be without question that philosophy has
as its goal the formation of a world-view. This task must define
the nature and concept of philosophy. Philosophy, it appears,
is so essentially world-view philosophy that it would be preferable
to reject this latter expression as an unnecessary overstatement.
And what is even more, to propose to strive for a scientific philosophy
is a misunderstanding. For the philosophical world-view, it is
said, naturally ought to be scientific. By this is meant: first,
that it should take cognisance of the results of the different
sciences and use them in constructing the world-picture and the
interpretation of the <em>Dasein</em>; secondly, that it ought to
be scientific by forming the world-view in strict conformity with
the rules of scientific thought. This conception of philosophy
as the formation of a world-view in a theoretical way is so much
taken for granted that it commonly and widely defines the concept
of philosophy and consequently also prescribes for the popular
mind what is to be and what ought to be expected of philosophy.
Conversely, if philosophy does not give satisfactory answers to
the questions of world-view, the popular mind regards it as insignificant.
Demands made on philosophy and attitudes taken toward it are governed
by this notion of it as the scientific construction of a world-view.
To determine whether philosophy succeeds or fails in this task,
its history is examined for unequivocal confirmation that it deals
knowingly with the ultimate questions - of nature, of the soul,
that is to say, of the freedom and history of man, of God.</p>
<p>
If philosophy is the scientific construction of a world-view,
then the: distinction between "scientific philosophy"
and "philosophy as world-view" vanishes. The two together
constitute the essence of philosophy, so that what is really emphasised
ultimately is the task of the world-view. This seems also to be
the view of Kant, who put the scientific character of philosophy
on a new basis. We need only recall the distinction he drew in
the introduction to the Logic between the <em>academic</em> and
the <em>cosmic conceptions of philosophy</em>. Here we turn to an
oft-quoted Kantian distinction which apparently supports the distinction
between scientific philosophy and philosophy as world-view or,
more exactly, serves as evidence for the fact that Kant himself,
for whom the scientific character of philosophy was central, likewise
conceives of philosophy as philosophical world-view.</p>
<p>
According to the <em>academic concept</em> or, as Kant also says,
in the scholastic sense, philosophy is the doctrine of the skill
of reason and includes two parts: "first, a sufficient stock
of rational cognitions from concepts; and, secondly, a systematic
interconnection of these cognitions or a combination of them in
the idea of a whole." Kant is here thinking of the fact that
philosophy in the scholastic sense includes the interconnection
of the formal principles of thought and of reason in general as
well as the discussion and determination of those concepts which,
as a necessary presupposition, underlie our apprehension of the
world, that is to say, for Kant, of nature. According to the academic
concept, philosophy is the whole of all the formal and material
fundamental concepts and principles of rational knowledge.</p>
<p>
Kant defines the <em>cosmic concept</em> of philosophy or, as he
also says, philosophy in the cosmopolitan sense, as follows: "But
as regards philosophy in the cosmic sense (<em>in sensu cosmico</em>),
it can also be called a science of the supreme maxims of the use
of our reason, understanding by 'maxim' the inner principle of
choice among diverse ends." Philosophy in the cosmic sense
deals with that for the sake of which all use of reason, including
that of philosophy itself, is what it is. "For philosophy
in the latter sense is indeed the science of the relation of every
use of knowledge and reason to the final purpose of human reason,
under which, as the supreme end, all other ends are subordinated
and must come together into unity in it. In this cosmopolitan
sense the field of philosophy can be defined by the following
questions: 1) What can I know? 2) What should I do? 3) What may
I hope? 4) What is man?" At bottom, says Kant, the first
three questions are concentrated in the fourth, "What is
man?" For the determination of the final ends of human reason
results from the explanation of what man is. It is to these ends
that philosophy in the academic sense also must relate.</p>
<p>
Does this Kantian separation between philosophy in the scholastic
sense and philosophy in the cosmopolitan sense coincide with the
distinction between scientific philosophy and philosophy as world-view?
Yes and no. Yes, since Kant after all makes a distinction within
the concept of philosophy and, on the basis of this distinction,
makes the questions of the end and limits of human existence central.
No, since philosophy in the cosmic sense does not have the task
of developing a world-view in the designated sense. What Kant
ultimately has in mind as the task of philosophy in the cosmic
sense, without being able to say so explicitly, is nothing but
the <em>a priori</em> and therefore ontological circumscription
of the characteristics which belong to the essential nature of
the human <em>Dasein</em> and which also generally determine the
concept of a world-view. As the most fundamental <em>a priori</em>
determination of the essential nature of the human <em>Dasein</em>
Kant recognises the proposition: Man is a being which exists as
its own end. Philosophy in the cosmic sense, as Kant understands
it, also has to do with determinations of essential nature. It
does not seek a specific factual account of the merely factually
known world and the merely factually lived life; rather, it seeks
to delimit what belongs to world in general, to the <em>Dasein</em>
in general, and thus to world-view in general. Philosophy in the
cosmic sense has for Kant exactly the same methodological character
as philosophy in the academic sense, except that for reasons which
we shall not discuss here in further detail Kant does not see
the connection between the two. More precisely, he does not see
the basis for establishing both concepts on a common original
ground. We shall deal with this later on. For the present it is
clear only that, if philosophy is viewed as being the scientific
construction of a world-view, appeal should not be made to Kant.
Fundamentally, Kant recognises only philosophy as science.</p>
<p>
A world-view, as we saw, springs in every case from a factical
<em>Dasein</em> in accordance with its factical possibilities, and
it is what it is always for this particular <em>Dasein</em>. This
in no way asserts a relativism of world-views. What a world-view
fashioned in this way says can be formulated in propositions and
rules which are related in their meaning to a specific really
existing world, to the particular factically existing <em>Dasein</em>.
Every world-view and life-view posits; that is to say, it is related
being-ly to some being or beings. It posits a being, something
that is; it is positive. A world-view belongs to each <em>Dasein</em>
and, like this <em>Dasein</em>, it is always in fact determined
historically. To the world-view there belongs this multiple positivity
that it is always rooted in a <em>Dasein</em> which is in such and
such a way; that as such it relates to the existing world and
points to the factically existent <em>Dasein</em>. It is just because
this positivity - that is, the relatedness to beings, to world
that is, <em>Dasein</em> that is - belongs to the essence of the
world-view, and thus in general to the formation of the world-view,
that the formation of a world-view cannot be the task of philosophy.
To say this is not to exclude but to include the idea that philosophy
itself is a distinctive primal form of world-view. Philosophy
can and perhaps must show, among many other things, that something
like a world-view belongs to the essential nature of the <em>Dasein</em>.
Philosophy can and must define what in general constitutes the
structure of a world-view. But it can never develop and posit
some specific world-view qua just this or that particular one.
Philosophy is not essentially the formation of a world-view; but
perhaps just on this account it has an elementary and fundamental
relation to all world-view formation, even to that which is not
theoretical but factually historical.</p>
<p>
The thesis that world-view formation does not belong to the task
of philosophy is valid, of course, only on the presupposition
that philosophy does not relate in a positive manner to some being
qua this or that particular being, that it does not posit a being.
Can this presupposition that philosophy does not relate positively
to beings, as the sciences do, be justified? What then is philosophy
supposed to concern itself with if not with beings, with that
which is, as well as with the whole of what is? What is not, is
surely the nothing. Should philosophy, then, as absolute science,
have the nothing as its theme? What can there be apart from nature,
history, God, space, number? We say of each of these, even though
in a different sense, that it is. We call it a being. In relating
to it, whether theoretically or practically, we are comporting
ourselves toward a being. Beyond all these beings there is nothing.
Perhaps there is no other being beyond what has been enumerated,
but perhaps, as in the German idiom for "there is,"<em>
es gibt</em> [literally, it gives], still something else is given,
something else which indeed is not but which nevertheless, in
a sense yet to be determined, is given. Even more. In the end
something is given which must be given if we are to be able to
make beings accessible to us as beings and comport ourselves toward
them, something which, to be sure, is not but which must be given
if we are to experience and understand any beings at all. We are
able to grasp beings as such, as beings, only if we understand
something like being. If we did not understand, even though at
first roughly and without conceptual comprehension, what actuality
signifies, then the actual would remain hidden from us. If we
did not understand what reality means, then the real would remain
inaccessible. If we did not understand what life and vitality
signify, then we would not be able to comport ourselves toward
living beings. If we did not understand what existence and existentiality
signify, then we ourselves would not be able to exist as <em>Dasein</em>.
If we did not understand what permanence and constancy signify,
then constant geometric relations or numerical proportions would
remain a secret to us. We must understand actuality, reality,
vitality, existentiality, constancy in order to be able to comport
ourselves positively toward specifically actual, real, living,
existing, constant beings. We must understand being so that we
may be able to be given over to a world that is, so that we can
exist in it and be our own <em>Dasein</em> itself as a being. We
must be able to understand actuality before all factual experience
of actual beings. This understanding of actuality or of being
in the widest sense as over against the experience of beings is
in a certain sense earlier than the experience of beings. To say
that the understanding of being precedes all factual experience
of beings does not mean that we would first need to have an explicit
concept of being in order to experience beings theoretically or
practically. We must understand being - being, which may no longer
itself be called a being, being, which does not occur as a being
among other beings but which nevertheless must be given and in
fact is given in the understanding of being.</p>
<h3>§ 3. Philosophy as science of being</h3>
<p>
We assert now that <em>being is the proper and sole theme of philosophy</em>.
This is not our own invention; it is a way of putting the theme
which comes to life at the beginning of philosophy in antiquity,
and it assumes its most grandiose form in Hegel's logic. At present
we are merely asserting that being is the proper and sole theme
of philosophy. Negatively, this means that philosophy is not a
science of beings but of being or, as the Greek expression goes,
<em>ontology</em>. We take this expression in the widest possible
sense and not in the narrower one it has, say, in Scholasticism
or in modern philosophy in Descartes and Leibniz.</p>
<p>
A discussion of the basic problems of phenomenology then is tantamount
to providing fundamental substantiation for this assertion that
philosophy is the science of being and establishing how it is
such. The discussion should show the possibility and necessity
of the absolute science of being and demonstrate its character
in the very process of the inquiry. Philosophy is the theoretical
conceptual interpretation of being, of being's structure and its
possibilities. Philosophy is ontological. In contrast, a world-view
is a positing knowledge of beings and a positing attitude toward
beings; it is not ontological but ontical. The formation of a
world-view falls outside the range of philosophy's tasks, but
not because philosophy is in an incomplete condition and does
not yet suffice to give a unanimous and universally cogent answer
to the questions pertinent to world-views; rather, the formation
of a world-view falls outside the range of philosophy's tasks
because philosophy in principle does not relate to beings. It
is not because of a defect that philosophy renounces the task
of forming a world-view but because of a distinctive priority:
it deals with what every positing of beings, even the positing
done by a world-view, must already presuppose essentially. The
distinction between philosophy as science and philosophy as world-view
is untenable, not - as it seemed earlier - because scientific
philosophy has as its chief end the formation of a world-view
and thus would have to be elevated to the level of a world-view
philosophy, but because the notion of a world-view philosophy
is simply inconceivable. For it implies that philosophy, as science
of being, is supposed to adopt specific attitudes toward and posit
specific things about beings. To anyone who has even an approximate
understanding of the concept of philosophy and its history, the
notion of a world-view philosophy is an absurdity. If one term
of the distinction between scientific philosophy and world-view
philosophy is inconceivable, then the other, too, must be inappropriately
conceived. Once it has been seen that world-view philosophy is
impossible in principle if it is supposed to be philosophy, then
the differentiating adjective "scientific" is no longer
necessary for characterising philosophy. That philosophy is scientific
is implied in its very concept. It can be shown historically that
at bottom all the great philosophies since antiquity more or less
explicitly took themselves to be, and as such sought to be, ontology.
In a similar way, however, it can also be shown that these attempts
failed over and over again and why they had to fail. I gave the
historical proof of this in my courses of the last two semesters,
one on ancient philosophy and the other on the history of philosophy
from Thomas Aquinas to Kant. We shall not now refer to this historical
demonstration of the nature of philosophy, a demonstration having
its own peculiar character. Let us rather in the whole of the
present course try to establish philosophy on its own basis, so
far as it is a work of human freedom. Philosophy must legitimate
by its own resources its claim to be universal ontology.</p>
<p>
In the meantime, however, the statement that philosophy is the
science of being remains a pure assertion. Correspondingly, the
elimination of world-view formation from the range of philosophical
tasks has not yet been warranted. We raised this distinction between
scientific philosophy and world-view philosophy in order to give
a provisional clarification of the concept of philosophy and to
demarcate it from the popular concept. The clarification and demarcation,
again, were provided in order to account for the selection of
the concrete phenomenological problems to be dealt with next and
to remove from the choice the appearance of complete arbitrariness.</p>
<p>
Philosophy is the science of being. For the future we shall mean
by "philosophy" scientific philosophy and nothing else.
In conformity with this usage, all non-philosophical sciences
have as their theme some being or beings, and indeed in such a
way that they are in every case antecedently given as beings to
those sciences. They are posited by them in advance; they are
a <em>positum</em> for them. All the propositions of the non-philosophical
sciences, including those of mathematics, are positive propositions.
Hence, to distinguish them from philosophy, we shall call all
non-philosophical sciences positive sciences. Positive sciences
deal with that which is, with beings; that is to say, they always
deal with specific domains, for instance, nature. Within a given
domain scientific research again cuts out particular spheres:
nature as physically material lifeless nature and nature as living
nature. It divides the sphere of the living into individual fields:
the plant world, the animal world. Another domain of beings is
history; its spheres are art history, political history, history
of science, and history of religion. Still another domain of beings
is the pure space of geometry, which is abstracted from space
pre-theoretically uncovered in the environing world. The beings
of these domains are familiar to us even if at first and for the
most part we are not in a position to delimit them sharply and
clearly from one another. We can, of course, always name, as a
provisional description which satisfies practically the purpose
of positive science, some being that falls within the domain.
We can always bring before ourselves, as it were, a particular
being from a particular domain as an example. Historically, the
actual partitioning of domains comes about not according to some
preconceived plan of a system of science but in conformity with
the current research problems of the positive sciences.</p>
<p>
We can always easily bring forward and picture to ourselves some
being belonging to any given domain. As we are accustomed to say,
we are able to think something about it. What is the situation
here with philosophy's object? Can something like being be imagined?
If we try to do this, doesn't our head start to swim? Indeed,
at first we are baffled and find ourselves clutching at thin air
A being - that's something, a table, a chair, a tree, the sky,
a body, some words, an action. A being, yes, indeed - but being?
It looks like nothing - and no less a thinker than Hegel said
that being and nothing are the same. Is philosophy as science
of being the science of nothing? At the outset of our considerations,
without raising any false hopes and without mincing matters, we
must confess that under the heading of being we can at first think
to ourselves nothing. On the other hand, it is just as certain
that we are constantly thinking being. We think being just as
often as, daily, on innumerable occasions, whether aloud or silently,
we say "This <em>is</em> such and such," "That other
is <em>not</em> so," "That <em>was</em>," "It
<em>will</em> be." In each use of a verb we have already thought,
and have always in some way understood, being. We understand immediately
"Today is Saturday; the sun is up." We understand the
"is" we use in speaking, although we do not comprehend
it conceptually. The meaning of this "is" remains closed
to us. This understanding of the "is" and of being in
general is so much a matter of course that it was possible for
the dogma to spread in philosophy uncontested to the present day
that being is the simplest and most self-evident concept, that
it is neither susceptible of nor in need of definition. Appeal
is made to common sense. But wherever common sense is taken to
be philosophy's highest court of appeal, philosophy must become
suspicious. In <em>On the Essence of Philosophical Criticism</em>,
Hegel says: "Philosophy by its very nature is esoteric; for
itself it is neither made for the masses nor is it susceptible
of being cooked up for them. It is philosophy only because it
goes exactly contrary to the understanding and thus even more
so to 'sound common sense,' the so-called healthy human understanding,
which actually means the local and temporary vision of some limited
generation of human beings. To that generation the world of philosophy
is in and for itself a topsy-turvy, an inverted, world.
The demands and standards of common sense have no right to claim
any validity or to represent any authority in regard to what philosophy
is and what it is not.</p>
<p>
What if being were the most complex and most obscure concept?
What f arriving at the concept of being were the most urgent task
of philosophy, the task which has to be taken up ever anew? Today,
when philosophising is so barbarous, so much like a St. Vitus'
dance, as perhaps in no other period of the cultural history of
the West, and when nevertheless the resurrection of metaphysics
is hawked up and down all the streets, what Aristotle says on one
of his most important investigations in the <em>Metaphysics</em>
has been completely forgotten. "That which has been sought
for from of old and now and in the future and constantly, and
that on which inquiry founders over and over again, is the problem
What is being?" If philosophy is the science of being, then
the first and last and basic problem of philosophy must be, What
does being signify? Whence can something like being in general
be understood? How is understanding of being at all possible?</p>
<h3>§ 4. The four theses about being<br>
and the basic problems of phenomenology</h3>
<p>
Before we broach these fundamental questions, it will be worthwhile
first to make ourselves familiar for once with discussions about
being. To this end we shall deal in the first part of the course
with some characteristic theses about being as individual concrete
phenomenological problems, theses that have been advocated in
the course of the history of Western philosophy since antiquity.
In this connection we are interested, not in the historical contexts
of the philosophical inquiries within which these theses about
being make their appearance, but in their specifically inherent
content. This content is to be discussed critically, so that we
may make the transition from it to the above-mentioned basic problems
of the science of being. The discussion of these theses should
at the same time render us familiar with the phenomenological
way of dealing with problems relating to being. We choose four
such theses:</p>
<ol class="numbered">
<li>Kant's thesis: Being is not a real predicate.</li>
<li>The thesis of medieval ontology (Scholasticism) which goes
back to Aristotle: To the constitution of the being of a being
there belong (a) whatness, essence (<em>Was-sein</em>, <em>essentia</em>),
and (b) existence or extantness <em>(existentia, Vorhandensein</em>).</li>
<li>The thesis of modern ontology: The basic ways of being are
the being of nature (res extensa) and the being of mind (<em>res
cogitans</em>).</li>
<li>The thesis of logic in the broadest sense: Every being, regardless
of its particular way of being, can be addressed and talked about
by means of the "is." The being of the copula.</li>
</ol>
<p>
These theses seem at first to have been gathered together arbitrarily.
Looked at more closely, however, they are interconnected in a
most intimate way. Attention to what is denoted in these theses
leads to the insight that they cannot be brought up adequately
- not even as problems - as long as <em>the fundamental question</em>
of the whole science of being has not been put and answered: <em>the
question of the meaning of being in general</em>. The second part
of our course will deal with this question. Discussion of the
basic question of the meaning of being in general and of the problems
arising from that question constitutes the entire stock of basic
problems of phenomenology in their systematic order and their
foundation. For the present we delineate the range of these problems
only roughly.</p>
<p>
On what path can we advance toward the meaning of being in general?
Is not the question of the meaning of being and the task of an
elucidation of this concept a pseudo-problem if, as usual, the
opinion is held dogmatically that being is the most general and
simplest concept? What is the source for defining this concept
and in what direction is it to be resolved? </p>
<p>
Something like being reveals itself to us in the understanding
of being, an understanding that lies at the root of all comportment
toward beings. Comportment toward beings belongs, on its part,
to a definite being, the being which we ourselves are, the human
<em>Dasein</em>. It is to the human <em>Dasein</em> that there belongs
the understanding of being which first of all makes possible every
comportment toward beings. The understanding of being has itself
the mode of being of the human <em>Dasein</em>. The more originally
and appropriately we define this being in regard to the structure
of its being, that is to say, ontologically, the more securely
we are placed in a position to comprehend in its structure the
understanding of being that belongs to the <em>Dasein</em>, and
the more clearly and unequivocally the question can then be posed,
What is it that makes this understanding of being possible at
all? Whence - that is, from which antecedently given horizon -
do we understand the like of being?</p>
<p>
The analysis of the understanding of being in regard to what is
specific to this understanding and what is understood in it or
its intelligibility presupposes an analytic of the <em>Dasein</em>
ordered to that end. This analytic has the task of exhibiting
the basic constitution of the human <em>Dasein</em> and of characterising
the meaning of the <em>Dasein</em>'s being. In this ontological
analytic of the <em>Dasein</em>, the original constitution of the
<em>Dasein</em>'s being is revealed to be <em>temporality</em>. The
interpretation of temporality leads to a more radical understanding
and conceptual comprehension of time than has been possible hitherto
in philosophy. The familiar concept of time as traditionally treated
in philosophy is only an offshoot of temporality as the original
meaning of the <em>Dasein</em>. If temporality constitutes the meaning
of the being of the human <em>Dasein</em> and if understanding of
being belongs to the constitution of the <em>Dasein</em>'s being,
then this understanding of being, too, must be possible only on
the basis of temporality. Hence there arises the prospect of a
possible confirmation of the thesis that time is the horizon from
which something like being becomes at all intelligible. We interpret
being by way of time (<em>tempus</em>). The interpretation is a
Temporal one. The fundamental subject of research in ontology,
as determination of the meaning of being by way of time, is <em>Temporality</em>.</p>
<p>
We said that ontology is the science of being. But being is always
the being of a being. Being is essentially different from a being,
from beings. How is the distinction between being and beings to
be grasped? How can its possibility be explained? If being is
not itself a being, how then does it nevertheless belong to beings,
since, after all, beings and only beings are? What does it mean
to say that being belongs to beings? The correct answer to this
question is the basic presupposition needed to set about the problems
of ontology regarded as the science of being. We must be able
to bring out clearly the difference between being and beings in
order to make something like being the theme of inquiry. This
distinction is not arbitrary; rather, it is the one by which the
theme of ontology and thus of philosophy itself is first of all
attained. It is a distinction which is first and foremost constitutive
for ontology. We call it the <em>ontological difference</em> - the
differentiation between being and beings. Only by making this
distinction - <em>krinein</em> in Greek - not between one being
and another being but between being and beings do we first enter
the field of philosophical research. Only by taking this critical
stance do we keep our own standing inside the field of philosophy.
Therefore, in distinction from the sciences of the things that
are, of beings, ontology, or philosophy in general, is the critical
science, or the science of the inverted world, With this distinction
between being and beings and that selection of being as theme
we depart in principle from the domain of beings. We surmount
it, transcend it. We can also call the science of being, a critical
science, <em>transcendental science</em>. In doing so we are not
simply taking over unaltered the concept of the transcendental
in Kant, although we are indeed adopting its original sense and
its true tendency, perhaps still concealed from Kant. We are surmounting
beings in order to reach being. Once having made the ascent we
shall not again descend to a being, which, say, might lie like
another world behind the familiar beings. The transcendental science
of being has nothing to do with popular metaphysics, which deals
with some being behind the known beings; rather, the scientific
concept of metaphysics is identical with the concept of philosophy
in general - critically transcendental science of being, ontology.
It is easily seen that the ontological difference can be cleared
up and carried out unambiguously for ontological inquiry only
if and when the meaning of being in general has been explicitly
brought to light, that is to say, only when it has been shown
how temporality makes possible the distinguishability between
being and beings. Only on the basis of this consideration can
the Kantian thesis that being is not a real predicate be given
its original sense and adequately explained.</p>
<p>
Every being is <em>something</em>, it has its what and as such has
a specific possible <em>mode of being</em>. In the first part of
our course, while discussing the second thesis, we shall show
that ancient as well as medieval ontology dogmatically enunciated
this proposition - that to each being there belongs a what and
way of being, <em>essentia</em> and <em>existentia</em> - as if
it were self-evident. For us the question arises, Can the reason
every being must and can have a what, <em>a ti</em>, and a possible
way of being be grounded in the meaning of being itself, that
is to say, Temporally? Do these characteristics, whatness and
way of being, taken with sufficient breadth, belong to being itself?
"Is" being articulated by means of these characteristics
in accordance with its essential nature? With this we are now
confronted by <em>the problem of the basic articulation of bein</em>g,
the question of the necessary belonging-together of <em>whatness</em>
and <em>way-of-being</em> and of the <em>belonging of the two of
them in their unity to the idea of being in general</em>.</p>
<p>
Every being has a way-of-being. The question is whether this way-of-being
has the same character in every being - as ancient ontology believed
and subsequent periods have basically had to maintain even down
to the present - or whether individual ways-of-being are mutually
distinct. Which are the basic ways of being? Is there a multiplicity?
How is the variety of ways-of-being possible and how is it at
all intelligible, given the meaning of being? How can we speak
at all of a unitary concept of being despite the variety of ways-of-being?
These questions can be consolidated into <em>the problem of the
possible modifications of being and the unity of being's variety</em>.
</p><p>
Every being with which we have any dealings can be addressed and
spoken of by saying "it is" thus and so, regardless
of its specific mode of being. We meet with a being's being in
the understanding of being. It is understanding that first of
all opens up or, as we say, discloses or reveals something like
being. Being is given only in the specific disclosedness that
characterises the understanding of being. But we call the disclosedness
of something truth. That is the proper concept of truth, as it
already begins to dawn in antiquity. Being is given only if there
is disclosure, that is to say, if there is truth. But there is
truth only if a being exists which opens up, which discloses,
and indeed in such a way that disclosure itself belongs to the
mode of being of this being. We ourselves are such a being. The
<em>Dasein</em> Itself exists in the truth. To the <em>Dasein</em>
there belongs essentially a disclosed world and with that the
disclosedness of the <em>Dasein</em> itself. The <em>Dasein</em>,
by the nature of its existence, is "in" truth, and only
because it is "in" truth does it have the possibility
of being "in" untruth. Being is given only if truth,
hence if the <em>Dasein</em>, exists. And only for this reason is
it not merely possible to address beings but within certain limits
sometimes - presupposing that the <em>Dasein</em> exists - necessary.
We shall consolidate these problems of the interconnectedness
between being and truth into<em> the problem of the truth-character
of being</em> (<em>veritas transcendentalis</em>).</p>
<p>
We have thus identified four groups of problems that constitute
the content of the second part of the course: the problem of the
ontological difference, the problem of the basic articulation
of being, the problem of the possible modifications of being in
its ways of being, the problem of the truth-character of being.
The four theses treated provisionally in the first part correspond
to these four basic problems. More precisely, looking backward
from the discussion of the basic problems in the second half,
we see that the problems with which we are provisionally occupied
in the first part, following the lead of these theses, are not
accidental but grow out of the inner systematic coherence of the
general problem of being.</p>
<h3>§ 5. The character of ontological method<br>
The three basic components of Phenomenological method</h3>
<p>
Our conduct of the ontological investigation in the first and
second parts opens up for us at the same time a view of the way
in which these phenomenological investigations proceed. This
raises the question of the character of method in ontology. Thus
we come to the third part of the course: the scientific method
of ontology and the idea of phenomenology.</p>
<p>
The method of ontology, that is, of philosophy in general, is
distinguished by the fact that ontology has nothing in common
with any method of any of the other sciences, all of which as
positive sciences deal with beings. On the other hand, it is precisely
the analysis of the truth-character of being which shows that
being also is, as it were, based in a being, namely, in the <em>Dasein</em>.
Being is given only if the understanding of being, hence the <em>Dasein</em>,
exists. This being accordingly lays claim to a distinctive priority
in ontological inquiry. It makes itself manifest in all discussions
of the basic problems of ontology and above all in the fundamental
question of the meaning of being in general. The elaboration of
this question and its answer requires a general analytic of the
<em>Dasein</em>. Ontology has for its fundamental discipline the
analytic of the <em>Dasein</em>. This implies at the same time that
ontology cannot be established in a purely ontological manner.
Its possibility is referred back to a being, that is, to something
ontical - the <em>Dasein</em>. Ontology has an ontical foundation,
a fact which is manifest over and over again in the history of
philosophy down to the present. For example, it is expressed as
early as Aristotle's dictum that the first science, the science
of being, is theology. As the work of the freedom of the human
<em>Dasein</em>, the possibilities and destinies of philosophy are
bound up with man's existence, and thus with temporality and with
historicality, and indeed in a more original sense than is any
other science. Consequently, in clarifying the scientific character
of ontology, <em>the first task is the demonstration of its ontical
foundation</em> and the characterisation of this foundation itself.</p>
<p>
The <em>second task</em> consists in distinguishing the mode of
knowing operative in ontology as science of being, and this requires
us to <em>work out the methodological structure of ontological-transcendental
differentiation</em>. In early antiquity it was already seen that
being and its attributes in a certain way underlie beings and
precede them and so are a proteron, an earlier. The term denoting
this character by which being precedes beings is the expression
<em>a priori</em>, <em>apriority,</em> being earlier or prior. As
<em>a priori</em>, being is earlier than beings. The meaning of
this <em>a priori</em>, the sense of the earlier and its possibility,
has never been cleared up. The question has not even once been
raised as to why the determinations of being and being itself
must have is character of priority and how such priority is possible.
To be earlier is a determination of time, but it does not pertain
to the temporal order of the time that we measure by the clock;
rather, it is an earlier that belongs to the "inverted world."
Therefore, this earlier which characterises being is taken by
the popular understanding to be the later. Only the interpretation
of being by way of temporality can make clear why and how this
feature of being earlier, apriority, goes together with being.
The <em>a priori</em> character of being and of all the structures
of being accordingly calls for a specific kind of approach and
way of apprehending being - <em>a priori cognition</em>.</p>
<p>
The basic components of <em>a priori</em> cognition constitute what
we call <em>phenomenology</em>. Phenomenology is the name for the
method of ontology, that is, of scientific philosophy. Rightly
conceived, phenomenology is the concept of a method. It is therefore
precluded from the start that phenomenology should pronounce any
theses about being which have specific content, thus adopting
a so-called standpoint.</p>
<p>
We shall not enter into detail concerning which ideas about phenomenology
are current today, instigated in part by phenomenology itself.
We shall touch briefly on just one example. It has been said that
my work is Catholic phenomenology - presumably because it is
my conviction that thinkers like Thomas Aquinas and Duns Scotus
also understood something of philosophy, perhaps more than the
moderns. But the concept of a Catholic phenomenology is even more
absurd than the concept of a Protestant mathematics. Philosophy
as science of being is fundamentally distinct in method from any
other science. The distinction in method between, say, mathematics
and classical philology is not as great as the difference between
mathematics and philosophy or between philology and philosophy.
The breadth of the difference between philosophy and the positive
sciences, to which mathematics and philology belong, cannot at
all be estimated quantitatively. In ontology, being is supposed
to be grasped and comprehended conceptually by way of the phenomenological
method, in connection with which we may observe that, while phenomenology
certainly arouses lively interest today, what it seeks and aims
at was already vigorously pursued in Western philosophy from the
very beginning.</p>
<p>
Being is to be laid hold of and made our theme. Being is always
being of beings and accordingly it becomes accessible at first
only by starting with some being. Here the phenomenological vision
which does the apprehending must indeed direct itself toward a
being, but it has to do so in such a way that the being of this
being is thereby brought out so that it may be possible to mathematise
it. Apprehension of being, ontological investigation, always turns,
at first and necessarily, to some being; but then,<em> in a precise
way, it is led away from that being and led back to its being</em>.
We call this basic component of phenomenological method - the
leading back or reduction of investigative vision from a naively
apprehended being to being <em>phenomenological reduction</em>.
We are thus adopting a central term of Husserl's phenomenology
in its literal wording though not in its substantive intent. <em>For
Husserl</em> the phenomenological reduction, which he worked out
for the first time expressly in the I<em>deas Toward a Pure Phenomenology
and Phenomenological Philosophy</em> (1913), is the method of leading
phenomenological vision from the natural attitude of the human
being whose life is involved in the world of things and persons
back to the transcendental life of consciousness and its noetic-noematic
experiences, in which objects are constituted as correlates of
consciousness. For us phenomenological reduction means leading
phenomenological vision back from the apprehension of a being,
whatever may be the character of that apprehension, to the understanding
of the being of this being (projecting upon the way it is unconcealed).
Like every other scientific method, phenomenological method grows
and changes due to the progress made precisely with its help into
the subjects under investigation. Scientific method is never a
technique. As soon as it becomes one it has fallen away from its
own proper nature.</p>
<p>
Phenomenological reduction as the leading of our vision from beings
to being nevertheless is not the only basic component of phenomenological
method; in fact, it is not even the central component. For this
guidance of vision back from beings to being requires at the same
time that we should bring ourselves forward toward being itself.
Pure aversion from beings is a merely negative methodological
measure which not only needs to be supplemented by a positive
one but expressly requires us to be led toward being; it thus
requires guidance. Being does not become accessible like a being.
We do not simply find it in front of us. As is to be shown, it
must always be brought to view in a free projection. This projecting
of the antecedently given being upon its being and the structures
of its being we call phenomenological construction.</p>
<p>
But the method of phenomenology is likewise not exhausted by phenomenological
construction. We have heard that every projection of being occurs
in a reductive recursion from beings. The consideration of being
takes its start from beings. This commencement is obviously always
determined by the factual experience of beings and the range of
possibilities of experience that at any time are peculiar to a
factical <em>Dasein</em>, and hence to the historical situation
of a philosophical investigation. It is not the case that at all
times and for everyone all beings and all specific domains of
beings are accessible in the same way; and, even if beings are
accessible inside the range of experience, the question still
remains whether, within naive and common experience, they are
already suitably understood in their specific mode of being. Because
the <em>Dasein</em> is historical in its own existence, possibilities
of access and modes of interpretation of beings are themselves
diverse, varying in different historical circumstances. A glance
at the history of philosophy shows that many domains of beings
were discovered very early - nature, space, the soul - but that,
nevertheless, they could not yet be comprehended in their specific
being. As early as antiquity a common or average concept of being
came to light, which was employed for the interpretation of all
the beings of the various domains of being and their modes of
being, although their specific being itself, taken expressly in
its structure, was not made into a problem and could not be defined.
Thus Plato saw quite well that the soul, with its logos, is a
being different from sensible being. But he was not in a position
to demarcate the specific mode of being of this being from the
mode of being of any other being or non-being. Instead, for him
as well as for Aristotle and subsequent thinkers down to Hegel,
and all the more so for their successors, all ontological investigations
proceed within an average concept of being in general. Even the
ontological investigation which we are now conducting is determined
by its historical situation and, therewith, by certain possibilities
of approaching beings and by the preceding philosophical tradition.
The store of basic philosophical concepts derived from the philosophical
tradition is still so influential today that this effect of tradition
can hardly be overestimated. It is for this reason that all philosophical
discussion, even the most radical attempt to begin all over again,
is pervaded by traditional concepts and thus by traditional horizons
and traditional angles of approach, which we cannot assume with
unquestionable certainty to have arisen originally and genuinely
from the domain of being and the constitution of being they claim
to comprehend. It is for this reason that there necessarily belongs
to the conceptual interpretation of being and its structures,
that is, to the reductive construction of being, a <em><strong>destruction</strong></em>
- a critical process in which the traditional concepts, which
at first must necessarily be employed, are de-constructed down
to the sources from which they were drawn. Only by means of this
destruction can ontology fully assure itself in a phenomenological
way of the genuine character of its concepts.</p>
<p>
These three basic components of phenomenological metho - reduction,
construction, destruction - belong together in their content and
must receive grounding in their mutual pertinence. Construction
in philosophy is necessarily destruction, that is to say, a de-constructing
of traditional concepts carried out in a historical recursion
to the tradition. And this is not a negation of the tradition
or a condemnation of it as worthless; quite the reverse, it signifies
precisely a positive appropriation of tradition. Because destruction
belongs to construction, philosophical cognition is essentially
at the same time, in a certain sense, historical cognition. History
of philosophy, as it is called, belongs to the concept of philosophy
as science, to the concept of phenomenological investigation.
The history of philosophy is not an arbitrary appendage to the
business of teaching philosophy, which provides an occasion for
picking up some convenient and easy theme for passing an examination
or even for just looking around to see how things were in earlier
times. Knowledge of the history of philosophy is intrinsically
unitary on its own account, and the specific mode of historical
cognition in philosophy differs in its object from all other scientific
knowledge of history.</p>
<p>
The method of ontology thus delineated makes it possible to characterise
the idea of phenomenology distinctively as the scientific procedure
of philosophy. We therewith gain the possibility of defining the
concept of philosophy more concretely. Thus our considerations
in the third part lead back again to the starting point of the
course.</p>
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Martin Heidegger (1927)
The Basic Problems of Phenomenology
Introduction
Source: The Basic Problems of Phenomenology (1954) Published by Indiana University Press, 1975. Introduction, p 1 - 23 reproduced here.
§ 1. Exposition and general division of the theme
This course sets for itself the task of posing the basic problems
of phenomenology, elaborating them, and proceeding to some
extent toward their solution. Phenomenology must develop its concept
out of what it takes as its theme and how it investigates its
object. Our considerations are aimed at the inherent content
and inner systematic relationships of the basic problems.
The goal is to achieve a fundamental illumination of these problems.
In negative terms this means that our purpose is not to acquire
historical knowledge about the circumstances of the modern movement
in philosophy called phenomenology. We shall be dealing not with
phenomenology but with what phenomenology itself deals with. And,
again, we do not wish merely to take note of it so as to be able
to report then that phenomenology deals with this or that subject;
instead, the course deals with the subject itself, and you yourself
are supposed to deal with it, or learn how to do so, as the course
proceeds. The point is not to gain some knowledge about philosophy
but to be able to philosophise. An introduction to the basic problems
could lead to that end.
And these basic problems themselves? Are we to take it on trust
that the ones we discuss do in fact constitute the inventory of
the basic problems? How shall we arrive at these basic problems?
Not directly but by the roundabout way of a discussion of certain
individual problems. From these we shall sift out the basic
problems and determine their systematic interconnection. Such
an understanding of the basic problems should yield insight into
the degree to which philosophy as a science is necessarily demanded
by them.
The course accordingly divides into three parts. At the
outset we may outline them roughly as follows:
Concrete phenomenological inquiry leading to the basic problems
The basic problems of phenomenology in their systematic order
and foundation
The scientific way of treating these problems and the idea
of phenomenology
The path of our reflections will take us from certain individual
problems to the basic problems. The question therefore arises,
How are we to gain the starting point of our considerations? How
shall we select and circumscribe the individual problems? Is this
to be left to chance and arbitrary choice? In order to avoid the
appearance that we have simply assembled a few problems at random,
an introduction leading up to the individual problems is required.
It might be thought that the simplest and surest way would be
to derive the concrete individual phenomenological problems from
the concept of phenomenology. Phenomenology is essentially such
and such; hence it encompasses such and such problems. But we
have first of all to arrive at the concept of phenomenology. This
route is accordingly closed to us. But to circumscribe the concrete
problems we do not ultimately need a clear-cut and fully validated
concept of phenomenology. Instead it might be enough to have some
acquaintance with what is nowadays familiarly known by the name
"phenomenology." Admittedly, within phenomenological
inquiry there are again differing definitions of its nature and
tasks. But, even if these differences in defining the nature of
phenomenology could be brought to a consensus, it would remain
doubtful whether the concept of phenomenology thus attained, a
sort of average concept, could direct us toward the concrete problems
to be chosen. For we should have to be certain beforehand that
phenomenological inquiry today has reached the center of philosophy's
problems and has defined its own nature by way of their possibilities.
As we shall see, however, this is not the case - and so little
is it the case that one of the main purposes of this course is
to show that conceived in its basic tendency, phenomenological
research can represent nothing less than the more explicit and
more radical understanding of the idea of a scientific philosophy
which philosophers from ancient times to Hegel sought to realize
time and again in a variety of internally coherent endeavours.
Hitherto, phenomenology has been understood, even within that
discipline itself, as a science propaedeutic to philosophy, preparing
the ground for the proper philosophical disciplines of logic,
ethics, aesthetics, and philosophy of religion. But in this definition
of phenomenology as a preparatory science the traditional stock
of philosophical disciplines is taken over without asking whether
that same stock is not called in question and eliminated precisely
by phenomenology itself. Does not phenomenology contain within
itself the possibility of reversing the alienation of philosophy
into these disciplines and of revitalising and reappropriating
in its basic tendencies the great tradition of philosophy with
its essential answers? We shall maintain that phenomenology is
not just one philosophical science among others, nor is it the
science preparatory to the rest of them; rather, the expression
"phenomenology" is the name for the method of
scientific philosophy in general.
Clarification of the idea of phenomenology is equivalent to exposition
of the concept of scientific philosophy. To be sure, this does
not yet tell us what phenomenology means as far as its content
is concerned, and it tells us even less about how this method
is to be put into practice. But it does indicate how and why we
must avoid aligning ourselves with any contemporary tendency in
phenomenology.
We shall not deduce the concrete phenomenological problems from
some dogmatically proposed concept of phenomenology; on the contrary,
we shall allow ourselves to be led to them by a more general and
preparatory discussion of the concept of scientific philosophy
in general. We shall conduct this discussion in tacit apposition
to the basic tendencies of Western philosophy from antiquity to
Hegel.
In the early period of ancient thought philosophia means the same
as science in general. Later, individual philosophies, that is
to say, individual sciences - medicine, for instance, and mathematics
- become detached from philosophy. The term philosophia then refers
to a science which underlies and encompasses all the other particular
sciences. Philosophy becomes science pure and simple. More and
more it takes itself to be the first and highest science or, as
it was called during the period of German idealism, absolute science.
If philosophy is absolute science, then the expression "scientific
philosophy" contains a pleonasm. It then means scientific
absolute science. It suffices simply to say "philosophy."
This already implies science pure and simple. Why then do we still
add the adjective "scientific" to the expression "philosophy"?
A science, not to speak of absolute science, is scientific by
the very meaning of the term. We speak of "scientific philosophy"
principally because conceptions of philosophy prevail which not
only imperil but even negate its character as science pure and
simple. These conceptions of philosophy are not just contemporary
but accompany the development of scientific philosophy throughout
the time philosophy has existed as a science. On this view philosophy
is supposed not only, and not in the first place, to be a theoretical
science, but to give practical guidance to our view of things
and their interconnection and our attitudes toward them, and to
regulate and direct our interpretation of existence and its meaning.
Philosophy is wisdom of the world and of life, or, to use an expression
current nowadays, philosophy is supposed to provide a Weltanschauung,
a world-view. Scientific philosophy can thus be set off against
philosophy as world-view.
We shall try to examine this distinction more critically and to
decide whether it is valid or whether it has to be absorbed into
one of its members. In this way the concept of philosophy should
become clear to us and put us in a position to justify the selection
of the individual problems to be dealt with in the first part.
It should be borne in mind here that these discussions concerning
the concept of philosophy can be only provisional - provisional
not just in regard to the course as a whole but provisional in
general. For the concept of philosophy is the most proper and
highest result of philosophy itself. Similarly, the question whether
philosophy is at all possible or not can be decided only by philosophy
itself.
§ 2. The concept of philosophy
Philosophy and world-view
In discussing the difference between scientific philosophy and
philosophy as world-view, we may fittingly start from the latter
notion and begin with the term "Weltanschauung,"
"world-view." This expression is not a translation from
Greek, say, or Latin. There is no such expression as kosmotheoria.
The word "Weltanschauung" is of specifically
German coinage; it was in fact coined within philosophy. It first
turns up in its natural meaning in Kant's Critique of Judgment
- world-intuition in the sense of contemplation of the world given
to the senses or, as Kant says, the mundus sensibilis -
a beholding of the world as simple apprehension of nature in the
broadest sense. Goethe and Alexander von Humboldt thereupon use
the word in this way. This usage dies out in the thirties of the
last century under the influence of a new meaning given to the
expression "Weltanschauung" by the Romantics
and principally by Schelling. In the Introduction to the draft
of a System of Philosophy of Nature, (1799), Schelling says: "Intelligence
is productive in a double manner, either blindly and unconsciously
or freely and consciously; it is unconsciously productive in Weltanschauung
and consciously productive in the creation of an ideal world."
Here Weltanschauung is directly assigned not to sense-observation
but to intelligence, albeit to unconscious intelligence. Moreover,
the factor of productivity, the independent formative process
of intuition, is emphasised. Thus the word approaches the meaning
we are familiar with today, a self-realised, productive as well
as conscious way of apprehending and interpreting the universe
of beings. Schelling speaks of a schematism of Weltanschauung,
a schematised form for the different possible world-views which
appear and take shape in fact. A view of the world, understood
in this way, does not have to be produced with a theoretical intention
and with the means of theoretical science. In his Phenomenology
of Spirit, Hegel speaks of a "moral world-view."
Görres makes use of the expression "poetic world-view."
Ranke speaks of the "religious and Christian world-view."
Mention is made sometimes of the democratic, sometimes of the
pessimistic world-view or even of the medieval world-view. Schleiermacher
says: "It is only our world-view that makes our knowledge
of God complete." Bismarck at one point writes to his bride:
"What strange views of the world there are among clever people!"
From the forms and possibilities of world-view thus enumerated
it becomes clear that what is meant by this term is not only a
conception of the contexture of natural things but at the same
time an interpretation of the sense and purpose of the human Dasein
[the being that we are ourselves] and hence of history. A world-view
always includes a view of life. A world-view grows out of an all-inclusive
reflection on the world and the human Dasein, and this
again happens in different ways, explicitly and consciously in
individuals or by appropriating an already prevalent world-view.
We grow up within such a world-view and gradually become accustomed
to it. Our world-view is determined by environment - people, race,
class, developmental stage of culture. Every world-view thus individually
formed arises out of a natural world-view, out of a range of conceptions
of the world and determinations of the human Dasein which
are at any particular time given more or less explicitly with
each such Dasein. We must distinguish the individually
formed world-view or the cultural world-view from the natural
world-view.
A world-view is not a matter of theoretical knowledge, either
in respect of its origin or in relation to its use. It is not
simply retained in memory like a parcel of cognitive property.
Rather, it is a matter of a coherent conviction which determines
the current affairs of life more or less expressly and directly.
A world-view is related in its meaning to the particular contemporary
Dasein at any given time. In this relationship to the Dasein
the world-view is a guide to it and a source of strength under
pressure. Whether the world-view is determined by superstitions
and prejudices or is based purely on scientific knowledge and
experience or even, as is usually the case, is a mixture of superstition
and knowledge, prejudice and sober reason it all comes to the
same thing; nothing essential is changed.
This indication of the characteristic traits of what we mean by
the term "world-view" may suffice here. A rigorous definition
of it would have to be gained in another way, as we shall see.
In his Psychologie der Weltanschauungen, Jaspers says that
"when we speak of world-views we mean Ideas, what is ultimate
and total in man, both subjectively, as life-experience and power
and character, and objectively, as a world having objective shape."
For our purpose of distinguishing between philosophy as world-view
and scientific philosophy, it is above all important to see that
the world-view, in its meaning, always arises out of the particular
factical existence of the human being in accordance with his factical
possibilities of thoughtful reflection and attitude-formation,
and it arises thus for this factical Dasein. The world-view
is something that in each case exists historically from, with,
and for the factical Dasein. A philosophical world-view
is one that expressly and explicitly or at any rate preponderantly
has to be worked out and brought about by philosophy, that is
to say, by theoretical speculation, to the exclusion of artistic
and religious interpretations of the world and the Dasein.
This world-view is not a by-product of philosophy; its cultivation,
rather, is the proper goal and nature of philosophy itself. In
its very concept philosophy is world-view philosophy, philosophy
as world-view. If philosophy in the form of theoretical knowledge
of the world aims at what is universal in the world and ultimate
for the Dasein - the whence, the whither, and the wherefore
of the world and life - then this differentiates it from the particular
sciences, which always consider only a particular region of the
world and the Dasein, as well as from the artistic and
religious attitudes, which are not based primarily on the theoretical
attitude. It seems to be without question that philosophy has
as its goal the formation of a world-view. This task must define
the nature and concept of philosophy. Philosophy, it appears,
is so essentially world-view philosophy that it would be preferable
to reject this latter expression as an unnecessary overstatement.
And what is even more, to propose to strive for a scientific philosophy
is a misunderstanding. For the philosophical world-view, it is
said, naturally ought to be scientific. By this is meant: first,
that it should take cognisance of the results of the different
sciences and use them in constructing the world-picture and the
interpretation of the Dasein; secondly, that it ought to
be scientific by forming the world-view in strict conformity with
the rules of scientific thought. This conception of philosophy
as the formation of a world-view in a theoretical way is so much
taken for granted that it commonly and widely defines the concept
of philosophy and consequently also prescribes for the popular
mind what is to be and what ought to be expected of philosophy.
Conversely, if philosophy does not give satisfactory answers to
the questions of world-view, the popular mind regards it as insignificant.
Demands made on philosophy and attitudes taken toward it are governed
by this notion of it as the scientific construction of a world-view.
To determine whether philosophy succeeds or fails in this task,
its history is examined for unequivocal confirmation that it deals
knowingly with the ultimate questions - of nature, of the soul,
that is to say, of the freedom and history of man, of God.
If philosophy is the scientific construction of a world-view,
then the: distinction between "scientific philosophy"
and "philosophy as world-view" vanishes. The two together
constitute the essence of philosophy, so that what is really emphasised
ultimately is the task of the world-view. This seems also to be
the view of Kant, who put the scientific character of philosophy
on a new basis. We need only recall the distinction he drew in
the introduction to the Logic between the academic and
the cosmic conceptions of philosophy. Here we turn to an
oft-quoted Kantian distinction which apparently supports the distinction
between scientific philosophy and philosophy as world-view or,
more exactly, serves as evidence for the fact that Kant himself,
for whom the scientific character of philosophy was central, likewise
conceives of philosophy as philosophical world-view.
According to the academic concept or, as Kant also says,
in the scholastic sense, philosophy is the doctrine of the skill
of reason and includes two parts: "first, a sufficient stock
of rational cognitions from concepts; and, secondly, a systematic
interconnection of these cognitions or a combination of them in
the idea of a whole." Kant is here thinking of the fact that
philosophy in the scholastic sense includes the interconnection
of the formal principles of thought and of reason in general as
well as the discussion and determination of those concepts which,
as a necessary presupposition, underlie our apprehension of the
world, that is to say, for Kant, of nature. According to the academic
concept, philosophy is the whole of all the formal and material
fundamental concepts and principles of rational knowledge.
Kant defines the cosmic concept of philosophy or, as he
also says, philosophy in the cosmopolitan sense, as follows: "But
as regards philosophy in the cosmic sense (in sensu cosmico),
it can also be called a science of the supreme maxims of the use
of our reason, understanding by 'maxim' the inner principle of
choice among diverse ends." Philosophy in the cosmic sense
deals with that for the sake of which all use of reason, including
that of philosophy itself, is what it is. "For philosophy
in the latter sense is indeed the science of the relation of every
use of knowledge and reason to the final purpose of human reason,
under which, as the supreme end, all other ends are subordinated
and must come together into unity in it. In this cosmopolitan
sense the field of philosophy can be defined by the following
questions: 1) What can I know? 2) What should I do? 3) What may
I hope? 4) What is man?" At bottom, says Kant, the first
three questions are concentrated in the fourth, "What is
man?" For the determination of the final ends of human reason
results from the explanation of what man is. It is to these ends
that philosophy in the academic sense also must relate.
Does this Kantian separation between philosophy in the scholastic
sense and philosophy in the cosmopolitan sense coincide with the
distinction between scientific philosophy and philosophy as world-view?
Yes and no. Yes, since Kant after all makes a distinction within
the concept of philosophy and, on the basis of this distinction,
makes the questions of the end and limits of human existence central.
No, since philosophy in the cosmic sense does not have the task
of developing a world-view in the designated sense. What Kant
ultimately has in mind as the task of philosophy in the cosmic
sense, without being able to say so explicitly, is nothing but
the a priori and therefore ontological circumscription
of the characteristics which belong to the essential nature of
the human Dasein and which also generally determine the
concept of a world-view. As the most fundamental a priori
determination of the essential nature of the human Dasein
Kant recognises the proposition: Man is a being which exists as
its own end. Philosophy in the cosmic sense, as Kant understands
it, also has to do with determinations of essential nature. It
does not seek a specific factual account of the merely factually
known world and the merely factually lived life; rather, it seeks
to delimit what belongs to world in general, to the Dasein
in general, and thus to world-view in general. Philosophy in the
cosmic sense has for Kant exactly the same methodological character
as philosophy in the academic sense, except that for reasons which
we shall not discuss here in further detail Kant does not see
the connection between the two. More precisely, he does not see
the basis for establishing both concepts on a common original
ground. We shall deal with this later on. For the present it is
clear only that, if philosophy is viewed as being the scientific
construction of a world-view, appeal should not be made to Kant.
Fundamentally, Kant recognises only philosophy as science.
A world-view, as we saw, springs in every case from a factical
Dasein in accordance with its factical possibilities, and
it is what it is always for this particular Dasein. This
in no way asserts a relativism of world-views. What a world-view
fashioned in this way says can be formulated in propositions and
rules which are related in their meaning to a specific really
existing world, to the particular factically existing Dasein.
Every world-view and life-view posits; that is to say, it is related
being-ly to some being or beings. It posits a being, something
that is; it is positive. A world-view belongs to each Dasein
and, like this Dasein, it is always in fact determined
historically. To the world-view there belongs this multiple positivity
that it is always rooted in a Dasein which is in such and
such a way; that as such it relates to the existing world and
points to the factically existent Dasein. It is just because
this positivity - that is, the relatedness to beings, to world
that is, Dasein that is - belongs to the essence of the
world-view, and thus in general to the formation of the world-view,
that the formation of a world-view cannot be the task of philosophy.
To say this is not to exclude but to include the idea that philosophy
itself is a distinctive primal form of world-view. Philosophy
can and perhaps must show, among many other things, that something
like a world-view belongs to the essential nature of the Dasein.
Philosophy can and must define what in general constitutes the
structure of a world-view. But it can never develop and posit
some specific world-view qua just this or that particular one.
Philosophy is not essentially the formation of a world-view; but
perhaps just on this account it has an elementary and fundamental
relation to all world-view formation, even to that which is not
theoretical but factually historical.
The thesis that world-view formation does not belong to the task
of philosophy is valid, of course, only on the presupposition
that philosophy does not relate in a positive manner to some being
qua this or that particular being, that it does not posit a being.
Can this presupposition that philosophy does not relate positively
to beings, as the sciences do, be justified? What then is philosophy
supposed to concern itself with if not with beings, with that
which is, as well as with the whole of what is? What is not, is
surely the nothing. Should philosophy, then, as absolute science,
have the nothing as its theme? What can there be apart from nature,
history, God, space, number? We say of each of these, even though
in a different sense, that it is. We call it a being. In relating
to it, whether theoretically or practically, we are comporting
ourselves toward a being. Beyond all these beings there is nothing.
Perhaps there is no other being beyond what has been enumerated,
but perhaps, as in the German idiom for "there is,"
es gibt [literally, it gives], still something else is given,
something else which indeed is not but which nevertheless, in
a sense yet to be determined, is given. Even more. In the end
something is given which must be given if we are to be able to
make beings accessible to us as beings and comport ourselves toward
them, something which, to be sure, is not but which must be given
if we are to experience and understand any beings at all. We are
able to grasp beings as such, as beings, only if we understand
something like being. If we did not understand, even though at
first roughly and without conceptual comprehension, what actuality
signifies, then the actual would remain hidden from us. If we
did not understand what reality means, then the real would remain
inaccessible. If we did not understand what life and vitality
signify, then we would not be able to comport ourselves toward
living beings. If we did not understand what existence and existentiality
signify, then we ourselves would not be able to exist as Dasein.
If we did not understand what permanence and constancy signify,
then constant geometric relations or numerical proportions would
remain a secret to us. We must understand actuality, reality,
vitality, existentiality, constancy in order to be able to comport
ourselves positively toward specifically actual, real, living,
existing, constant beings. We must understand being so that we
may be able to be given over to a world that is, so that we can
exist in it and be our own Dasein itself as a being. We
must be able to understand actuality before all factual experience
of actual beings. This understanding of actuality or of being
in the widest sense as over against the experience of beings is
in a certain sense earlier than the experience of beings. To say
that the understanding of being precedes all factual experience
of beings does not mean that we would first need to have an explicit
concept of being in order to experience beings theoretically or
practically. We must understand being - being, which may no longer
itself be called a being, being, which does not occur as a being
among other beings but which nevertheless must be given and in
fact is given in the understanding of being.
§ 3. Philosophy as science of being
We assert now that being is the proper and sole theme of philosophy.
This is not our own invention; it is a way of putting the theme
which comes to life at the beginning of philosophy in antiquity,
and it assumes its most grandiose form in Hegel's logic. At present
we are merely asserting that being is the proper and sole theme
of philosophy. Negatively, this means that philosophy is not a
science of beings but of being or, as the Greek expression goes,
ontology. We take this expression in the widest possible
sense and not in the narrower one it has, say, in Scholasticism
or in modern philosophy in Descartes and Leibniz.
A discussion of the basic problems of phenomenology then is tantamount
to providing fundamental substantiation for this assertion that
philosophy is the science of being and establishing how it is
such. The discussion should show the possibility and necessity
of the absolute science of being and demonstrate its character
in the very process of the inquiry. Philosophy is the theoretical
conceptual interpretation of being, of being's structure and its
possibilities. Philosophy is ontological. In contrast, a world-view
is a positing knowledge of beings and a positing attitude toward
beings; it is not ontological but ontical. The formation of a
world-view falls outside the range of philosophy's tasks, but
not because philosophy is in an incomplete condition and does
not yet suffice to give a unanimous and universally cogent answer
to the questions pertinent to world-views; rather, the formation
of a world-view falls outside the range of philosophy's tasks
because philosophy in principle does not relate to beings. It
is not because of a defect that philosophy renounces the task
of forming a world-view but because of a distinctive priority:
it deals with what every positing of beings, even the positing
done by a world-view, must already presuppose essentially. The
distinction between philosophy as science and philosophy as world-view
is untenable, not - as it seemed earlier - because scientific
philosophy has as its chief end the formation of a world-view
and thus would have to be elevated to the level of a world-view
philosophy, but because the notion of a world-view philosophy
is simply inconceivable. For it implies that philosophy, as science
of being, is supposed to adopt specific attitudes toward and posit
specific things about beings. To anyone who has even an approximate
understanding of the concept of philosophy and its history, the
notion of a world-view philosophy is an absurdity. If one term
of the distinction between scientific philosophy and world-view
philosophy is inconceivable, then the other, too, must be inappropriately
conceived. Once it has been seen that world-view philosophy is
impossible in principle if it is supposed to be philosophy, then
the differentiating adjective "scientific" is no longer
necessary for characterising philosophy. That philosophy is scientific
is implied in its very concept. It can be shown historically that
at bottom all the great philosophies since antiquity more or less
explicitly took themselves to be, and as such sought to be, ontology.
In a similar way, however, it can also be shown that these attempts
failed over and over again and why they had to fail. I gave the
historical proof of this in my courses of the last two semesters,
one on ancient philosophy and the other on the history of philosophy
from Thomas Aquinas to Kant. We shall not now refer to this historical
demonstration of the nature of philosophy, a demonstration having
its own peculiar character. Let us rather in the whole of the
present course try to establish philosophy on its own basis, so
far as it is a work of human freedom. Philosophy must legitimate
by its own resources its claim to be universal ontology.
In the meantime, however, the statement that philosophy is the
science of being remains a pure assertion. Correspondingly, the
elimination of world-view formation from the range of philosophical
tasks has not yet been warranted. We raised this distinction between
scientific philosophy and world-view philosophy in order to give
a provisional clarification of the concept of philosophy and to
demarcate it from the popular concept. The clarification and demarcation,
again, were provided in order to account for the selection of
the concrete phenomenological problems to be dealt with next and
to remove from the choice the appearance of complete arbitrariness.
Philosophy is the science of being. For the future we shall mean
by "philosophy" scientific philosophy and nothing else.
In conformity with this usage, all non-philosophical sciences
have as their theme some being or beings, and indeed in such a
way that they are in every case antecedently given as beings to
those sciences. They are posited by them in advance; they are
a positum for them. All the propositions of the non-philosophical
sciences, including those of mathematics, are positive propositions.
Hence, to distinguish them from philosophy, we shall call all
non-philosophical sciences positive sciences. Positive sciences
deal with that which is, with beings; that is to say, they always
deal with specific domains, for instance, nature. Within a given
domain scientific research again cuts out particular spheres:
nature as physically material lifeless nature and nature as living
nature. It divides the sphere of the living into individual fields:
the plant world, the animal world. Another domain of beings is
history; its spheres are art history, political history, history
of science, and history of religion. Still another domain of beings
is the pure space of geometry, which is abstracted from space
pre-theoretically uncovered in the environing world. The beings
of these domains are familiar to us even if at first and for the
most part we are not in a position to delimit them sharply and
clearly from one another. We can, of course, always name, as a
provisional description which satisfies practically the purpose
of positive science, some being that falls within the domain.
We can always bring before ourselves, as it were, a particular
being from a particular domain as an example. Historically, the
actual partitioning of domains comes about not according to some
preconceived plan of a system of science but in conformity with
the current research problems of the positive sciences.
We can always easily bring forward and picture to ourselves some
being belonging to any given domain. As we are accustomed to say,
we are able to think something about it. What is the situation
here with philosophy's object? Can something like being be imagined?
If we try to do this, doesn't our head start to swim? Indeed,
at first we are baffled and find ourselves clutching at thin air
A being - that's something, a table, a chair, a tree, the sky,
a body, some words, an action. A being, yes, indeed - but being?
It looks like nothing - and no less a thinker than Hegel said
that being and nothing are the same. Is philosophy as science
of being the science of nothing? At the outset of our considerations,
without raising any false hopes and without mincing matters, we
must confess that under the heading of being we can at first think
to ourselves nothing. On the other hand, it is just as certain
that we are constantly thinking being. We think being just as
often as, daily, on innumerable occasions, whether aloud or silently,
we say "This is such and such," "That other
is not so," "That was," "It
will be." In each use of a verb we have already thought,
and have always in some way understood, being. We understand immediately
"Today is Saturday; the sun is up." We understand the
"is" we use in speaking, although we do not comprehend
it conceptually. The meaning of this "is" remains closed
to us. This understanding of the "is" and of being in
general is so much a matter of course that it was possible for
the dogma to spread in philosophy uncontested to the present day
that being is the simplest and most self-evident concept, that
it is neither susceptible of nor in need of definition. Appeal
is made to common sense. But wherever common sense is taken to
be philosophy's highest court of appeal, philosophy must become
suspicious. In On the Essence of Philosophical Criticism,
Hegel says: "Philosophy by its very nature is esoteric; for
itself it is neither made for the masses nor is it susceptible
of being cooked up for them. It is philosophy only because it
goes exactly contrary to the understanding and thus even more
so to 'sound common sense,' the so-called healthy human understanding,
which actually means the local and temporary vision of some limited
generation of human beings. To that generation the world of philosophy
is in and for itself a topsy-turvy, an inverted, world.
The demands and standards of common sense have no right to claim
any validity or to represent any authority in regard to what philosophy
is and what it is not.
What if being were the most complex and most obscure concept?
What f arriving at the concept of being were the most urgent task
of philosophy, the task which has to be taken up ever anew? Today,
when philosophising is so barbarous, so much like a St. Vitus'
dance, as perhaps in no other period of the cultural history of
the West, and when nevertheless the resurrection of metaphysics
is hawked up and down all the streets, what Aristotle says on one
of his most important investigations in the Metaphysics
has been completely forgotten. "That which has been sought
for from of old and now and in the future and constantly, and
that on which inquiry founders over and over again, is the problem
What is being?" If philosophy is the science of being, then
the first and last and basic problem of philosophy must be, What
does being signify? Whence can something like being in general
be understood? How is understanding of being at all possible?
§ 4. The four theses about being
and the basic problems of phenomenology
Before we broach these fundamental questions, it will be worthwhile
first to make ourselves familiar for once with discussions about
being. To this end we shall deal in the first part of the course
with some characteristic theses about being as individual concrete
phenomenological problems, theses that have been advocated in
the course of the history of Western philosophy since antiquity.
In this connection we are interested, not in the historical contexts
of the philosophical inquiries within which these theses about
being make their appearance, but in their specifically inherent
content. This content is to be discussed critically, so that we
may make the transition from it to the above-mentioned basic problems
of the science of being. The discussion of these theses should
at the same time render us familiar with the phenomenological
way of dealing with problems relating to being. We choose four
such theses:
Kant's thesis: Being is not a real predicate.
The thesis of medieval ontology (Scholasticism) which goes
back to Aristotle: To the constitution of the being of a being
there belong (a) whatness, essence (Was-sein, essentia),
and (b) existence or extantness (existentia, Vorhandensein).
The thesis of modern ontology: The basic ways of being are
the being of nature (res extensa) and the being of mind (res
cogitans).
The thesis of logic in the broadest sense: Every being, regardless
of its particular way of being, can be addressed and talked about
by means of the "is." The being of the copula.
These theses seem at first to have been gathered together arbitrarily.
Looked at more closely, however, they are interconnected in a
most intimate way. Attention to what is denoted in these theses
leads to the insight that they cannot be brought up adequately
- not even as problems - as long as the fundamental question
of the whole science of being has not been put and answered: the
question of the meaning of being in general. The second part
of our course will deal with this question. Discussion of the
basic question of the meaning of being in general and of the problems
arising from that question constitutes the entire stock of basic
problems of phenomenology in their systematic order and their
foundation. For the present we delineate the range of these problems
only roughly.
On what path can we advance toward the meaning of being in general?
Is not the question of the meaning of being and the task of an
elucidation of this concept a pseudo-problem if, as usual, the
opinion is held dogmatically that being is the most general and
simplest concept? What is the source for defining this concept
and in what direction is it to be resolved?
Something like being reveals itself to us in the understanding
of being, an understanding that lies at the root of all comportment
toward beings. Comportment toward beings belongs, on its part,
to a definite being, the being which we ourselves are, the human
Dasein. It is to the human Dasein that there belongs
the understanding of being which first of all makes possible every
comportment toward beings. The understanding of being has itself
the mode of being of the human Dasein. The more originally
and appropriately we define this being in regard to the structure
of its being, that is to say, ontologically, the more securely
we are placed in a position to comprehend in its structure the
understanding of being that belongs to the Dasein, and
the more clearly and unequivocally the question can then be posed,
What is it that makes this understanding of being possible at
all? Whence - that is, from which antecedently given horizon -
do we understand the like of being?
The analysis of the understanding of being in regard to what is
specific to this understanding and what is understood in it or
its intelligibility presupposes an analytic of the Dasein
ordered to that end. This analytic has the task of exhibiting
the basic constitution of the human Dasein and of characterising
the meaning of the Dasein's being. In this ontological
analytic of the Dasein, the original constitution of the
Dasein's being is revealed to be temporality. The
interpretation of temporality leads to a more radical understanding
and conceptual comprehension of time than has been possible hitherto
in philosophy. The familiar concept of time as traditionally treated
in philosophy is only an offshoot of temporality as the original
meaning of the Dasein. If temporality constitutes the meaning
of the being of the human Dasein and if understanding of
being belongs to the constitution of the Dasein's being,
then this understanding of being, too, must be possible only on
the basis of temporality. Hence there arises the prospect of a
possible confirmation of the thesis that time is the horizon from
which something like being becomes at all intelligible. We interpret
being by way of time (tempus). The interpretation is a
Temporal one. The fundamental subject of research in ontology,
as determination of the meaning of being by way of time, is Temporality.
We said that ontology is the science of being. But being is always
the being of a being. Being is essentially different from a being,
from beings. How is the distinction between being and beings to
be grasped? How can its possibility be explained? If being is
not itself a being, how then does it nevertheless belong to beings,
since, after all, beings and only beings are? What does it mean
to say that being belongs to beings? The correct answer to this
question is the basic presupposition needed to set about the problems
of ontology regarded as the science of being. We must be able
to bring out clearly the difference between being and beings in
order to make something like being the theme of inquiry. This
distinction is not arbitrary; rather, it is the one by which the
theme of ontology and thus of philosophy itself is first of all
attained. It is a distinction which is first and foremost constitutive
for ontology. We call it the ontological difference - the
differentiation between being and beings. Only by making this
distinction - krinein in Greek - not between one being
and another being but between being and beings do we first enter
the field of philosophical research. Only by taking this critical
stance do we keep our own standing inside the field of philosophy.
Therefore, in distinction from the sciences of the things that
are, of beings, ontology, or philosophy in general, is the critical
science, or the science of the inverted world, With this distinction
between being and beings and that selection of being as theme
we depart in principle from the domain of beings. We surmount
it, transcend it. We can also call the science of being, a critical
science, transcendental science. In doing so we are not
simply taking over unaltered the concept of the transcendental
in Kant, although we are indeed adopting its original sense and
its true tendency, perhaps still concealed from Kant. We are surmounting
beings in order to reach being. Once having made the ascent we
shall not again descend to a being, which, say, might lie like
another world behind the familiar beings. The transcendental science
of being has nothing to do with popular metaphysics, which deals
with some being behind the known beings; rather, the scientific
concept of metaphysics is identical with the concept of philosophy
in general - critically transcendental science of being, ontology.
It is easily seen that the ontological difference can be cleared
up and carried out unambiguously for ontological inquiry only
if and when the meaning of being in general has been explicitly
brought to light, that is to say, only when it has been shown
how temporality makes possible the distinguishability between
being and beings. Only on the basis of this consideration can
the Kantian thesis that being is not a real predicate be given
its original sense and adequately explained.
Every being is something, it has its what and as such has
a specific possible mode of being. In the first part of
our course, while discussing the second thesis, we shall show
that ancient as well as medieval ontology dogmatically enunciated
this proposition - that to each being there belongs a what and
way of being, essentia and existentia - as if
it were self-evident. For us the question arises, Can the reason
every being must and can have a what, a ti, and a possible
way of being be grounded in the meaning of being itself, that
is to say, Temporally? Do these characteristics, whatness and
way of being, taken with sufficient breadth, belong to being itself?
"Is" being articulated by means of these characteristics
in accordance with its essential nature? With this we are now
confronted by the problem of the basic articulation of being,
the question of the necessary belonging-together of whatness
and way-of-being and of the belonging of the two of
them in their unity to the idea of being in general.
Every being has a way-of-being. The question is whether this way-of-being
has the same character in every being - as ancient ontology believed
and subsequent periods have basically had to maintain even down
to the present - or whether individual ways-of-being are mutually
distinct. Which are the basic ways of being? Is there a multiplicity?
How is the variety of ways-of-being possible and how is it at
all intelligible, given the meaning of being? How can we speak
at all of a unitary concept of being despite the variety of ways-of-being?
These questions can be consolidated into the problem of the
possible modifications of being and the unity of being's variety.
Every being with which we have any dealings can be addressed and
spoken of by saying "it is" thus and so, regardless
of its specific mode of being. We meet with a being's being in
the understanding of being. It is understanding that first of
all opens up or, as we say, discloses or reveals something like
being. Being is given only in the specific disclosedness that
characterises the understanding of being. But we call the disclosedness
of something truth. That is the proper concept of truth, as it
already begins to dawn in antiquity. Being is given only if there
is disclosure, that is to say, if there is truth. But there is
truth only if a being exists which opens up, which discloses,
and indeed in such a way that disclosure itself belongs to the
mode of being of this being. We ourselves are such a being. The
Dasein Itself exists in the truth. To the Dasein
there belongs essentially a disclosed world and with that the
disclosedness of the Dasein itself. The Dasein,
by the nature of its existence, is "in" truth, and only
because it is "in" truth does it have the possibility
of being "in" untruth. Being is given only if truth,
hence if the Dasein, exists. And only for this reason is
it not merely possible to address beings but within certain limits
sometimes - presupposing that the Dasein exists - necessary.
We shall consolidate these problems of the interconnectedness
between being and truth into the problem of the truth-character
of being (veritas transcendentalis).
We have thus identified four groups of problems that constitute
the content of the second part of the course: the problem of the
ontological difference, the problem of the basic articulation
of being, the problem of the possible modifications of being in
its ways of being, the problem of the truth-character of being.
The four theses treated provisionally in the first part correspond
to these four basic problems. More precisely, looking backward
from the discussion of the basic problems in the second half,
we see that the problems with which we are provisionally occupied
in the first part, following the lead of these theses, are not
accidental but grow out of the inner systematic coherence of the
general problem of being.
§ 5. The character of ontological method
The three basic components of Phenomenological method
Our conduct of the ontological investigation in the first and
second parts opens up for us at the same time a view of the way
in which these phenomenological investigations proceed. This
raises the question of the character of method in ontology. Thus
we come to the third part of the course: the scientific method
of ontology and the idea of phenomenology.
The method of ontology, that is, of philosophy in general, is
distinguished by the fact that ontology has nothing in common
with any method of any of the other sciences, all of which as
positive sciences deal with beings. On the other hand, it is precisely
the analysis of the truth-character of being which shows that
being also is, as it were, based in a being, namely, in the Dasein.
Being is given only if the understanding of being, hence the Dasein,
exists. This being accordingly lays claim to a distinctive priority
in ontological inquiry. It makes itself manifest in all discussions
of the basic problems of ontology and above all in the fundamental
question of the meaning of being in general. The elaboration of
this question and its answer requires a general analytic of the
Dasein. Ontology has for its fundamental discipline the
analytic of the Dasein. This implies at the same time that
ontology cannot be established in a purely ontological manner.
Its possibility is referred back to a being, that is, to something
ontical - the Dasein. Ontology has an ontical foundation,
a fact which is manifest over and over again in the history of
philosophy down to the present. For example, it is expressed as
early as Aristotle's dictum that the first science, the science
of being, is theology. As the work of the freedom of the human
Dasein, the possibilities and destinies of philosophy are
bound up with man's existence, and thus with temporality and with
historicality, and indeed in a more original sense than is any
other science. Consequently, in clarifying the scientific character
of ontology, the first task is the demonstration of its ontical
foundation and the characterisation of this foundation itself.
The second task consists in distinguishing the mode of
knowing operative in ontology as science of being, and this requires
us to work out the methodological structure of ontological-transcendental
differentiation. In early antiquity it was already seen that
being and its attributes in a certain way underlie beings and
precede them and so are a proteron, an earlier. The term denoting
this character by which being precedes beings is the expression
a priori, apriority, being earlier or prior. As
a priori, being is earlier than beings. The meaning of
this a priori, the sense of the earlier and its possibility,
has never been cleared up. The question has not even once been
raised as to why the determinations of being and being itself
must have is character of priority and how such priority is possible.
To be earlier is a determination of time, but it does not pertain
to the temporal order of the time that we measure by the clock;
rather, it is an earlier that belongs to the "inverted world."
Therefore, this earlier which characterises being is taken by
the popular understanding to be the later. Only the interpretation
of being by way of temporality can make clear why and how this
feature of being earlier, apriority, goes together with being.
The a priori character of being and of all the structures
of being accordingly calls for a specific kind of approach and
way of apprehending being - a priori cognition.
The basic components of a priori cognition constitute what
we call phenomenology. Phenomenology is the name for the
method of ontology, that is, of scientific philosophy. Rightly
conceived, phenomenology is the concept of a method. It is therefore
precluded from the start that phenomenology should pronounce any
theses about being which have specific content, thus adopting
a so-called standpoint.
We shall not enter into detail concerning which ideas about phenomenology
are current today, instigated in part by phenomenology itself.
We shall touch briefly on just one example. It has been said that
my work is Catholic phenomenology - presumably because it is
my conviction that thinkers like Thomas Aquinas and Duns Scotus
also understood something of philosophy, perhaps more than the
moderns. But the concept of a Catholic phenomenology is even more
absurd than the concept of a Protestant mathematics. Philosophy
as science of being is fundamentally distinct in method from any
other science. The distinction in method between, say, mathematics
and classical philology is not as great as the difference between
mathematics and philosophy or between philology and philosophy.
The breadth of the difference between philosophy and the positive
sciences, to which mathematics and philology belong, cannot at
all be estimated quantitatively. In ontology, being is supposed
to be grasped and comprehended conceptually by way of the phenomenological
method, in connection with which we may observe that, while phenomenology
certainly arouses lively interest today, what it seeks and aims
at was already vigorously pursued in Western philosophy from the
very beginning.
Being is to be laid hold of and made our theme. Being is always
being of beings and accordingly it becomes accessible at first
only by starting with some being. Here the phenomenological vision
which does the apprehending must indeed direct itself toward a
being, but it has to do so in such a way that the being of this
being is thereby brought out so that it may be possible to mathematise
it. Apprehension of being, ontological investigation, always turns,
at first and necessarily, to some being; but then, in a precise
way, it is led away from that being and led back to its being.
We call this basic component of phenomenological method - the
leading back or reduction of investigative vision from a naively
apprehended being to being phenomenological reduction.
We are thus adopting a central term of Husserl's phenomenology
in its literal wording though not in its substantive intent. For
Husserl the phenomenological reduction, which he worked out
for the first time expressly in the Ideas Toward a Pure Phenomenology
and Phenomenological Philosophy (1913), is the method of leading
phenomenological vision from the natural attitude of the human
being whose life is involved in the world of things and persons
back to the transcendental life of consciousness and its noetic-noematic
experiences, in which objects are constituted as correlates of
consciousness. For us phenomenological reduction means leading
phenomenological vision back from the apprehension of a being,
whatever may be the character of that apprehension, to the understanding
of the being of this being (projecting upon the way it is unconcealed).
Like every other scientific method, phenomenological method grows
and changes due to the progress made precisely with its help into
the subjects under investigation. Scientific method is never a
technique. As soon as it becomes one it has fallen away from its
own proper nature.
Phenomenological reduction as the leading of our vision from beings
to being nevertheless is not the only basic component of phenomenological
method; in fact, it is not even the central component. For this
guidance of vision back from beings to being requires at the same
time that we should bring ourselves forward toward being itself.
Pure aversion from beings is a merely negative methodological
measure which not only needs to be supplemented by a positive
one but expressly requires us to be led toward being; it thus
requires guidance. Being does not become accessible like a being.
We do not simply find it in front of us. As is to be shown, it
must always be brought to view in a free projection. This projecting
of the antecedently given being upon its being and the structures
of its being we call phenomenological construction.
But the method of phenomenology is likewise not exhausted by phenomenological
construction. We have heard that every projection of being occurs
in a reductive recursion from beings. The consideration of being
takes its start from beings. This commencement is obviously always
determined by the factual experience of beings and the range of
possibilities of experience that at any time are peculiar to a
factical Dasein, and hence to the historical situation
of a philosophical investigation. It is not the case that at all
times and for everyone all beings and all specific domains of
beings are accessible in the same way; and, even if beings are
accessible inside the range of experience, the question still
remains whether, within naive and common experience, they are
already suitably understood in their specific mode of being. Because
the Dasein is historical in its own existence, possibilities
of access and modes of interpretation of beings are themselves
diverse, varying in different historical circumstances. A glance
at the history of philosophy shows that many domains of beings
were discovered very early - nature, space, the soul - but that,
nevertheless, they could not yet be comprehended in their specific
being. As early as antiquity a common or average concept of being
came to light, which was employed for the interpretation of all
the beings of the various domains of being and their modes of
being, although their specific being itself, taken expressly in
its structure, was not made into a problem and could not be defined.
Thus Plato saw quite well that the soul, with its logos, is a
being different from sensible being. But he was not in a position
to demarcate the specific mode of being of this being from the
mode of being of any other being or non-being. Instead, for him
as well as for Aristotle and subsequent thinkers down to Hegel,
and all the more so for their successors, all ontological investigations
proceed within an average concept of being in general. Even the
ontological investigation which we are now conducting is determined
by its historical situation and, therewith, by certain possibilities
of approaching beings and by the preceding philosophical tradition.
The store of basic philosophical concepts derived from the philosophical
tradition is still so influential today that this effect of tradition
can hardly be overestimated. It is for this reason that all philosophical
discussion, even the most radical attempt to begin all over again,
is pervaded by traditional concepts and thus by traditional horizons
and traditional angles of approach, which we cannot assume with
unquestionable certainty to have arisen originally and genuinely
from the domain of being and the constitution of being they claim
to comprehend. It is for this reason that there necessarily belongs
to the conceptual interpretation of being and its structures,
that is, to the reductive construction of being, a destruction
- a critical process in which the traditional concepts, which
at first must necessarily be employed, are de-constructed down
to the sources from which they were drawn. Only by means of this
destruction can ontology fully assure itself in a phenomenological
way of the genuine character of its concepts.
These three basic components of phenomenological metho - reduction,
construction, destruction - belong together in their content and
must receive grounding in their mutual pertinence. Construction
in philosophy is necessarily destruction, that is to say, a de-constructing
of traditional concepts carried out in a historical recursion
to the tradition. And this is not a negation of the tradition
or a condemnation of it as worthless; quite the reverse, it signifies
precisely a positive appropriation of tradition. Because destruction
belongs to construction, philosophical cognition is essentially
at the same time, in a certain sense, historical cognition. History
of philosophy, as it is called, belongs to the concept of philosophy
as science, to the concept of phenomenological investigation.
The history of philosophy is not an arbitrary appendage to the
business of teaching philosophy, which provides an occasion for
picking up some convenient and easy theme for passing an examination
or even for just looking around to see how things were in earlier
times. Knowledge of the history of philosophy is intrinsically
unitary on its own account, and the specific mode of historical
cognition in philosophy differs in its object from all other scientific
knowledge of history.
The method of ontology thus delineated makes it possible to characterise
the idea of phenomenology distinctively as the scientific procedure
of philosophy. We therewith gain the possibility of defining the
concept of philosophy more concretely. Thus our considerations
in the third part lead back again to the starting point of the
course.
Further Reading:
Husserl |
Nietzsche |
Jaspers |
Existentialism |
Being & Existence |
Sartre |
Biography
Philosophy Archive @ marxists.org
|
./articles/Husserl-Edmund/https:..www.marxists.org.reference.subject.philosophy.works.ge.husserl | <body>
<p><img src="../../../../../glossary/people/h/pics/husserl.jpg" align="LEFT" hspace="4" vspace="4" border="2" alt="husserl">
</p><p class="title">Edmund Husserl (1937)</p>
<h4>The Crisis of European Sciences</h4>
<hr class="end">
<p class="information">
<span class="info">Source</span>: <em>The Crisis of European Sciences and Transcendental Phenomenology</em> (1954) publ. Northwestern University Press, Evanston, 1970. Sections 22 - 25 and 57 - 68, 53 pages in all.</p>
<hr class="end">
<h2>Part II: Clarification of the Origin of the Modern Opposition between Physicalistic Objectivism and Transcendental Subjectivism. ...</h2>
<a name="22"></a>
<h3>§ 22. Locke's naturalistic-epistemological psychology.</h3>
<p class="fst">
IT IS IN THE EMPIRICIST development, as we know, that the new
psychology, which was required as a correlate to pure natural
science when the latter was separated off, is brought to its first
concrete execution, Thus it is concerned with investigations of
introspective psychology in the field of the soul, which has now
been separated from the body, as well as with physiological and
psychophysical explanations. On the other hand, this psychology
is of service to a theory of knowledge which, compared with the
Cartesian one, is completely new and very differently worked out.
In Locke's great work this is the actual intent from the start.
It offers itself as a new attempt to accomplish precisely what
Descartes's <em>Meditations</em> intended to accomplish: an epistemological
grounding of the objectivity of the objective sciences. The sceptical
posture of this intent is evident from the beginning in questions
like those of the scope, the extent, and the degrees of certainty
of human knowledge. Locke senses nothing of the depths of the
Cartesian <em>epoche</em> [critique] and of the reduction to the
ego. He simply takes over the ego as soul, which becomes acquainted,
in the self-evidence of self-experience, with its inner states,
acts, and capacities. Only what inner self-experience shows, only
our own "ideas," are immediately, self-evidently given.
Everything in the external world is inferred.</p>
<p>
What comes first, then, is the internal-psychological analysis
purely on the basis of the inner experience - whereby use is made,
quite naively, of the experiences of other human beings and of
the conception of self experience as what belongs to me <em>one
human being</em> among human beings; that is, the objective validity
of inferences to others is used; just as, in general, the whole
investigation proceeds as an objective psychological one, indeed
even has recourse to the physiological - when it is precisely
all this objectivity, after all, which is in question.</p>
<p>
The actual problem of Descartes, that of transcending egological
(interpreted as internal-psychological) validities, including
all manners of inference pertaining to the external world, the
question of how these, which are, after all, themselves <em>cogitationes</em>
in the encapsuled soul, are able to justify assertions about extrapsychic
being - these problems disappear in Locke or turn into the problem
of the psychological genesis of the real experiences of validity
or of the faculties belonging to them. That sense-data, extracted
from the arbitrariness of their production, are affections from
the outside and announce bodies in the external world, is not
a problem for him but something taken for granted.</p>
<p>
Especially portentous for future psychology and theory of knowledge
is the fact that Locke makes no use of the Cartesian first introduction
of the <em>cogitatio</em> as <em>cogitatio</em> of <em>cogitata</em>
- that is, intentionality; he does not recognise it as a subject
of investigation (indeed the most authentic subject of the foundation-laying
investigations) . He is blind to the whole distinction. The soul
is something self-contained and real by itself, as is a body;
in naive naturalism the soul is now taken to be like an isolated
space, like a writing tablet, in his famous simile, on which psychic
data come and go. This data-sensationalism, together with the
doctrine of outer and inner sense, dominates psychology and the
theory of knowledge for centuries, even up to the present day;
and in spite of the familiar struggle against "psychic atomism,"
the basic sense of this doctrine does not change. Of course one
speaks quite unavoidably, even in the Lockean terminology, of
perceptions, representations "of" things, or of believing
"in something," willing "something," and the
like. But no consideration is given to the fact that in the perceptions,
in the experiences of consciousness themselves, that of which
we are conscious is included as such - that the perception is
<em>in itself</em> a perception of something, of "this tree."</p>
<p>
How is the life of the soul, which is through and through a life
of consciousness, the intentional life of the ego, which has objects
of which it is conscious, deals with them through knowing, valuing,
etc. - how is it supposed to be seriously investigated if intentionality
is overlooked? How can the problems of reason be attacked at all?
Can they be attacked at all as psychological problems? In the
end, behind the psychological-epistemological problems, do we
not find the problems of the "ego" of the Cartesian
<em>epoche</em>, touched upon but not grasped by Descartes? Perhaps
these are not unimportant questions, which give a direction in
advance to the reader who thinks for himself. In any case they
are an indication of what will become a serious problem in later
parts of this work, or rather will serve as a way to a philosophy
which can really be carried through "without prejudice,"
a philosophy with the most radical grounding in its setting of
problems, in its method, and in work which is systematically accomplished.</p>
<p>
It is also of interest that the Lockean scepticism in respect
to the rational ideal of science, and its limitation of the scope
of the new sciences (which are supposed to retain their validity),
leads to a new sort of agnosticism. It is not that the possibility
of science is completely denied, as in ancient scepticism, although
again unknowable things-in-themselves are assumed. But our human
science depends exclusively on our representations and concept-formations;
by means of these we may, of course, make inferences extending
to what is transcendent; but in principle we cannot obtain actual
representations of the things-in-themselves, representations which
adequately express the proper essence of these things. We have
adequate representations and knowledge only of what is in our
own soul.</p>
<a name="23"></a>
<h3>§ 23. Berkeley. David Hume's psychology as fictionalistic
theory of knowledge: the "bankruptcy" of philosophy
and science.</h3>
<p class="fst">
LOCKE'S NAÏVETÉS and inconsistencies lead to a rapid
further development of his empiricism, which pushes toward a paradoxical
idealism and finally ends in a consummated absurdity. The foundation
continues to be sensationalism and what appears to be obvious,
i.e., that the sole indubitable ground of all knowledge is self-experience
and its realm of immanent data. Starting from here, Berkeley reduces
the bodily things which appear in natural experience to the complexes
of sense-data themselves through which they appear. No inference
is thinkable, according to Berkeley, through which conclusions
could be drawn from these sense-data about anything but other
such data. It could only be inductive inference, i.e., inference
growing out of the association of ideas. Matter existing in itself,
a <em>je ne sais quoi</em>, according to Locke, is for Berkeley
a philosophical invention. It is also significant that at the
same time he dissolves the manner in which rational natural science
builds concepts and transforms it into a sensationalistic critique
of knowledge.</p>
<p>
In this direction, Hume goes on to the end. All categories of
objectivity - the scientific ones through which an objective,
extrapsychic world is thought in scientific life, and the prescientific
ones through which it is thought in everyday life - are fictions.
First come the mathematical concepts: number, magnitude, continuum,
geometrical figure, etc. We would say that they are methodically
necessary idealisations of what is given intuitively. For Hume,
however, they are fictions; and the same is true, accordingly,
of the whole of supposedly apodictic mathematics. The origin of
these fictions can be explained perfectly well psychologically
(i.e., in terms of immanent sensationalism), namely, through the
immanent lawfulness of the associations and the relations between
ideas. But even the categories of the prescientific world, of
the straightforwardly intuited world - those of corporeity (i.e.,
the identity of persisting bodies supposedly found in immediate,
experiencing intuition), as well as the supposedly experienced
identity of the person - are nothing but fictions. We say, for
example, "that" tree over there, and distinguish from
it its changing manners of appearing. But immanently, psychically,
there is nothing there but these "manners of appearing."
These are complexes of data, and again and again other complexes
of data - "bound together," regulated, to be sure, by association,
which explains the illusion of experiencing something identical.
The same is true of the person: an identical "I" is
not a datum but a ceaselessly changing bundle of data. Identity
is a psychological fiction. To the fictions of this sort also
belongs causality, or necessary succession. Immanent experience
exhibits only a <em>post hoc</em>. The <em>propter hoc</em>, the necessity
of the succession, is a fictive misconstruction. Thus, in Hume's
<em>Treatise</em>, the world in general, nature, the universe of
identical bodies, the world of identical persons, and accordingly
also objective science, which knows these in their objective truth,
are transformed into fiction. To be consistent, we must say: reason,
knowledge, including that of true values, of pure ideals of every
sort, including the ethical - all this is fiction. This is indeed,
then, a bankruptcy of objective knowledge. Hume ends up, basically,
in a solipsism. For how could inferences from data to other data
ever reach beyond the immanent sphere? Of course, Hume did not
ask the question, or at least did not say a word, about the status
of the reason - Hume's - which established this theory as truth,
which carried out these analyses of the soul and demonstrated
these laws of association. How do rules of associative ordering
"bind"? Even if we knew about them, would not that knowledge
itself be another datum on the tablet?</p>
<p>
Like all scepticism, all irrationalism, the Humean sort cancels
itself out. Astounding as Hume's genius is, it is the more regrettable
that a correspondingly great philosophical ethos is not joined
with it. This is evident in the fact that Hume takes care, throughout
his whole presentation, blandly to disguise or interpret as harmless
his absurd results, though he does paint a picture (in the final
chapter of Volume I of the <em>Treatise</em>) of the immense embarrassment
in which the consistent theoretical philosopher gets involved.
Instead of taking up the struggle against absurdity, instead of
unmasking those supposedly obvious views upon which this sensationalism,
and psychologism in general, rests, in order to penetrate to a
coherent self-understanding and a genuine theory of knowledge,
he remains in the comfortable and very impressive role of academic
scepticism. Through this attitude he has become the father of
a still effective, unhealthy positivism which hedges before philosophical
abysses, or covers them over on the surface, and comforts itself
with the successes of the positive sciences and their psychologistic
elucidation.</p>
<a name="24"></a>
<h3>§ 24. The genuine philosophical motif hidden in the
absurdity of Hume's scepticism: the shaking of objectivism.</h3>
<p class="fst">
LET US STOP FOR A MOMENT. Why does Hume's <em>Treatise</em> (in
comparison to which the <em>Essay Concerning Human Understanding</em>
is badly watered down) represent such a great historical event?
What happened there? The Cartesian radicalism of presuppositionlessness,
with the goal of tracing genuine scientific knowledge back to
the ultimate sources of validity and of grounding it absolutely
upon them, required reflections directed toward the subject, required
the regression to the knowing ego in his immanence. No matter
how little one may have approved of Descartes's epistemological
procedure, one could no longer escape the necessity of this requirement.
But was it possible to improve upon Descartes's procedure? Was
his goal, that of grounding absolutely the new philosophical rationalism,
still attainable after the sceptical attacks? Speaking in favour
of this from the start was the immense force of discoveries in
mathematics and natural science that were proceeding at breakneck
speed. And so all who themselves took part in these sciences through
research or study were already certain that its truth, its method,
bore the stamp of finality and exemplariness. And now empiricist
scepticism brings to light what was already present in the Cartesian
fundamental investigation but was not worked out, namely, that
all knowledge of the world, the prescientific as well as the scientific,
is an enormous enigma. It was easy to follow Descartes, when he
went back to the apodictic ego, in interpreting the latter as
soul, in taking the primal self-evidence to be the self-evidence
of "inner perception." And what was more plausible than
the way in which Locke illustrated the reality of the detached
soul and the history running its course within it, its internal
genesis, by means of the "white paper" and thus naturalised
this reality? But now, could the "idealism" of Berkeley
and Hume, and finally scepticism with all its absurdity, be avoided?
What a paradox! Nothing could cripple the peculiar force of the
rapidly growing and, in their own accomplishments, unassailable
exact sciences or the belief in their truth. And yet, as soon
as one took into account that they are the accomplishments of
the consciousness of knowing subjects, their self-evidence and
clarity were transformed into incomprehensible absurdity. No offence
was taken if, in Descartes, immanent sensibility engendered pictures
of the world; but in Berkeley this sensibility engendered the
world of bodies itself; and in Hume the entire soul, with its
"impressions" and "ideas," the forces belonging
to it, conceived of by analogy to physical forces, its laws of
association (as parallels to the law of gravity!), engendered
the whole world, the <em>world itself</em>, not merely something
like a picture - though, to be sure, this product was merely a
fiction, a representation put together inwardly which was actually
quite vague. And this is true of the world of the rational sciences
as well as that of <em>experientia vaga</em>.</p>
<p>
Was there not, here, in spite of the absurdity which may have
been due to particular aspects of the presuppositions, a hidden
and unavoidable truth to be felt? Was this not the revelation
of a completely new way of assessing the objectivity of the world
and its whole ontic meaning and, correlatively, that of the objective
sciences, a way which did not attack their own validity but did
attack their philosophical or metaphysical claim, that of absolute
truth? Now at last it was possible and necessary to become aware
of the fact - which had remained completely unconsidered in these
sciences - that the life of consciousness is a life of <em>accomplishment</em>:
the accomplishment, right or wrong, of ontic meaning, even sensibly
intuited meaning, and all the more of scientific meaning. Descartes
had not pondered the fact that, just as the sensible world, that
of everyday life, is the <em>cogitatum</em> of sensing <em>cogitationes</em>,
so the scientific world is the cogitatum of scientific <em>cogitationes</em>;
and he had not noticed the circle in which he was involved when
he presupposed, in his proof of the existence of God, the <em>possibility</em>
of inferences transcending the ego, when this possibility, after
all, was supposed to be established only through this proof. The
thought was quite remote from him that the whole world could itself
be a cogitatum arising out of the universal synthesis of the variously
flowing <em>cogitationes</em> and that, on a higher level, the rational
accomplishment of the scientific <em>cogitationes</em>, built upon
the former ones, could be constitutive of the scientific world.
But was this thought not suggested, now, by Berkeley and Hume
- under the presupposition that the absurdity of their empiricism
lay only in a belief that was <em>supposedly obvious</em>, through
which immanent reason had been driven out in advance? Through
Berkeley's and Hume's revival and radicalisation of the Cartesian
fundamental problem, "dogmatic" objectivism was, from
the point of view of our critical presentation, <em>shaken</em>
to the foundations. This is true not only of the <em>mathematising
objectivism</em>, so inspiring to people of the time, which actually
ascribed to the world itself a mathematical-rational in-itself
(which we copy, so to speak, better and better in our more or
less perfect theories); it was also true of the <em>general objectivism</em>
which had been dominant for millennia.</p>
<a name="25"></a>
<h3>§ 25. The "transcendental" motif in rationalism:
Kant's conception of a transcendental philosophy.</h3>
<p class="fst">
AS IS KNOWN, Hume has a particular place in history also because
of the turn he brought about in the development of Kant's thinking.
Kant himself says, in the much-quoted words, that Hume roused
him from his dogmatic slumbers and gave his investigations in
the field of speculative philosophy a different direction. Was
it, then, the historical mission of Kant to experience the shaking
of objectivism, of which I just spoke, and to undertake in his
transcendental philosophy the solution of the task before which
Hume drew back? The answer must be negative. It is a new sort
of transcendental subjectivism which begins with Kant and changes
into new forms in the systems of German idealism. Kant does not
belong to the development which expands in a continuous line from
Descartes through Locke, and he is not the successor of Hume.
His interpretation of the Humean scepticism and the way in which
he reacts against it are determined by his own provenance in the
Wolffian school. The "revolution of the way of thinking"
motivated by Hume's impulse is not directed against empiricism
but against post-Cartesian rationalism's way of thinking, whose
great consummator was Leibniz and which was given its systematic
textbook-like presentation, its most effective and by far most
convincing form, by Christian Wolff.</p>
<p>
First of all, what is the meaning of the "dogmatism,"
taken quite generally, that Kant uproots? Although the <em>Meditations</em>
continued to have their effect on post-Cartesian philosophy, the
passionate radicalism which drove them was not passed on to Descartes's
successors. They were quite prepared to accept what Descartes
only wished to establish, and found so hard to establish, by inquiring
back into the ultimate source of all knowledge: namely, the absolute
metaphysical validity of the objective sciences, or, taking these
together, of philosophy as the one objective universal science;
or, what comes to the same thing, the right of the knowing ego
to let its rational constructs, in virtue of the self-evidences
occurring in its <em>mens</em>, count as nature with a meaning transcending
this ego. The new conception of the world of bodies, self-enclosed
as nature, and the natural sciences related to them, the correlative
conception of the self-enclosed souls and the task, related to
them, of a new psychology with a rational method according to
the mathematical model - all this had established itself. In every
direction rational philosophy was under construction; of primary
interest were discoveries, theories, the rigour of their inferences,
and correspondingly the general problem of method and its perfection.
Thus knowledge was very much discussed, and from a scientifically
general point of view. This reflection on knowledge, however,
was not <em>transcendental reflection</em> but rather a reflection
on the <em>praxis of knowledge</em> and was thus similar to the
reflection carried out by one who works in any other practical
sphere of interest, the kind which is expressed in the general
propositions of a <em>technology</em>. It is a matter of what we
are accustomed to call logic, though in a traditional, very narrow,
and limited sense. Thus we can say quite correctly (broadening
the meaning): it is a matter of a logic as a theory of norms and
a technology with the fullest universality, to the end of attaining
a universal philosophy.</p>
<p>
The thematic direction was thus twofold: on the one hand, toward
a systematic universe of "logical laws," the theoretical
totality of the truths destined to function as norms for all judgments
which shall be capable of being objectively true - and to this
belongs, in addition to the old formal logic, also arithmetic,
all of pure analytic mathematics, i.e., the <em>mathesis universalis</em>
of Leibniz, and in general everything that is purely <em>a priori</em>.</p>
<p>
On the other hand, the thematic direction was toward general considerations
about those who make judgments as those striving for objective
truth: how they are to make normative use of those laws so that
the self-evidence through which a judgment is certified as objectively
true can appear, and similarly about the ways and temptations
of failure, etc.</p>
<p>
Now clearly, in all the laws which are in the broader sense "logical,"
beginning with the principle of non-contradiction, <em>metaphysical
truth</em> was contained<em> eo ipso</em>. The systematically worked-out
theory of these laws had, of itself, the meaning of a general
ontology. What happened here scientifically was the work of pure
reason operating exclusively with concepts innate in the knowing
soul. That these concepts, that logical laws, that pure rational
lawfulness in general contained metaphysical-objective truth was
"obvious." Occasionally appeal was made to God as a
guarantee, in remembrance of Descartes, with little concern for
the fact that it was rational metaphysics which first had to establish
God's existence.</p>
<p>
Over against the faculty of pure <em>a priori</em> thinking, that
of pure reason, stood that of sensibility, the faculty of outer
and inner experience. The subject, affected in outer experience
from "outside," thereby becomes certain of affecting
objects, but in order to know them in their truth he needs pure
reason, i.e., the system of norms in which reason displays itself,
as the 'logic" for all true knowledge of the objective world.
Such is the typical rationalist conception.</p>
<p>
As for Kant, who had been influenced by empiricist psychology:
Hume had made him sensitive to the fact that between the pure
truths of reason and metaphysical objectivity there remained a
gulf of incomprehensibility, namely, as to how precisely these
truths of reason could really guarantee the knowledge of things.
Even the model rationality of the mathematical natural sciences
was transformed into an enigma. That it owed its rationality,
which was in fact quite indubitable - that is, its method - to
the normative <em>a priori</em> of pure logico-mathematical reason,
and that the latter, in its disciplines, exhibited an unassailable
pure rationality, remained unquestioned. Natural science is, to
be sure, not purely rational insofar as it has need of outer experience,
sensibility; but everything in it that is rational it owes to
pure reason and its setting of norms; only through them can there
be rationalised experience. As for sensibility, on the other hand,
it had generally been assumed that it gives rise to the merely
sensible data, precisely as a result of affection from the outside.
And yet one acted as if the experiential world of the prescientific
man - the world not yet logicised by mathematics - was the world
pre-given by mere sensibility.</p>
<p>
Hume had shown that we naively read causality into this world
and think that we grasp necessary succession in intuition. The
same is true of everything that makes the body of the everyday
surrounding world into an identical thing with identical properties,
relations, etc. ( and Hume had in fact worked this out in detail
in the <em>Treatise</em>, which was unknown to Kant). Data and complexes
of data come and go, but the thing, presumed to be simply experienced
sensibly, is not something sensible which persists through this
alteration. The sensationalist thus declares it to be a fiction.</p>
<p>
He is substituting, <em>we</em> shall say, mere sense-data for perception,
which after all places <em>things</em> (everyday things) before
our eyes. In other words, he overlooks the fact that mere sensibility,
related to mere data of sense, cannot account for objects of experience.
Thus he overlooks the fact that these objects of experience point
to a hidden mental accomplishment and to the problem of what kind
of an accomplishment this can be. From the very start, after all,
it must be a kind which enables the objects of prescientific experience,
through logic, mathematics, mathematical natural science, to be
knowable with objective validity, i.e., with a necessity which
can be accepted by and is binding for everyone.</p>
<p>
But Kant says to himself: undoubtedly things appear, but only
because the sense-data, already brought together in certain ways,
in concealment, through <em>a priori</em> forms, are made logical
in the course of their alteration - without any appeal to reason
as manifested in logic and mathematics, without its being brought
into normative function. Now is this quasi-logical function something
that is psychologically accidental? If we think of it as absent,
can a mathematics, a logic of nature, ever have the possibility
of knowing objects through mere sense-data?</p>
<p>
These are, if I am not mistaken, the inwardly guiding thoughts
of Kant. Kant now undertakes, in fact, to show, through a regressive
procedure, that if common experience is really to be experience
of <em>objects of nature</em>, objects which can really be knowable
with objective truth, i.e., scientifically, in respect to their
being and non-being, their being-such and being-otherwise, then
the intuitively appearing world must already be a construct of
the faculties of "pure intuition" and "pure reason,"
the same faculties that express themselves in explicit thinking
in mathematics and logic.</p>
<p>
In other words, reason has a <em>twofold</em> way of functioning
and showing itself. One way is its systematic self-exposition,
self-revelation in free and pure mathematising, in the practice
of the pure mathematical sciences. Here it presupposes the forming
character of "pure intuition," which belongs to sensibility
itself. The objective result of both faculties is pure mathematics
as theory. The other way is that of reason constantly functioning
in concealment, reason ceaselessly rationalising sense-data and
always having them as already rationalised. Its objective result
is the sensibly intuited world of objects - the empirical presupposition
of all natural-scientific thinking, i.e., the thinking which,
through manifest mathematical reason, consciously gives norms
to the experience of the surrounding world. Like the intuited
world of bodies, the whole world of natural science ( and with
it the dualistic world which can be known scientifically ) is
a subjective construct of our intellect, only the material of
the sense-data arises from a transcendent affection by "things
in themselves." The latter are in principle inaccessible
to objective scientific knowledge. For according to this theory,
man's science, as an accomplishment bound by the interplay of
the subjective faculties "sensibility" and "reason"
(or, as Kant says here, "understanding"), cannot explain
the origin, the "cause," of the factual manifolds of
sense-data. The ultimate presuppositions of the possibility and
actuality of objective knowledge cannot be objectively knowable.</p>
<p>
Whereas natural science had pretended to be a branch of philosophy,
the ultimate science of what is, and had believed itself capable
of knowing, through its rationality, what is in itself, beyond
the subjectivity of the factualities of knowledge, for Kant, now,
<em>objective science</em>, as an accomplishment remaining within
subjectivity, is separated off from his philosophical theory.
The latter, as a theory of the accomplishments necessarily carried
out within subjectivity, and thus as a theory of the possibility
and scope of objective knowledge, reveals the naivete of the supposed
rational philosophy of nature-in-itself.</p>
<p>
We know how this critique is for Kant nevertheless the beginning
of a philosophy in the old sense, for the universe of being, thus
extending even to the <em>rationally</em> unknowable in-itself
- how, under the titles "critique of practical reason"
and "critique of judgment," he not only limits philosophical
claims but also believes he is capable of opening ways toward
the "scientifically" unknowable in-itself. Here we shall
not go into this. What interests us now is - speaking in formal
generality - that Kant, reacting against the data-positivism of
Hume ( as he understands it) outlines a great, systematically
constructed, and <em>in a new way</em> still scientific philosophy
in which the Cartesian turn to conscious subjectivity works itself
out in the form of a transcendental subjectivism.</p>
<p>
Irrespective of the truth of the Kantian philosophy, about which
we need not pass judgment here, we must not pass over the fact
that Hume, as he is understood by Kant, is not the real Hume.</p>
<p>
Kant speaks of the "Humean problem." What is the actual
problem, the one which drives Hume <em>himself</em>? We find it
when we transform Hume's sceptical theory, his total claim, back
into his <em>problem</em>, extending it to those consequences which
do not quite find their complete expression in the theory - although
it is difficult to suppose that a genius with a spirit like Hume's
did not see these consequences, which are not expressly drawn
and not theoretically treated. If we proceed in this way, we find
nothing less than this universal problem:</p>
<p>
How is the <em>naive obviousness</em> of the certainty of the world,
the certainty in which we live - and, what is more, the certainty
of the everyday world as well as that of the sophisticated theoretical
constructions built upon this everyday world - to be made comprehensible?</p>
<p>
What is, in respect to sense and validity, the "objective
world," objectively true being, and also the objective truth
of science, once we have seen universally with Hume (and in respect
to nature even with Berkeley) that "world" is a validity
which has sprung up within subjectivity, indeed - speaking from
my point of view, who am now philosophising - one which has sprung
up within my subjectivity, with all the content it ever counts
as having for me?</p>
<p>
The naivete of speaking about "objectivity" without
ever considering subjectivity as experiencing, knowing, and actually
concretely accomplishing, the <em>naivete</em> of the scientist
of nature or of the world in general, who is blind to the fact
that all the truths he attains as objective truths and the objective
world itself as the substratum of his formulae (the everyday world
of experience as well as the higher-level conceptual world of
knowledge) are his own <em>life-construct</em> developed within
himself - this naivete is naturally no longer possible as soon
as <em>life</em> becomes the point of focus. And must this liberation
not come to anyone who seriously immerses himself in the <em>Treatise</em>
and, after unmasking Hume's naturalistic presuppositions, becomes
conscious of the power of his motivation?</p>
<p>
But how is this most radical subjectivism, which subjectivises
the world itself, comprehensible? The world-enigma in the deepest
and most ultimate sense, the enigma of a world whose being is
being through subjective accomplishment, and this with the self-evidence
that another world cannot be at all conceivable - that, and nothing
else, is <em>Hume's problem</em>.</p>
<p>
Kant, however, for whom, as can easily be seen, so many <em>presuppositions</em>
are "obviously" valid, presuppositions which in the
Humean sense are included within this world-enigma, never penetrated
to the enigma itself. For his set of problems stands on the ground
of the rationalism extending from Descartes through Leibniz to
Wolff.</p>
<p>
In this way, through the problem of rational natural science which
primarily guides and determines Kant's thinking, we seek to make
understandable Kant's position, so difficult to interpret, in
relation to his historical setting. What particularly interests
us now - speaking first in formal generality - is the fact that
in reaction to the Humean data-positivism, which in his fictionalism
gives up philosophy as a science, a great and systematically constructed
scientific philosophy appears for the <em>first time since Descartes</em>
- a philosophy which must be called <em>transcendental subjectivism</em>.</p>
<a name="26"></a>
<h3>§ 26. Preliminary discussion of the concept of the
"transcendental" which guides us here.</h3>
<p class="fst">
I SHOULD LIKE TO NOTE the following right away: the expression
"transcendental philosophy" has been much used since
Kant, even as a general title for universal philosophies whose
concepts are oriented toward those of the Kantian type. I myself
use the word "transcendental"<em> in the broadest sense</em>
for the original motif, discussed in detail above, which through
Descartes confers meaning upon all modern philosophies, the motif
which, in all of them, seeks to come to itself, so to speak -
seeks to attain the genuine and pure form of its task and its
systematic development. It is the motif of inquiring back into
the ultimate source of all the formations of knowledge, the motif
of the knower's reflecting upon himself and his knowing life in
which all the scientific structures that are valid for him occur
purposefully, are stored up as acquisitions, and have become and
continue to become freely available. Working itself out radically,
it is the motif of a universal philosophy which is grounded purely
in this source and thus ultimately grounded. This source bears
the title <em>I-myself</em>, with all of my actual and possible
knowing life and, ultimately, my concrete life in general. The
whole transcendental set of problems circles around the relation
of <em>this</em>, my "I" - the "ego" - to what
it is at first taken for granted to be - my soul - and, again,
around the relation of this ego and my conscious life to the <em>world</em>
of which I am conscious and whose true being I know through my
own cognitive structures.</p>
<p>
Of course this most general concept of the "transcendental"
cannot be supported by documents; it is not to be gained through
the internal exposition and comparison of the individual systems.
Rather, it is a concept acquired by pondering the coherent history
of the entire philosophical modern period: the concept of its
task which is demonstrable only in this way, lying within it as
the driving force of its development, striving forward from vague
<em>dynamis</em> towards its <em>energeia</em>.</p>
<p>
This is only a preliminary indication, which has already been
prepared to a certain extent by our historical analysis up to
this point; our subsequent presentations are to establish the
justification for our kind of "teleological" approach
to history and its methodical function for the definitive construction
of a transcendental philosophy which satisfies its most proper
meaning. This preliminary indication of a radical transcendental
subjectivism will naturally seem strange and arouse scepticism.
I welcome this, if this scepticism bespeaks, not the prior resolve
of rejection, but rather a free withholding of any judgment.</p>
<a name="27"></a>
<h3>§ 27. The philosophy of Kant and his followers seen
from the perspective of our guiding concept of the "transcendental."
The task of taking a critical position.</h3>
<p class="fst">
RETURNING AGAIN TO KANT: his system can certainly be characterised,
in the general sense defined, as one of "transcendental philosophy,"
although it is far from accomplishing a truly radical grounding
of philosophy, the totality of all sciences. Kant never permitted
himself to enter the vast depths of the Cartesian fundamental
investigation, and his own set of problems never caused him to
seek in these depths for ultimate groundings and decisions. Should
I, in the following presentations, succeed - as I hope - in awakening
the insight that a transcendental philosophy is the more genuine,
and better fulfils its vocation as philosophy, the more radical
it is and, finally, that it comes to its actual and true existence,
to its actual and true beginning, only when the philosopher has
penetrated to a clear understanding of himself as the subjectivity
functioning as primal source, we should still have to recognise,
on the other hand, that Kant's philosophy is on the <em>way</em>
to this, that it is in accord with the formal, general sense of
a transcendental philosophy in our definition. It is a philosophy
which, in opposition to prescientific and scientific objectivism,
goes back to knowing subjectivity as the primal locus of all objective
formations of sense and ontic validities, undertakes to understand
the existing world as a structure of sense and validity, and in
this way seeks to set in motion an essentially new type of scientific
attitude and a new type of philosophy. In fact, if we do not count
the negativistic, sceptical philosophy of a Hume, the Kantian
system is the first attempt, and one carried out with impressive
scientific seriousness, at a truly universal transcendental philosophy
meant to be a <em>rigorous science</em> in a sense of scientific
rigour which has only now been discovered and which is the only
genuine sense.</p>
<p>
Something similar holds, we can say in advance, for the great
continuations and revisions of Kantian transcendentalism in the
great systems of German Idealism. They all share the basic conviction
that the objective sciences (no matter how much they, and particularly
the exact sciences, may consider themselves, in virtue of their
obvious theoretical and practical accomplishments, to be in possession
of the only true method and to be treasure houses of ultimate
truths) are not seriously sciences at all, not cognitions ultimately
grounded, i.e., not ultimately, theoretically responsible for
themselves - and that they are not, then, cognitions of what exists
in ultimate truth. This can be accomplished according to German
Idealism only by a transcendental-subjective method and, carried
through as a system, transcendental philosophy. As was already
the case with Kant, the opinion is not that the self-evidence
of the positive-scientific method is an illusion and its accomplishment
an illusory accomplishment but rather that this self-evidence
is itself a problem; that the objective-scientific method rests
upon a never questioned, deeply concealed subjective ground whose
philosophical elucidation will for the first time reveal the true
meaning of the accomplishments of positive science and, correlatively,
the true ontic meaning of the objective world - precisely as
a transcendental-subjective meaning.</p>
<p>
Now in order to be able to understand the position of Kant and
of the systems of transcendental idealism proceeding from him,
within modern philosophy's teleological unity of meaning, and
thus to make progress in our own self-understanding, it is necessary
to critically get closer to the style of Kant's scientific attitude
and to clarify the lack of radicalism we are attacking in his
philosophising. It is with good reason that we pause over Kant,
a significant turning point in modern history. The critique to
be directed against him will reflect back and elucidate all earlier
philosophical history, namely, in respect to the general meaning
of scientific discipline which all earlier philosophies strove
to realize - as the only meaning which lay and could possibly
lie within their spiritual horizon. Precisely in this way a more
profound concept - the most important of all - of "objectivism"
will come to the fore (more important than the one we were able
to define earlier), and with it the genuinely radical meaning
of the opposition between objectivism and transcendentalism.</p>
<p>
Yet, over and above this, the more concrete critical analyses
of the conceptual structures of the Kantian turn, and the contrast
between it and the Cartesian turn, will set in motion our own
concurrent thinking in such a way as to place us, gradually and
of its own accord, before the <em>final turn</em> and the final
decisions. We ourselves shall be drawn into an inner transformation
through which we shall come face to face with, to <em>direct experience</em>
of, the long-felt but constantly concealed dimension of the "transcendental."
The ground of experience, opened up in its infinity, will then
become the fertile soil of a methodical working philosophy, with
the self-evidence, furthermore, that all conceivable philosophical
and scientific problems of the past are to be posed and decided
by starting from this ground.</p>
<hr class="end">
<p class="footer">
Further Reading:<br>
<a href="../../../../../glossary/people/h/u.htm#husserl-edmund" target="_top">Biography</a> |
<a href="../../../../../archive/vygotsky/works/crisis/psycri01.htm" target="_top">Vygotsky</a> |
<a href="../../../../../glossary/terms/e/x.htm#existentialism" target="_top">Existentialism</a> |
<a href="../ge/husserl2.htm">from Part III</a> |
<a href="../en/locke.htm">Locke</a> |
<a href="../ge/dilthey.htm">Dilthey</a> |
<a href="../ge/brentano.htm">Brentano</a> |
<a href="../ge/hilbert.htm">Hilbert</a> |
<a href="../ge/heidegge.htm">Heidegger</a> |
<a href="../ge/schlick.htm">Schlick</a> |
<a href="../ge/carnap.htm">Carnap</a>
</p>
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Edmund Husserl (1937)
The Crisis of European Sciences
Source: The Crisis of European Sciences and Transcendental Phenomenology (1954) publ. Northwestern University Press, Evanston, 1970. Sections 22 - 25 and 57 - 68, 53 pages in all.
Part II: Clarification of the Origin of the Modern Opposition between Physicalistic Objectivism and Transcendental Subjectivism. ...
§ 22. Locke's naturalistic-epistemological psychology.
IT IS IN THE EMPIRICIST development, as we know, that the new
psychology, which was required as a correlate to pure natural
science when the latter was separated off, is brought to its first
concrete execution, Thus it is concerned with investigations of
introspective psychology in the field of the soul, which has now
been separated from the body, as well as with physiological and
psychophysical explanations. On the other hand, this psychology
is of service to a theory of knowledge which, compared with the
Cartesian one, is completely new and very differently worked out.
In Locke's great work this is the actual intent from the start.
It offers itself as a new attempt to accomplish precisely what
Descartes's Meditations intended to accomplish: an epistemological
grounding of the objectivity of the objective sciences. The sceptical
posture of this intent is evident from the beginning in questions
like those of the scope, the extent, and the degrees of certainty
of human knowledge. Locke senses nothing of the depths of the
Cartesian epoche [critique] and of the reduction to the
ego. He simply takes over the ego as soul, which becomes acquainted,
in the self-evidence of self-experience, with its inner states,
acts, and capacities. Only what inner self-experience shows, only
our own "ideas," are immediately, self-evidently given.
Everything in the external world is inferred.
What comes first, then, is the internal-psychological analysis
purely on the basis of the inner experience - whereby use is made,
quite naively, of the experiences of other human beings and of
the conception of self experience as what belongs to me one
human being among human beings; that is, the objective validity
of inferences to others is used; just as, in general, the whole
investigation proceeds as an objective psychological one, indeed
even has recourse to the physiological - when it is precisely
all this objectivity, after all, which is in question.
The actual problem of Descartes, that of transcending egological
(interpreted as internal-psychological) validities, including
all manners of inference pertaining to the external world, the
question of how these, which are, after all, themselves cogitationes
in the encapsuled soul, are able to justify assertions about extrapsychic
being - these problems disappear in Locke or turn into the problem
of the psychological genesis of the real experiences of validity
or of the faculties belonging to them. That sense-data, extracted
from the arbitrariness of their production, are affections from
the outside and announce bodies in the external world, is not
a problem for him but something taken for granted.
Especially portentous for future psychology and theory of knowledge
is the fact that Locke makes no use of the Cartesian first introduction
of the cogitatio as cogitatio of cogitata
- that is, intentionality; he does not recognise it as a subject
of investigation (indeed the most authentic subject of the foundation-laying
investigations) . He is blind to the whole distinction. The soul
is something self-contained and real by itself, as is a body;
in naive naturalism the soul is now taken to be like an isolated
space, like a writing tablet, in his famous simile, on which psychic
data come and go. This data-sensationalism, together with the
doctrine of outer and inner sense, dominates psychology and the
theory of knowledge for centuries, even up to the present day;
and in spite of the familiar struggle against "psychic atomism,"
the basic sense of this doctrine does not change. Of course one
speaks quite unavoidably, even in the Lockean terminology, of
perceptions, representations "of" things, or of believing
"in something," willing "something," and the
like. But no consideration is given to the fact that in the perceptions,
in the experiences of consciousness themselves, that of which
we are conscious is included as such - that the perception is
in itself a perception of something, of "this tree."
How is the life of the soul, which is through and through a life
of consciousness, the intentional life of the ego, which has objects
of which it is conscious, deals with them through knowing, valuing,
etc. - how is it supposed to be seriously investigated if intentionality
is overlooked? How can the problems of reason be attacked at all?
Can they be attacked at all as psychological problems? In the
end, behind the psychological-epistemological problems, do we
not find the problems of the "ego" of the Cartesian
epoche, touched upon but not grasped by Descartes? Perhaps
these are not unimportant questions, which give a direction in
advance to the reader who thinks for himself. In any case they
are an indication of what will become a serious problem in later
parts of this work, or rather will serve as a way to a philosophy
which can really be carried through "without prejudice,"
a philosophy with the most radical grounding in its setting of
problems, in its method, and in work which is systematically accomplished.
It is also of interest that the Lockean scepticism in respect
to the rational ideal of science, and its limitation of the scope
of the new sciences (which are supposed to retain their validity),
leads to a new sort of agnosticism. It is not that the possibility
of science is completely denied, as in ancient scepticism, although
again unknowable things-in-themselves are assumed. But our human
science depends exclusively on our representations and concept-formations;
by means of these we may, of course, make inferences extending
to what is transcendent; but in principle we cannot obtain actual
representations of the things-in-themselves, representations which
adequately express the proper essence of these things. We have
adequate representations and knowledge only of what is in our
own soul.
§ 23. Berkeley. David Hume's psychology as fictionalistic
theory of knowledge: the "bankruptcy" of philosophy
and science.
LOCKE'S NAÏVETÉS and inconsistencies lead to a rapid
further development of his empiricism, which pushes toward a paradoxical
idealism and finally ends in a consummated absurdity. The foundation
continues to be sensationalism and what appears to be obvious,
i.e., that the sole indubitable ground of all knowledge is self-experience
and its realm of immanent data. Starting from here, Berkeley reduces
the bodily things which appear in natural experience to the complexes
of sense-data themselves through which they appear. No inference
is thinkable, according to Berkeley, through which conclusions
could be drawn from these sense-data about anything but other
such data. It could only be inductive inference, i.e., inference
growing out of the association of ideas. Matter existing in itself,
a je ne sais quoi, according to Locke, is for Berkeley
a philosophical invention. It is also significant that at the
same time he dissolves the manner in which rational natural science
builds concepts and transforms it into a sensationalistic critique
of knowledge.
In this direction, Hume goes on to the end. All categories of
objectivity - the scientific ones through which an objective,
extrapsychic world is thought in scientific life, and the prescientific
ones through which it is thought in everyday life - are fictions.
First come the mathematical concepts: number, magnitude, continuum,
geometrical figure, etc. We would say that they are methodically
necessary idealisations of what is given intuitively. For Hume,
however, they are fictions; and the same is true, accordingly,
of the whole of supposedly apodictic mathematics. The origin of
these fictions can be explained perfectly well psychologically
(i.e., in terms of immanent sensationalism), namely, through the
immanent lawfulness of the associations and the relations between
ideas. But even the categories of the prescientific world, of
the straightforwardly intuited world - those of corporeity (i.e.,
the identity of persisting bodies supposedly found in immediate,
experiencing intuition), as well as the supposedly experienced
identity of the person - are nothing but fictions. We say, for
example, "that" tree over there, and distinguish from
it its changing manners of appearing. But immanently, psychically,
there is nothing there but these "manners of appearing."
These are complexes of data, and again and again other complexes
of data - "bound together," regulated, to be sure, by association,
which explains the illusion of experiencing something identical.
The same is true of the person: an identical "I" is
not a datum but a ceaselessly changing bundle of data. Identity
is a psychological fiction. To the fictions of this sort also
belongs causality, or necessary succession. Immanent experience
exhibits only a post hoc. The propter hoc, the necessity
of the succession, is a fictive misconstruction. Thus, in Hume's
Treatise, the world in general, nature, the universe of
identical bodies, the world of identical persons, and accordingly
also objective science, which knows these in their objective truth,
are transformed into fiction. To be consistent, we must say: reason,
knowledge, including that of true values, of pure ideals of every
sort, including the ethical - all this is fiction. This is indeed,
then, a bankruptcy of objective knowledge. Hume ends up, basically,
in a solipsism. For how could inferences from data to other data
ever reach beyond the immanent sphere? Of course, Hume did not
ask the question, or at least did not say a word, about the status
of the reason - Hume's - which established this theory as truth,
which carried out these analyses of the soul and demonstrated
these laws of association. How do rules of associative ordering
"bind"? Even if we knew about them, would not that knowledge
itself be another datum on the tablet?
Like all scepticism, all irrationalism, the Humean sort cancels
itself out. Astounding as Hume's genius is, it is the more regrettable
that a correspondingly great philosophical ethos is not joined
with it. This is evident in the fact that Hume takes care, throughout
his whole presentation, blandly to disguise or interpret as harmless
his absurd results, though he does paint a picture (in the final
chapter of Volume I of the Treatise) of the immense embarrassment
in which the consistent theoretical philosopher gets involved.
Instead of taking up the struggle against absurdity, instead of
unmasking those supposedly obvious views upon which this sensationalism,
and psychologism in general, rests, in order to penetrate to a
coherent self-understanding and a genuine theory of knowledge,
he remains in the comfortable and very impressive role of academic
scepticism. Through this attitude he has become the father of
a still effective, unhealthy positivism which hedges before philosophical
abysses, or covers them over on the surface, and comforts itself
with the successes of the positive sciences and their psychologistic
elucidation.
§ 24. The genuine philosophical motif hidden in the
absurdity of Hume's scepticism: the shaking of objectivism.
LET US STOP FOR A MOMENT. Why does Hume's Treatise (in
comparison to which the Essay Concerning Human Understanding
is badly watered down) represent such a great historical event?
What happened there? The Cartesian radicalism of presuppositionlessness,
with the goal of tracing genuine scientific knowledge back to
the ultimate sources of validity and of grounding it absolutely
upon them, required reflections directed toward the subject, required
the regression to the knowing ego in his immanence. No matter
how little one may have approved of Descartes's epistemological
procedure, one could no longer escape the necessity of this requirement.
But was it possible to improve upon Descartes's procedure? Was
his goal, that of grounding absolutely the new philosophical rationalism,
still attainable after the sceptical attacks? Speaking in favour
of this from the start was the immense force of discoveries in
mathematics and natural science that were proceeding at breakneck
speed. And so all who themselves took part in these sciences through
research or study were already certain that its truth, its method,
bore the stamp of finality and exemplariness. And now empiricist
scepticism brings to light what was already present in the Cartesian
fundamental investigation but was not worked out, namely, that
all knowledge of the world, the prescientific as well as the scientific,
is an enormous enigma. It was easy to follow Descartes, when he
went back to the apodictic ego, in interpreting the latter as
soul, in taking the primal self-evidence to be the self-evidence
of "inner perception." And what was more plausible than
the way in which Locke illustrated the reality of the detached
soul and the history running its course within it, its internal
genesis, by means of the "white paper" and thus naturalised
this reality? But now, could the "idealism" of Berkeley
and Hume, and finally scepticism with all its absurdity, be avoided?
What a paradox! Nothing could cripple the peculiar force of the
rapidly growing and, in their own accomplishments, unassailable
exact sciences or the belief in their truth. And yet, as soon
as one took into account that they are the accomplishments of
the consciousness of knowing subjects, their self-evidence and
clarity were transformed into incomprehensible absurdity. No offence
was taken if, in Descartes, immanent sensibility engendered pictures
of the world; but in Berkeley this sensibility engendered the
world of bodies itself; and in Hume the entire soul, with its
"impressions" and "ideas," the forces belonging
to it, conceived of by analogy to physical forces, its laws of
association (as parallels to the law of gravity!), engendered
the whole world, the world itself, not merely something
like a picture - though, to be sure, this product was merely a
fiction, a representation put together inwardly which was actually
quite vague. And this is true of the world of the rational sciences
as well as that of experientia vaga.
Was there not, here, in spite of the absurdity which may have
been due to particular aspects of the presuppositions, a hidden
and unavoidable truth to be felt? Was this not the revelation
of a completely new way of assessing the objectivity of the world
and its whole ontic meaning and, correlatively, that of the objective
sciences, a way which did not attack their own validity but did
attack their philosophical or metaphysical claim, that of absolute
truth? Now at last it was possible and necessary to become aware
of the fact - which had remained completely unconsidered in these
sciences - that the life of consciousness is a life of accomplishment:
the accomplishment, right or wrong, of ontic meaning, even sensibly
intuited meaning, and all the more of scientific meaning. Descartes
had not pondered the fact that, just as the sensible world, that
of everyday life, is the cogitatum of sensing cogitationes,
so the scientific world is the cogitatum of scientific cogitationes;
and he had not noticed the circle in which he was involved when
he presupposed, in his proof of the existence of God, the possibility
of inferences transcending the ego, when this possibility, after
all, was supposed to be established only through this proof. The
thought was quite remote from him that the whole world could itself
be a cogitatum arising out of the universal synthesis of the variously
flowing cogitationes and that, on a higher level, the rational
accomplishment of the scientific cogitationes, built upon
the former ones, could be constitutive of the scientific world.
But was this thought not suggested, now, by Berkeley and Hume
- under the presupposition that the absurdity of their empiricism
lay only in a belief that was supposedly obvious, through
which immanent reason had been driven out in advance? Through
Berkeley's and Hume's revival and radicalisation of the Cartesian
fundamental problem, "dogmatic" objectivism was, from
the point of view of our critical presentation, shaken
to the foundations. This is true not only of the mathematising
objectivism, so inspiring to people of the time, which actually
ascribed to the world itself a mathematical-rational in-itself
(which we copy, so to speak, better and better in our more or
less perfect theories); it was also true of the general objectivism
which had been dominant for millennia.
§ 25. The "transcendental" motif in rationalism:
Kant's conception of a transcendental philosophy.
AS IS KNOWN, Hume has a particular place in history also because
of the turn he brought about in the development of Kant's thinking.
Kant himself says, in the much-quoted words, that Hume roused
him from his dogmatic slumbers and gave his investigations in
the field of speculative philosophy a different direction. Was
it, then, the historical mission of Kant to experience the shaking
of objectivism, of which I just spoke, and to undertake in his
transcendental philosophy the solution of the task before which
Hume drew back? The answer must be negative. It is a new sort
of transcendental subjectivism which begins with Kant and changes
into new forms in the systems of German idealism. Kant does not
belong to the development which expands in a continuous line from
Descartes through Locke, and he is not the successor of Hume.
His interpretation of the Humean scepticism and the way in which
he reacts against it are determined by his own provenance in the
Wolffian school. The "revolution of the way of thinking"
motivated by Hume's impulse is not directed against empiricism
but against post-Cartesian rationalism's way of thinking, whose
great consummator was Leibniz and which was given its systematic
textbook-like presentation, its most effective and by far most
convincing form, by Christian Wolff.
First of all, what is the meaning of the "dogmatism,"
taken quite generally, that Kant uproots? Although the Meditations
continued to have their effect on post-Cartesian philosophy, the
passionate radicalism which drove them was not passed on to Descartes's
successors. They were quite prepared to accept what Descartes
only wished to establish, and found so hard to establish, by inquiring
back into the ultimate source of all knowledge: namely, the absolute
metaphysical validity of the objective sciences, or, taking these
together, of philosophy as the one objective universal science;
or, what comes to the same thing, the right of the knowing ego
to let its rational constructs, in virtue of the self-evidences
occurring in its mens, count as nature with a meaning transcending
this ego. The new conception of the world of bodies, self-enclosed
as nature, and the natural sciences related to them, the correlative
conception of the self-enclosed souls and the task, related to
them, of a new psychology with a rational method according to
the mathematical model - all this had established itself. In every
direction rational philosophy was under construction; of primary
interest were discoveries, theories, the rigour of their inferences,
and correspondingly the general problem of method and its perfection.
Thus knowledge was very much discussed, and from a scientifically
general point of view. This reflection on knowledge, however,
was not transcendental reflection but rather a reflection
on the praxis of knowledge and was thus similar to the
reflection carried out by one who works in any other practical
sphere of interest, the kind which is expressed in the general
propositions of a technology. It is a matter of what we
are accustomed to call logic, though in a traditional, very narrow,
and limited sense. Thus we can say quite correctly (broadening
the meaning): it is a matter of a logic as a theory of norms and
a technology with the fullest universality, to the end of attaining
a universal philosophy.
The thematic direction was thus twofold: on the one hand, toward
a systematic universe of "logical laws," the theoretical
totality of the truths destined to function as norms for all judgments
which shall be capable of being objectively true - and to this
belongs, in addition to the old formal logic, also arithmetic,
all of pure analytic mathematics, i.e., the mathesis universalis
of Leibniz, and in general everything that is purely a priori.
On the other hand, the thematic direction was toward general considerations
about those who make judgments as those striving for objective
truth: how they are to make normative use of those laws so that
the self-evidence through which a judgment is certified as objectively
true can appear, and similarly about the ways and temptations
of failure, etc.
Now clearly, in all the laws which are in the broader sense "logical,"
beginning with the principle of non-contradiction, metaphysical
truth was contained eo ipso. The systematically worked-out
theory of these laws had, of itself, the meaning of a general
ontology. What happened here scientifically was the work of pure
reason operating exclusively with concepts innate in the knowing
soul. That these concepts, that logical laws, that pure rational
lawfulness in general contained metaphysical-objective truth was
"obvious." Occasionally appeal was made to God as a
guarantee, in remembrance of Descartes, with little concern for
the fact that it was rational metaphysics which first had to establish
God's existence.
Over against the faculty of pure a priori thinking, that
of pure reason, stood that of sensibility, the faculty of outer
and inner experience. The subject, affected in outer experience
from "outside," thereby becomes certain of affecting
objects, but in order to know them in their truth he needs pure
reason, i.e., the system of norms in which reason displays itself,
as the 'logic" for all true knowledge of the objective world.
Such is the typical rationalist conception.
As for Kant, who had been influenced by empiricist psychology:
Hume had made him sensitive to the fact that between the pure
truths of reason and metaphysical objectivity there remained a
gulf of incomprehensibility, namely, as to how precisely these
truths of reason could really guarantee the knowledge of things.
Even the model rationality of the mathematical natural sciences
was transformed into an enigma. That it owed its rationality,
which was in fact quite indubitable - that is, its method - to
the normative a priori of pure logico-mathematical reason,
and that the latter, in its disciplines, exhibited an unassailable
pure rationality, remained unquestioned. Natural science is, to
be sure, not purely rational insofar as it has need of outer experience,
sensibility; but everything in it that is rational it owes to
pure reason and its setting of norms; only through them can there
be rationalised experience. As for sensibility, on the other hand,
it had generally been assumed that it gives rise to the merely
sensible data, precisely as a result of affection from the outside.
And yet one acted as if the experiential world of the prescientific
man - the world not yet logicised by mathematics - was the world
pre-given by mere sensibility.
Hume had shown that we naively read causality into this world
and think that we grasp necessary succession in intuition. The
same is true of everything that makes the body of the everyday
surrounding world into an identical thing with identical properties,
relations, etc. ( and Hume had in fact worked this out in detail
in the Treatise, which was unknown to Kant). Data and complexes
of data come and go, but the thing, presumed to be simply experienced
sensibly, is not something sensible which persists through this
alteration. The sensationalist thus declares it to be a fiction.
He is substituting, we shall say, mere sense-data for perception,
which after all places things (everyday things) before
our eyes. In other words, he overlooks the fact that mere sensibility,
related to mere data of sense, cannot account for objects of experience.
Thus he overlooks the fact that these objects of experience point
to a hidden mental accomplishment and to the problem of what kind
of an accomplishment this can be. From the very start, after all,
it must be a kind which enables the objects of prescientific experience,
through logic, mathematics, mathematical natural science, to be
knowable with objective validity, i.e., with a necessity which
can be accepted by and is binding for everyone.
But Kant says to himself: undoubtedly things appear, but only
because the sense-data, already brought together in certain ways,
in concealment, through a priori forms, are made logical
in the course of their alteration - without any appeal to reason
as manifested in logic and mathematics, without its being brought
into normative function. Now is this quasi-logical function something
that is psychologically accidental? If we think of it as absent,
can a mathematics, a logic of nature, ever have the possibility
of knowing objects through mere sense-data?
These are, if I am not mistaken, the inwardly guiding thoughts
of Kant. Kant now undertakes, in fact, to show, through a regressive
procedure, that if common experience is really to be experience
of objects of nature, objects which can really be knowable
with objective truth, i.e., scientifically, in respect to their
being and non-being, their being-such and being-otherwise, then
the intuitively appearing world must already be a construct of
the faculties of "pure intuition" and "pure reason,"
the same faculties that express themselves in explicit thinking
in mathematics and logic.
In other words, reason has a twofold way of functioning
and showing itself. One way is its systematic self-exposition,
self-revelation in free and pure mathematising, in the practice
of the pure mathematical sciences. Here it presupposes the forming
character of "pure intuition," which belongs to sensibility
itself. The objective result of both faculties is pure mathematics
as theory. The other way is that of reason constantly functioning
in concealment, reason ceaselessly rationalising sense-data and
always having them as already rationalised. Its objective result
is the sensibly intuited world of objects - the empirical presupposition
of all natural-scientific thinking, i.e., the thinking which,
through manifest mathematical reason, consciously gives norms
to the experience of the surrounding world. Like the intuited
world of bodies, the whole world of natural science ( and with
it the dualistic world which can be known scientifically ) is
a subjective construct of our intellect, only the material of
the sense-data arises from a transcendent affection by "things
in themselves." The latter are in principle inaccessible
to objective scientific knowledge. For according to this theory,
man's science, as an accomplishment bound by the interplay of
the subjective faculties "sensibility" and "reason"
(or, as Kant says here, "understanding"), cannot explain
the origin, the "cause," of the factual manifolds of
sense-data. The ultimate presuppositions of the possibility and
actuality of objective knowledge cannot be objectively knowable.
Whereas natural science had pretended to be a branch of philosophy,
the ultimate science of what is, and had believed itself capable
of knowing, through its rationality, what is in itself, beyond
the subjectivity of the factualities of knowledge, for Kant, now,
objective science, as an accomplishment remaining within
subjectivity, is separated off from his philosophical theory.
The latter, as a theory of the accomplishments necessarily carried
out within subjectivity, and thus as a theory of the possibility
and scope of objective knowledge, reveals the naivete of the supposed
rational philosophy of nature-in-itself.
We know how this critique is for Kant nevertheless the beginning
of a philosophy in the old sense, for the universe of being, thus
extending even to the rationally unknowable in-itself
- how, under the titles "critique of practical reason"
and "critique of judgment," he not only limits philosophical
claims but also believes he is capable of opening ways toward
the "scientifically" unknowable in-itself. Here we shall
not go into this. What interests us now is - speaking in formal
generality - that Kant, reacting against the data-positivism of
Hume ( as he understands it) outlines a great, systematically
constructed, and in a new way still scientific philosophy
in which the Cartesian turn to conscious subjectivity works itself
out in the form of a transcendental subjectivism.
Irrespective of the truth of the Kantian philosophy, about which
we need not pass judgment here, we must not pass over the fact
that Hume, as he is understood by Kant, is not the real Hume.
Kant speaks of the "Humean problem." What is the actual
problem, the one which drives Hume himself? We find it
when we transform Hume's sceptical theory, his total claim, back
into his problem, extending it to those consequences which
do not quite find their complete expression in the theory - although
it is difficult to suppose that a genius with a spirit like Hume's
did not see these consequences, which are not expressly drawn
and not theoretically treated. If we proceed in this way, we find
nothing less than this universal problem:
How is the naive obviousness of the certainty of the world,
the certainty in which we live - and, what is more, the certainty
of the everyday world as well as that of the sophisticated theoretical
constructions built upon this everyday world - to be made comprehensible?
What is, in respect to sense and validity, the "objective
world," objectively true being, and also the objective truth
of science, once we have seen universally with Hume (and in respect
to nature even with Berkeley) that "world" is a validity
which has sprung up within subjectivity, indeed - speaking from
my point of view, who am now philosophising - one which has sprung
up within my subjectivity, with all the content it ever counts
as having for me?
The naivete of speaking about "objectivity" without
ever considering subjectivity as experiencing, knowing, and actually
concretely accomplishing, the naivete of the scientist
of nature or of the world in general, who is blind to the fact
that all the truths he attains as objective truths and the objective
world itself as the substratum of his formulae (the everyday world
of experience as well as the higher-level conceptual world of
knowledge) are his own life-construct developed within
himself - this naivete is naturally no longer possible as soon
as life becomes the point of focus. And must this liberation
not come to anyone who seriously immerses himself in the Treatise
and, after unmasking Hume's naturalistic presuppositions, becomes
conscious of the power of his motivation?
But how is this most radical subjectivism, which subjectivises
the world itself, comprehensible? The world-enigma in the deepest
and most ultimate sense, the enigma of a world whose being is
being through subjective accomplishment, and this with the self-evidence
that another world cannot be at all conceivable - that, and nothing
else, is Hume's problem.
Kant, however, for whom, as can easily be seen, so many presuppositions
are "obviously" valid, presuppositions which in the
Humean sense are included within this world-enigma, never penetrated
to the enigma itself. For his set of problems stands on the ground
of the rationalism extending from Descartes through Leibniz to
Wolff.
In this way, through the problem of rational natural science which
primarily guides and determines Kant's thinking, we seek to make
understandable Kant's position, so difficult to interpret, in
relation to his historical setting. What particularly interests
us now - speaking first in formal generality - is the fact that
in reaction to the Humean data-positivism, which in his fictionalism
gives up philosophy as a science, a great and systematically constructed
scientific philosophy appears for the first time since Descartes
- a philosophy which must be called transcendental subjectivism.
§ 26. Preliminary discussion of the concept of the
"transcendental" which guides us here.
I SHOULD LIKE TO NOTE the following right away: the expression
"transcendental philosophy" has been much used since
Kant, even as a general title for universal philosophies whose
concepts are oriented toward those of the Kantian type. I myself
use the word "transcendental" in the broadest sense
for the original motif, discussed in detail above, which through
Descartes confers meaning upon all modern philosophies, the motif
which, in all of them, seeks to come to itself, so to speak -
seeks to attain the genuine and pure form of its task and its
systematic development. It is the motif of inquiring back into
the ultimate source of all the formations of knowledge, the motif
of the knower's reflecting upon himself and his knowing life in
which all the scientific structures that are valid for him occur
purposefully, are stored up as acquisitions, and have become and
continue to become freely available. Working itself out radically,
it is the motif of a universal philosophy which is grounded purely
in this source and thus ultimately grounded. This source bears
the title I-myself, with all of my actual and possible
knowing life and, ultimately, my concrete life in general. The
whole transcendental set of problems circles around the relation
of this, my "I" - the "ego" - to what
it is at first taken for granted to be - my soul - and, again,
around the relation of this ego and my conscious life to the world
of which I am conscious and whose true being I know through my
own cognitive structures.
Of course this most general concept of the "transcendental"
cannot be supported by documents; it is not to be gained through
the internal exposition and comparison of the individual systems.
Rather, it is a concept acquired by pondering the coherent history
of the entire philosophical modern period: the concept of its
task which is demonstrable only in this way, lying within it as
the driving force of its development, striving forward from vague
dynamis towards its energeia.
This is only a preliminary indication, which has already been
prepared to a certain extent by our historical analysis up to
this point; our subsequent presentations are to establish the
justification for our kind of "teleological" approach
to history and its methodical function for the definitive construction
of a transcendental philosophy which satisfies its most proper
meaning. This preliminary indication of a radical transcendental
subjectivism will naturally seem strange and arouse scepticism.
I welcome this, if this scepticism bespeaks, not the prior resolve
of rejection, but rather a free withholding of any judgment.
§ 27. The philosophy of Kant and his followers seen
from the perspective of our guiding concept of the "transcendental."
The task of taking a critical position.
RETURNING AGAIN TO KANT: his system can certainly be characterised,
in the general sense defined, as one of "transcendental philosophy,"
although it is far from accomplishing a truly radical grounding
of philosophy, the totality of all sciences. Kant never permitted
himself to enter the vast depths of the Cartesian fundamental
investigation, and his own set of problems never caused him to
seek in these depths for ultimate groundings and decisions. Should
I, in the following presentations, succeed - as I hope - in awakening
the insight that a transcendental philosophy is the more genuine,
and better fulfils its vocation as philosophy, the more radical
it is and, finally, that it comes to its actual and true existence,
to its actual and true beginning, only when the philosopher has
penetrated to a clear understanding of himself as the subjectivity
functioning as primal source, we should still have to recognise,
on the other hand, that Kant's philosophy is on the way
to this, that it is in accord with the formal, general sense of
a transcendental philosophy in our definition. It is a philosophy
which, in opposition to prescientific and scientific objectivism,
goes back to knowing subjectivity as the primal locus of all objective
formations of sense and ontic validities, undertakes to understand
the existing world as a structure of sense and validity, and in
this way seeks to set in motion an essentially new type of scientific
attitude and a new type of philosophy. In fact, if we do not count
the negativistic, sceptical philosophy of a Hume, the Kantian
system is the first attempt, and one carried out with impressive
scientific seriousness, at a truly universal transcendental philosophy
meant to be a rigorous science in a sense of scientific
rigour which has only now been discovered and which is the only
genuine sense.
Something similar holds, we can say in advance, for the great
continuations and revisions of Kantian transcendentalism in the
great systems of German Idealism. They all share the basic conviction
that the objective sciences (no matter how much they, and particularly
the exact sciences, may consider themselves, in virtue of their
obvious theoretical and practical accomplishments, to be in possession
of the only true method and to be treasure houses of ultimate
truths) are not seriously sciences at all, not cognitions ultimately
grounded, i.e., not ultimately, theoretically responsible for
themselves - and that they are not, then, cognitions of what exists
in ultimate truth. This can be accomplished according to German
Idealism only by a transcendental-subjective method and, carried
through as a system, transcendental philosophy. As was already
the case with Kant, the opinion is not that the self-evidence
of the positive-scientific method is an illusion and its accomplishment
an illusory accomplishment but rather that this self-evidence
is itself a problem; that the objective-scientific method rests
upon a never questioned, deeply concealed subjective ground whose
philosophical elucidation will for the first time reveal the true
meaning of the accomplishments of positive science and, correlatively,
the true ontic meaning of the objective world - precisely as
a transcendental-subjective meaning.
Now in order to be able to understand the position of Kant and
of the systems of transcendental idealism proceeding from him,
within modern philosophy's teleological unity of meaning, and
thus to make progress in our own self-understanding, it is necessary
to critically get closer to the style of Kant's scientific attitude
and to clarify the lack of radicalism we are attacking in his
philosophising. It is with good reason that we pause over Kant,
a significant turning point in modern history. The critique to
be directed against him will reflect back and elucidate all earlier
philosophical history, namely, in respect to the general meaning
of scientific discipline which all earlier philosophies strove
to realize - as the only meaning which lay and could possibly
lie within their spiritual horizon. Precisely in this way a more
profound concept - the most important of all - of "objectivism"
will come to the fore (more important than the one we were able
to define earlier), and with it the genuinely radical meaning
of the opposition between objectivism and transcendentalism.
Yet, over and above this, the more concrete critical analyses
of the conceptual structures of the Kantian turn, and the contrast
between it and the Cartesian turn, will set in motion our own
concurrent thinking in such a way as to place us, gradually and
of its own accord, before the final turn and the final
decisions. We ourselves shall be drawn into an inner transformation
through which we shall come face to face with, to direct experience
of, the long-felt but constantly concealed dimension of the "transcendental."
The ground of experience, opened up in its infinity, will then
become the fertile soil of a methodical working philosophy, with
the self-evidence, furthermore, that all conceivable philosophical
and scientific problems of the past are to be posed and decided
by starting from this ground.
Further Reading:
Biography |
Vygotsky |
Existentialism |
from Part III |
Locke |
Dilthey |
Brentano |
Hilbert |
Heidegger |
Schlick |
Carnap
Philosophy Archive @ marxists.org
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<h2>Fritz Heckert</h2>
<h1>The Election of Delegates to the<br>
German Metal Workers’ Conference</h1>
<h3>(30 August 1923)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1923/v03n58[36]-aug-30-1923-Inprecor-stan.pdf" target="new">Vol. 3 No. 58 [36]</a>, 30 August 1923, pp. 630–631.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2022). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">Up to the time of writing, the following results have been published of. the elections of the Metal Workers’ Union which took place on July 22 and 23, 239 delegates have been elected so far. Of these 116 belong to the opposition and 123 to the reformists. As the Union Conference will consist of a total of 400 delegates, this result is still only partial. But even this partial result already shows two things. Firstly, that the workers are beginning to take an ever growing interest in the conferences of their organizations. Never before has there been such extensive participation in the elections, either in the history of the metal workers’ organization or in that of the other trade union organizations of Germany. Almost everywhere there has been a 50% participation in the elections, and in many cases, even more than 50% of the members took part. At former elections to the Metal Workers’ Conference and to other trade union congresses only very small numbers of members could be induced to approach the ballot box. It was no rarity for only 5 to 10 per cent of the members to take part in the elections. At the election to the Trade Union Congress in the year 1919, a considerable number of the delegates were elected by the votes of onlv 2% and less of the members. The enormous participation of this year is due to the tremendous work of enlightenment which the communist fractious have performed of recent years. The German worker has thus been given a greater interest in the life of his organization, and even the Amsterdamers have found it necessary to occupy themselves somewhat energetically with the mobilization of the trade union members, in order to maintain their position. This rousing of the masses of members is regarded with extreme disfavor by the reformist trade union leaders. The workers now taking part in the active life of the meetings, and casting their votes against the reformist policy, are designated by the Amsterdamers as cranks, grumblers, fools, chatterboxes, etc. The reformists do not observe that they are lowering the whole trade union movement in the eves of the public by such railing against their members. And there is no doubt that the reformists would be delighted to witness this mass participation of the trade union members in the meetings, etc., if these masses would give unanimous assent to reformist methods. But in this respect the reformists have become unassuming. The fewer the members taking part in trade union activities, the better they are pleased. Indeed, a leading German trade union organ informed its readers, in the spring of this year, that the extremely poor attendance at the trade union meetings convened by the reform st officialdom was “no sign of mistrust of reformism on the part of the members, but a manifestation of confidence. The absent members show by their absence that they possess full confidence in the reformist leaders.”</p>
<p>Secondly, the results of the elections to the Metal Workers’ Union Conference show an enormous increase in the opposition votes, cast for the communist lists. Although the reformists have not everywhere met with such annihilating defeat as in Berlin (here the opposition list received 54,000 votes, while the reformists, though controlling the whole union apparatus, only managed to obtain 22,000) and in Westphalia, the advance made by the opposition is none the less so mighty that every reformist must give it his serious consideration.</p>
<p>Even though the number of opposition mandates will probably fall short of half the total of 400 mandates composing the Union Conference, it is even now almost certain that the majority of all the votes cast will fall to the opposition. In any case this is very largely true of the results already reported. How can we explain this? The ruling union officialdom has contrived to introduce a geometry of electorates and such methods of arranging the candidates, that the bosses of the union gain the majorities, even when the overwhelming majority of their members’ votes is registered against them. The candidates are generally nominated at delegate meetings; these delegates have the right to set up two lists, a majority and a minority list. The minority list must unite at least 10% of the votes of the delegates present at the meeting. On the face of it, this seems an extremely democratic arrangement, but as soon as we observe the constitution of the delegate meetings, we see that it is a most ingenious artifice for killing off the opposition from the very beginning. Let us take an example in the administrative headquarters at Dortmund, in Westphalia. The delegate meeting was elected in the spring of 1923 by a number of district meetings, as a matter of fact after a list election. (The Executive of the German Metal Workers’ Union has rejected proportional representation on principle.) At this election it turned out that the communists united in their lists 40% of the votes cast everywhere, but nowhere 50%. The whole of the mandates to the delegate meeting therefore fell to the social democrats. Thus when the candidates were being nominated at the delegate meeting, no communist list could be submitted. The result was that the four delegates to be elected for Dortmund were nominated and elected by the United Social Democratic Party of Germany only, while a communist list, had one existed, would have received the overwhelming majority of votes, as was the case in the other Rhenish-Westphalian towns. Another example of electorate geometry. The Union constitution enacts that there shall be one delegate to every 4,000 members. Several administrative head quarters can be amalgamated to form one electoral district. In order to ensure a favorable result for the reformists, the administrations of Altenburg with 3,223 members, Jena with 3,225, and Schmalkaden with 3,533, were combined in Thuringia into one electoral district entitled to 3 delegates. The reformists speculated on the fact that Altenburg is a stronghold oi reformism, and was likely to yield such a surplus of rrformist votes that the victory over Jena and Schmalkaden would be assured, whereas, had each administration elected its own delegate, Jena and Schmalkaden would have fallen to the opposition And a third example will show how still other means may be employed to manufacture favorable results for reformism. In Pforzheim 6 delegates have to be elected. The reformist local administration called the meeting at which the candidates were to be nominated, but not till the day before, and without stating the business of the meeting. (This is against the constitution, but the constitution is only valid for the reformists when it can be used against the communists.) The reformists set the whole of their official machinery to work before this meeting, settled the candidates, and took the members completely by surprise by suddenly placing the nomination of candidates to the Union Conference on the agenda. This manoeuvre enabled them to prevent an opposition list from being submitted.</p>
<p>But however cunning the artifices with which reformism strives to save its position, in the German Metal Workers’ Union as everywhere else, the election results show that these methods will not work for ever, and that these artifices, this ignoring of all democracy in the organization, will end in such tremendous defeats as that of Berlin. The reformists feel that their position is threatened, and therefore they are doing their utmost to hide their defeat, or to cover it by savage agitation against the opposition. They declare quite openly that they would not submit to an opposition majority, and are adopting means for stemming the advance of the opposition. They refuse to grasp the fact that the results of the elections are a condemnation of their polity, and continue their efforts to suppress the opinions of others – even at the risk of destroying the organization – by setting up a ruthless bureaucratic dictatorship. To those who have eyes to see, the results, of the elections in the metal workers’ organization show that no artifice and no dictatorship on the part of reformist trade union officialdom can hinder the advance and the victory of the revolutionary idea.</p>
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MIA > Archive > Fritz Heckert
Fritz Heckert
The Election of Delegates to the
German Metal Workers’ Conference
(30 August 1923)
From International Press Correspondence, Vol. 3 No. 58 [36], 30 August 1923, pp. 630–631.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2022). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
Up to the time of writing, the following results have been published of. the elections of the Metal Workers’ Union which took place on July 22 and 23, 239 delegates have been elected so far. Of these 116 belong to the opposition and 123 to the reformists. As the Union Conference will consist of a total of 400 delegates, this result is still only partial. But even this partial result already shows two things. Firstly, that the workers are beginning to take an ever growing interest in the conferences of their organizations. Never before has there been such extensive participation in the elections, either in the history of the metal workers’ organization or in that of the other trade union organizations of Germany. Almost everywhere there has been a 50% participation in the elections, and in many cases, even more than 50% of the members took part. At former elections to the Metal Workers’ Conference and to other trade union congresses only very small numbers of members could be induced to approach the ballot box. It was no rarity for only 5 to 10 per cent of the members to take part in the elections. At the election to the Trade Union Congress in the year 1919, a considerable number of the delegates were elected by the votes of onlv 2% and less of the members. The enormous participation of this year is due to the tremendous work of enlightenment which the communist fractious have performed of recent years. The German worker has thus been given a greater interest in the life of his organization, and even the Amsterdamers have found it necessary to occupy themselves somewhat energetically with the mobilization of the trade union members, in order to maintain their position. This rousing of the masses of members is regarded with extreme disfavor by the reformist trade union leaders. The workers now taking part in the active life of the meetings, and casting their votes against the reformist policy, are designated by the Amsterdamers as cranks, grumblers, fools, chatterboxes, etc. The reformists do not observe that they are lowering the whole trade union movement in the eves of the public by such railing against their members. And there is no doubt that the reformists would be delighted to witness this mass participation of the trade union members in the meetings, etc., if these masses would give unanimous assent to reformist methods. But in this respect the reformists have become unassuming. The fewer the members taking part in trade union activities, the better they are pleased. Indeed, a leading German trade union organ informed its readers, in the spring of this year, that the extremely poor attendance at the trade union meetings convened by the reform st officialdom was “no sign of mistrust of reformism on the part of the members, but a manifestation of confidence. The absent members show by their absence that they possess full confidence in the reformist leaders.”
Secondly, the results of the elections to the Metal Workers’ Union Conference show an enormous increase in the opposition votes, cast for the communist lists. Although the reformists have not everywhere met with such annihilating defeat as in Berlin (here the opposition list received 54,000 votes, while the reformists, though controlling the whole union apparatus, only managed to obtain 22,000) and in Westphalia, the advance made by the opposition is none the less so mighty that every reformist must give it his serious consideration.
Even though the number of opposition mandates will probably fall short of half the total of 400 mandates composing the Union Conference, it is even now almost certain that the majority of all the votes cast will fall to the opposition. In any case this is very largely true of the results already reported. How can we explain this? The ruling union officialdom has contrived to introduce a geometry of electorates and such methods of arranging the candidates, that the bosses of the union gain the majorities, even when the overwhelming majority of their members’ votes is registered against them. The candidates are generally nominated at delegate meetings; these delegates have the right to set up two lists, a majority and a minority list. The minority list must unite at least 10% of the votes of the delegates present at the meeting. On the face of it, this seems an extremely democratic arrangement, but as soon as we observe the constitution of the delegate meetings, we see that it is a most ingenious artifice for killing off the opposition from the very beginning. Let us take an example in the administrative headquarters at Dortmund, in Westphalia. The delegate meeting was elected in the spring of 1923 by a number of district meetings, as a matter of fact after a list election. (The Executive of the German Metal Workers’ Union has rejected proportional representation on principle.) At this election it turned out that the communists united in their lists 40% of the votes cast everywhere, but nowhere 50%. The whole of the mandates to the delegate meeting therefore fell to the social democrats. Thus when the candidates were being nominated at the delegate meeting, no communist list could be submitted. The result was that the four delegates to be elected for Dortmund were nominated and elected by the United Social Democratic Party of Germany only, while a communist list, had one existed, would have received the overwhelming majority of votes, as was the case in the other Rhenish-Westphalian towns. Another example of electorate geometry. The Union constitution enacts that there shall be one delegate to every 4,000 members. Several administrative head quarters can be amalgamated to form one electoral district. In order to ensure a favorable result for the reformists, the administrations of Altenburg with 3,223 members, Jena with 3,225, and Schmalkaden with 3,533, were combined in Thuringia into one electoral district entitled to 3 delegates. The reformists speculated on the fact that Altenburg is a stronghold oi reformism, and was likely to yield such a surplus of rrformist votes that the victory over Jena and Schmalkaden would be assured, whereas, had each administration elected its own delegate, Jena and Schmalkaden would have fallen to the opposition And a third example will show how still other means may be employed to manufacture favorable results for reformism. In Pforzheim 6 delegates have to be elected. The reformist local administration called the meeting at which the candidates were to be nominated, but not till the day before, and without stating the business of the meeting. (This is against the constitution, but the constitution is only valid for the reformists when it can be used against the communists.) The reformists set the whole of their official machinery to work before this meeting, settled the candidates, and took the members completely by surprise by suddenly placing the nomination of candidates to the Union Conference on the agenda. This manoeuvre enabled them to prevent an opposition list from being submitted.
But however cunning the artifices with which reformism strives to save its position, in the German Metal Workers’ Union as everywhere else, the election results show that these methods will not work for ever, and that these artifices, this ignoring of all democracy in the organization, will end in such tremendous defeats as that of Berlin. The reformists feel that their position is threatened, and therefore they are doing their utmost to hide their defeat, or to cover it by savage agitation against the opposition. They declare quite openly that they would not submit to an opposition majority, and are adopting means for stemming the advance of the opposition. They refuse to grasp the fact that the results of the elections are a condemnation of their polity, and continue their efforts to suppress the opinions of others – even at the risk of destroying the organization – by setting up a ruthless bureaucratic dictatorship. To those who have eyes to see, the results, of the elections in the metal workers’ organization show that no artifice and no dictatorship on the part of reformist trade union officialdom can hinder the advance and the victory of the revolutionary idea.
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<h2>Fritz Heckert</h2>
<h4>The Labor Movement</h4>
<h1>The German Trade Unions<br>
from Nürnberg to Leipzig</h1>
<h3>(1 September 1922)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1922/v02n075-sep-01-1922-Inprecor.pdf" target="new">Vol. 2 No. 75</a>, 1 September 1922, pp. 561–563.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2020). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<h4>I. From Nürnberg to Halle</h4>
<p class="fst">If we stop to survey the period of the German trade union movement between the two trade-union congresses at Nürnberg in 1919 and at Leipzig in 1922. we note a development that is of great importance to the trade union movement throughout the world.</p>
<p>In the early summer of 1919, the German Revolution had again shaken both the whole state organism and the economic structure of the country. Large sections of German labor were of the opinion that by immediate direct action they could shift both the economic and political balance of power. And especially the battles carried on under the direct supervision of the shop stewards, without the workers referring the matter to the union officials, gave rise to the opinion that the tendencies working for revolutionary activity of the German trade unions (instead of the reformist attitude) would soon gain the upper hand. The social-patriotic, reformist attitude of the trade union officialdom and the complete abandonment of the principles of class struggle during the war and the first months of the revolution, had combined to create a sharp, rapidly growing opposition. Nearly two fifths of all delegates to the Nürnberg trade-union congress were radical elements believing that they had the backing of the majority of organized labor and that only by employing devious tricks could the bureaucracy secure for itself a nominal majority.</p>
<p>The central problem, <em>labor industrial truce</em> or <em>class struggle</em>, was already more or less clearly formulated, in Nürnberg. Many workers had been sorely disappointed by the truce policy during the war, and by its peace edition, – the policy of collaboration. They were determined that labor’s organized forces, the trade-unions, be employed for creating guarantees safeguarding labor against any renewal of the economic and political dictatorship of the bourgeoisie. The trade-unions had assumed formidable proportions; they comprised then 5,400,000 workers, and were adding tens of thousands every week to their membership.</p>
<p>This rapidly growing mass of organized workers brought two tendencies into the trade union movement. First, that of making the shop steward committees into militant organs of the workers, and secondly, that of reshaping, the craft unions into industrial unions, which were considered better weapons in the tremendous economic struggles. Even if the revolutionary wing of the trade union movement did not carry the day at the Nürnberg Congress, there was reason to hope that the final victory would only be a matter of months. The majority of the 191 opposition delegates belonged politically to the Independent Social Democratic Party (USP); only 7 were members of the Communist Party. The USP was at that time developing towards the left, a strong mass party counting its adherents chiefly among the industrial proletariat.</p>
<p>The following year witnessed the increase of the total trade union membership to 7,890,000. But the revolutionary spirit did not keep pace with this growth. And although the general trade union opposition gained another victory at the metal workers’ congress (in the summer of that year, when the oppostion led by the USP. gained the majority and thus the union) there was no gainsaying the fact that the reactionary attitude of the trade-union bureaucracy was not effected by the penetration into it of the opposition. Rather the opposite took place. A part of the metal workers’ opposition, which under the slogan, <em>Against Collaboration and for the Class Struggle</em> had carried on the fight for the union, fell down on its slogan and at the shop-stewards’ congress, in October, we saw the Independent metal workers’ leader, <em>Dissmann</em>, fight the resolute opposition side by side with that hardened reformist, <em>Legien</em>. Prior to that congress, the whole opposition had considered the shop steward committees as independent factors and cooperators in the economic struggles of the workers, but the congress itself sealed the fate of the Committees and subordinated them to the trade union bureaucracy as its auxiliary organs. The split within the opposition and the march of the opposition bureaucracy towards the Right and into the Legien camp, coincided with the split of the USP and the fusion of its left wing with the Communist Party.<br>
</p>
<h4>II. The Victory of the Trade Union Bureaucracy. Its Achievements</h4>
<p class="fst">The split of the opposition resulted for the time being, in a strengthening of the reformist ADGB. (General German Trade Union Federation) bureaucracy, and in a weakening of the revolutionary struggle in the trade unions. The opposition had to regain its bearings and to reconsider its aims and tasks; it recognized the urgency of close unity everywhere, and fully grasped the fact that a long-drawn and embittered struggle for the sympathies of the membership would have to precede any attempt at compelling the reformist bureaucracy to retire from their position. The opposition nuclei forming everywhere in the trade unions soon became the target of the trade union leaders, who launched a savage campaign against the opposition groups, the chief weapon being the expulsion of the opposition leaders from the trade unions. The reformist bureaucracy fully believed that by this policy of persecution and expulsion they could stamp out the opposition and thus render their own position impregnable. Brutal measures were employed especially by the officials of the builders’, railwaymen’s and agricultural workers’ unions. The latter did not even desist from disrupting the organization in large districts, as long as the opposition was crushed thereby.</p>
<p>The situation which the trade-union bureaucracy was landed into by its policy of collaboration, compels it to fight the opposition. No matter what it does or thinks, its foremost aim is to avoid serious conflicts with the bourgeoisie. Out of such considerations it accepted the terms of the Versailles Treaty and pledged itself to exert all its energy for their fulfilment. And just as it submitted to the bourgeoisie in matters of foreign policy, it abandoned at home all the demands of the workers, whenever it became apparent that the bourgeoisie was seriously determined to fight.</p>
<p>Germany’s economic collapse and the subsequent political convulsions, often gave the bureaucracy opportunity to parade as labor’s leader. The first of these was the <em>Kapp-Putsch</em>. When the working class had crushed the rebellious military camarilla, ana was getting ready to grasp the fruits of victory, the ADGB concluded with the government and the counter-revolution the widely known <em>Bielefeld Agreement</em>, pledging itself to use all its forces to break off the victorious struggle of labor. The latter was told that the ADGB guaranteed the fulfillment of the 8 points of the agreement which would provide a real protection for the workers. After the workers were once disarmed, however, the ADGB never dreamt of redeeming its promises to labor.</p>
<p>The same tactics were employed by the ADGB in the struggle carried on by the unemployed to secure their existence in spring 1921. In order to prevent a serious movement, the ADGB formulated ten demands, not one of which was ever complied with. In the autumn of the same year, the mark had sunk to such depths as to endanger seriously the standard of living of the German worker. Again the ADGB entered the political arena with a new series of ten demands coupled with the declaration that unless these demands were complied with, both labor and the economic household would be ruined completely. The first of these demands was the confiscation of 25 per cent of all gold values. The working class, which put its trust into the ADGB, was again sorely disappointed, for nothing whatever was done to enforce those demands.</p>
<p>But the policy of collaboration with the bourgeoisie, which the ADGB refused to abandon, and which had compelled it to sabotage the Bielefeld Agreement, the unemployment demands and the demand for the confiscation of 25 per cent of all gold values, was also at the bottom of its cynical betrayal of the railway officials in the Spring of 1922, and its union with all those who openly advocated the use of armed force against the railwaymen whom unbearable economic pressure had forced to strike. The betrayal of the struggling workers was so base and so enraged the workers, that their spirit of solidarity urged them to side with the strikers and they rebelled against the ADGB.</p>
<p>The ADGB’s policy of cooperation roused great indignation in the ranks of organized labor. This indignation is unfortunately being expressed by the workers turning their backs on trade unions. The number of organized workers has decreased considerably, during 1921, and the tendency to leave the trade unions is still prevalent. The reason for this, as advanced by the ADGB, was that hundreds of thousands of newly organized members being slow to grasp the advantages of trade unions, had left dissatisfied, while others had been repelled by the inciting activities of the Communists. A third reason given for the decrease is the bad economic situation.</p>
<p>To all of which we have the following reply. Firstly unemployment is practically negligible in Germany today; there is even less of it than before the war; such periods have always been noted as favorable for organization. Secondly, wherever and whenever Communist work was successful in the trade unions, there was the least decrease of membership to be noted. Thirdly, the decrease of membership is proportionate to the increase of the aggressiveness of the bourgeoisie, the partner of the trade union bureaucracy. This is made quite clear by the market decrease after the assassination of Rathenau, when the trade union bureaucracy, by steering into shallow waters the struggle against the reaction, which the workers had taken up with so much energy, became a party to the resurrection of reaction.</p>
<p>In all other economic and social questions, the reformist trade union leaders have also failed miserably. In order to preserve cooperation, they yielded to the employers in the matter of the workers’ rights and social institutions, and were even in part ready to sacrifice the eight-hour day. The shop steward committees have been shorn of their power to a greater extent than even the employers had intended to.<br>
</p>
<h4>III. The Leipzig Trade Union Congress and Our Prospects</h4>
<p class="fst">At the trade union congress in Leipzig, the ADGB had to account for its policy, and German organized labor has drawn the conclusions. Wherever the opposition secured a footing it routed the reformist collaborators. Even if only 90 of the 700 delegates at the congress belonged to the Communist opposition, there can be no doubt that these 90 had the backing of 35 to 40 per cent of German organized labor. Only by various manipulations did the bureaucracy succeed in securing a big majority. But although the opposition at Nürnberg had reason to hope that victory would be theirs, and the old bureaucracy had to prepare for the worst, the latter was nevertheless better able to defend itself and to maintain its position in Nürnberg than in Leipzig, where the managing committee of the ADGB, in spite of its SPD majority, was defeated on all points. Only in mere routine matters could the bureaucracy count on the support of the majority; in the voting on the questions of collaboration, industrial unions, and other important matters, the majority was either against the ADGB or it was so composed as to render the continuation of the old policy impossible.</p>
<p>During the last three years, Germany’s economic situation has been growing from bad to worse, and even the most backward workers are beginning to understand that collaboration, leads to abject misery, and that other ways and means must be found to safeguard labor’s existence.</p>
<p>Prompted by these and similar considerations, the organized workers are massing on the left, confiding more and more in the Communist leaders and refusing to tolerate any longer the persecution of Communists.</p>
<p>The ADGB has learned nothing whatever since Nürnberg. In the days of labor’s direst privation it was still aiding the bourgeoisie, and no outbursts of indignation on the part of the membership could move it to abandon that policy. Having sacrificed its demands after the Rathenau murder, it now steps forth and declares boldly; our principal task is to oppose the Communists. This, in a period of capitalist aggression, at a time when the sudden rise of prices, when reaction rears its head once more! The next few months will convince the ADGB that <em>the workers have other matters to look after: to organize themselves against the bourgeoisie and all those in league with it.</em> The campaign against the Communist opposition will end with the defeat of the trade union bureaucracy. That is the balance of Leipzig!</p>
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MIA > Archive > Fritz Heckert
Fritz Heckert
The Labor Movement
The German Trade Unions
from Nürnberg to Leipzig
(1 September 1922)
From International Press Correspondence, Vol. 2 No. 75, 1 September 1922, pp. 561–563.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2020). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
I. From Nürnberg to Halle
If we stop to survey the period of the German trade union movement between the two trade-union congresses at Nürnberg in 1919 and at Leipzig in 1922. we note a development that is of great importance to the trade union movement throughout the world.
In the early summer of 1919, the German Revolution had again shaken both the whole state organism and the economic structure of the country. Large sections of German labor were of the opinion that by immediate direct action they could shift both the economic and political balance of power. And especially the battles carried on under the direct supervision of the shop stewards, without the workers referring the matter to the union officials, gave rise to the opinion that the tendencies working for revolutionary activity of the German trade unions (instead of the reformist attitude) would soon gain the upper hand. The social-patriotic, reformist attitude of the trade union officialdom and the complete abandonment of the principles of class struggle during the war and the first months of the revolution, had combined to create a sharp, rapidly growing opposition. Nearly two fifths of all delegates to the Nürnberg trade-union congress were radical elements believing that they had the backing of the majority of organized labor and that only by employing devious tricks could the bureaucracy secure for itself a nominal majority.
The central problem, labor industrial truce or class struggle, was already more or less clearly formulated, in Nürnberg. Many workers had been sorely disappointed by the truce policy during the war, and by its peace edition, – the policy of collaboration. They were determined that labor’s organized forces, the trade-unions, be employed for creating guarantees safeguarding labor against any renewal of the economic and political dictatorship of the bourgeoisie. The trade-unions had assumed formidable proportions; they comprised then 5,400,000 workers, and were adding tens of thousands every week to their membership.
This rapidly growing mass of organized workers brought two tendencies into the trade union movement. First, that of making the shop steward committees into militant organs of the workers, and secondly, that of reshaping, the craft unions into industrial unions, which were considered better weapons in the tremendous economic struggles. Even if the revolutionary wing of the trade union movement did not carry the day at the Nürnberg Congress, there was reason to hope that the final victory would only be a matter of months. The majority of the 191 opposition delegates belonged politically to the Independent Social Democratic Party (USP); only 7 were members of the Communist Party. The USP was at that time developing towards the left, a strong mass party counting its adherents chiefly among the industrial proletariat.
The following year witnessed the increase of the total trade union membership to 7,890,000. But the revolutionary spirit did not keep pace with this growth. And although the general trade union opposition gained another victory at the metal workers’ congress (in the summer of that year, when the oppostion led by the USP. gained the majority and thus the union) there was no gainsaying the fact that the reactionary attitude of the trade-union bureaucracy was not effected by the penetration into it of the opposition. Rather the opposite took place. A part of the metal workers’ opposition, which under the slogan, Against Collaboration and for the Class Struggle had carried on the fight for the union, fell down on its slogan and at the shop-stewards’ congress, in October, we saw the Independent metal workers’ leader, Dissmann, fight the resolute opposition side by side with that hardened reformist, Legien. Prior to that congress, the whole opposition had considered the shop steward committees as independent factors and cooperators in the economic struggles of the workers, but the congress itself sealed the fate of the Committees and subordinated them to the trade union bureaucracy as its auxiliary organs. The split within the opposition and the march of the opposition bureaucracy towards the Right and into the Legien camp, coincided with the split of the USP and the fusion of its left wing with the Communist Party.
II. The Victory of the Trade Union Bureaucracy. Its Achievements
The split of the opposition resulted for the time being, in a strengthening of the reformist ADGB. (General German Trade Union Federation) bureaucracy, and in a weakening of the revolutionary struggle in the trade unions. The opposition had to regain its bearings and to reconsider its aims and tasks; it recognized the urgency of close unity everywhere, and fully grasped the fact that a long-drawn and embittered struggle for the sympathies of the membership would have to precede any attempt at compelling the reformist bureaucracy to retire from their position. The opposition nuclei forming everywhere in the trade unions soon became the target of the trade union leaders, who launched a savage campaign against the opposition groups, the chief weapon being the expulsion of the opposition leaders from the trade unions. The reformist bureaucracy fully believed that by this policy of persecution and expulsion they could stamp out the opposition and thus render their own position impregnable. Brutal measures were employed especially by the officials of the builders’, railwaymen’s and agricultural workers’ unions. The latter did not even desist from disrupting the organization in large districts, as long as the opposition was crushed thereby.
The situation which the trade-union bureaucracy was landed into by its policy of collaboration, compels it to fight the opposition. No matter what it does or thinks, its foremost aim is to avoid serious conflicts with the bourgeoisie. Out of such considerations it accepted the terms of the Versailles Treaty and pledged itself to exert all its energy for their fulfilment. And just as it submitted to the bourgeoisie in matters of foreign policy, it abandoned at home all the demands of the workers, whenever it became apparent that the bourgeoisie was seriously determined to fight.
Germany’s economic collapse and the subsequent political convulsions, often gave the bureaucracy opportunity to parade as labor’s leader. The first of these was the Kapp-Putsch. When the working class had crushed the rebellious military camarilla, ana was getting ready to grasp the fruits of victory, the ADGB concluded with the government and the counter-revolution the widely known Bielefeld Agreement, pledging itself to use all its forces to break off the victorious struggle of labor. The latter was told that the ADGB guaranteed the fulfillment of the 8 points of the agreement which would provide a real protection for the workers. After the workers were once disarmed, however, the ADGB never dreamt of redeeming its promises to labor.
The same tactics were employed by the ADGB in the struggle carried on by the unemployed to secure their existence in spring 1921. In order to prevent a serious movement, the ADGB formulated ten demands, not one of which was ever complied with. In the autumn of the same year, the mark had sunk to such depths as to endanger seriously the standard of living of the German worker. Again the ADGB entered the political arena with a new series of ten demands coupled with the declaration that unless these demands were complied with, both labor and the economic household would be ruined completely. The first of these demands was the confiscation of 25 per cent of all gold values. The working class, which put its trust into the ADGB, was again sorely disappointed, for nothing whatever was done to enforce those demands.
But the policy of collaboration with the bourgeoisie, which the ADGB refused to abandon, and which had compelled it to sabotage the Bielefeld Agreement, the unemployment demands and the demand for the confiscation of 25 per cent of all gold values, was also at the bottom of its cynical betrayal of the railway officials in the Spring of 1922, and its union with all those who openly advocated the use of armed force against the railwaymen whom unbearable economic pressure had forced to strike. The betrayal of the struggling workers was so base and so enraged the workers, that their spirit of solidarity urged them to side with the strikers and they rebelled against the ADGB.
The ADGB’s policy of cooperation roused great indignation in the ranks of organized labor. This indignation is unfortunately being expressed by the workers turning their backs on trade unions. The number of organized workers has decreased considerably, during 1921, and the tendency to leave the trade unions is still prevalent. The reason for this, as advanced by the ADGB, was that hundreds of thousands of newly organized members being slow to grasp the advantages of trade unions, had left dissatisfied, while others had been repelled by the inciting activities of the Communists. A third reason given for the decrease is the bad economic situation.
To all of which we have the following reply. Firstly unemployment is practically negligible in Germany today; there is even less of it than before the war; such periods have always been noted as favorable for organization. Secondly, wherever and whenever Communist work was successful in the trade unions, there was the least decrease of membership to be noted. Thirdly, the decrease of membership is proportionate to the increase of the aggressiveness of the bourgeoisie, the partner of the trade union bureaucracy. This is made quite clear by the market decrease after the assassination of Rathenau, when the trade union bureaucracy, by steering into shallow waters the struggle against the reaction, which the workers had taken up with so much energy, became a party to the resurrection of reaction.
In all other economic and social questions, the reformist trade union leaders have also failed miserably. In order to preserve cooperation, they yielded to the employers in the matter of the workers’ rights and social institutions, and were even in part ready to sacrifice the eight-hour day. The shop steward committees have been shorn of their power to a greater extent than even the employers had intended to.
III. The Leipzig Trade Union Congress and Our Prospects
At the trade union congress in Leipzig, the ADGB had to account for its policy, and German organized labor has drawn the conclusions. Wherever the opposition secured a footing it routed the reformist collaborators. Even if only 90 of the 700 delegates at the congress belonged to the Communist opposition, there can be no doubt that these 90 had the backing of 35 to 40 per cent of German organized labor. Only by various manipulations did the bureaucracy succeed in securing a big majority. But although the opposition at Nürnberg had reason to hope that victory would be theirs, and the old bureaucracy had to prepare for the worst, the latter was nevertheless better able to defend itself and to maintain its position in Nürnberg than in Leipzig, where the managing committee of the ADGB, in spite of its SPD majority, was defeated on all points. Only in mere routine matters could the bureaucracy count on the support of the majority; in the voting on the questions of collaboration, industrial unions, and other important matters, the majority was either against the ADGB or it was so composed as to render the continuation of the old policy impossible.
During the last three years, Germany’s economic situation has been growing from bad to worse, and even the most backward workers are beginning to understand that collaboration, leads to abject misery, and that other ways and means must be found to safeguard labor’s existence.
Prompted by these and similar considerations, the organized workers are massing on the left, confiding more and more in the Communist leaders and refusing to tolerate any longer the persecution of Communists.
The ADGB has learned nothing whatever since Nürnberg. In the days of labor’s direst privation it was still aiding the bourgeoisie, and no outbursts of indignation on the part of the membership could move it to abandon that policy. Having sacrificed its demands after the Rathenau murder, it now steps forth and declares boldly; our principal task is to oppose the Communists. This, in a period of capitalist aggression, at a time when the sudden rise of prices, when reaction rears its head once more! The next few months will convince the ADGB that the workers have other matters to look after: to organize themselves against the bourgeoisie and all those in league with it. The campaign against the Communist opposition will end with the defeat of the trade union bureaucracy. That is the balance of Leipzig!
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<h2>Fritz Heckert</h2>
<h4>The Class Struggle</h4>
<h1>The General Strike in Germany,<br>
its Development, its Effect and its Lessons</h1>
<h3>(6 September 1923)</h3>
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<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1923/v03n59[37]-sep-06-1923-Inprecor-loc.pdf" target="new">Vol. 3 No. 59 [37]</a>, 6 September 1923, pp. 649–651.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2023). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
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<p class="fst">On the anniversary of the founding of the German Republic, 12,000 shop stewards representing the workers of Greater Berlin assembled m Berlin, and resolved to enter upon a general strike, and to call upon the workers in town and country to participate in it. The strike was called for three days; its demands included political and economic aims. Now the strike has terminated without all the demands having been realized, the bourgeoisie and social democracy haste to exclaim; “The general strike action has completely collapsed, the workers have been lured to rum by the communists, but the collapse of the general strike has at least had the beneficial effect that the Communist Party is completely done for and the workers have been cured of all ideas of communist putsches.” At the same moment, when all bourgeois and social democratic newspapers are writing in this fashion, the minister of police. Severing, issues a Ukase declaring the National Committee of the Factory Councils and all its subcommittees to be dissolved. Words and deeds are here completely at variance. If the workers have completely rejected communism, if the Communist Party is absolutely dead – then whence the necessity of an exceptional law against a committee of shop stewards which has entirely lost all influence owing to the outcome of the movement? The bourgeois papers and the social democrats are forced into such contradictions. They must keep up their own courage and that of their readers.</p>
<p>If we desire to form a correct estimate of the last general strike, we must accord it a somewhat more thorough attention than the social democratic and bourgeois newspapers care to give it.</p>
<p>The <strong>Vossische Zeitung</strong> writes: “The communists enjoyed an incredible boom last week (before the general strike), but they have lost the entire game by their foolishness. If they had waited, the ripe fruit would have fallen into their mouths. They have lost everything by their stupid general strike.” The social democratic <strong>Vorwärts</strong> expounds at great length that such a general strike was destined to fall from the beginning, as the trade union leaders had not organized and led it. No general strike has any prospect of success miles properly prepared, and less its demands have been thoroughly examined as to their expediency by the competent authorities. We need not be offended when the <strong>Vossische Zeitung</strong> and all the other press duennas write such foolish nonsense about the labor movement. But we have a right to expect more from a social democratic paper.</p>
<p>As early as 1900, when the problem of the mass strike was pushed into the foreground by the first Russian revolution, our murdered comrade, Rosa Luxemburg, overwhelmed the trade union leaders and party bureaucrats with biting irony and ridicule, because they condemned the mass strike as not fitting into their famous strike formula. She showed that the mass strike is based on other conditions and other laws than the ordinary wages strikes, and that a mass strike, when formulating its aims, will not hold to conditions devised in the conference rooms of trade union bureaucrats.</p>
<p>Mass strikes do not fall from the sky. They have to be made by the workers. But before the working masses grasp the intuitive for a mass strike movement, a number of prerequisites are necessary. Were these prerequisites given in this last strike movement? To this question we can reply in the affirmative. The working class of Germany is living under the most wretched conditions imaginable. The bankrupt bourgeoisie plunges the working class into daily increasing misery and poverty. This unbearable misery forces the workers into continuous economic struggles. But the results of these economic struggles are always annulled again by the policy of tire ruling class, The Cuno government was a government which had proved itself entirely incapable of saving German economics, and with them the German working class, from falling over the precipice. The workers knew from experience that so long as this government held the reins there was no hope of emerging from their misery. But experience has also taught them something else in the course of the last few months, i.e., that the social democratic party and the trade union leaders have been tolerating or even supporting this bankrupt bourgeois policy. Thus the working class not only lost its confidence in Cuno’s government, but became very distrustful of the trade union leaders. During the last few weeks the workers have entered into a number of strikes. The net result of these strikes has been that wages had a lower purchasing power at the end of the strike period than at the beginning, that the government ruthlessly employed its forces for the suppression of all strikes, and that the social democratic bureaucracy sabotaged or even combatted the strikes. The working class, owing to these experiences. felt itself thrown on its own resources.</p>
<p>When the Cuno government was compelled to convene parliament in order to create for itself a basis for its further rule, the workers in all cities and villages of Germany felt: This government cannot be tolerated any longer. It must go! A workers’ deputation expressed this feeling of the masses by the sentence: “It is no longer possible to pace any confidence in this government. If another government comes, there is at least a hope that it will be better than Cuno’s government.” There was no need for the workers to hold any great consultations before formulating their demands: Wages with a constant value – but first of all the overthrow of Cuno’s government. Resolutions and motions to this effect were passed at thousands of meetings. When the Reichstag met, hundreds of workers’ deputations came and demanded of the leading organizations that they should fight energetically for the aims formulated by the masses. But social democracy, and the General German Trade Unions Federation, would not for a moment entertain the idea of a joint struggle of the workers for the realization of the workers’ demands. By Friday, August 10, the head organizations had still not decided to accede to the will of the masses. The proposal made by the Communists, that the General German Trade Union Federation should place itself at the head of the now unpreventable mass movement, and should fight with the masses for the realization of their demands, was scornfully rejected. On Saturday August 11, at 1 o’clock p.m., there was still a three-quarters majority in the social democratic Reichstag fraction for the retention of the Cuno government. The higher bureaucracy still believed that it was possible to hold the workers back from lighting. But when a “wild” plenary factory council meeting, attended by 12,000 shop stewards, resolved on the general strike; when the tramway workers ceased work and the electrical workers at Golpa turned off the current, then the social democrats saw that they could no longer maintain the Cuno government. The mass storm broke the resistance of the social democratic leaders, and swept away Cuno’s government. The bourgeoisie found itself obliged to make great material concessions to the workers in many places. Thus the mass strike brought about the realization of many of the demands made, even before its effects were fully felt.</p>
<p>And how was its leadership, its organizatory and technical executive? On Friday, August 10, the trade unions declined to put themselves at the head of the inevitable movement. And yet it was perfectly plain to the trade union bureaucrats that their standing aside could not stem the movement. Their sole consolation was that neither had the communists sufficient power to lead the movement and bring it to a good end. We were told: “The masses are already beyond your control. By next Wednesday the whole movement will be a heap of debris, and we trade union leaders will once more be called upon to help the workers out of the unhappy situation into when you communists have led them.”</p>
<p>The plenary factory council meeting had therefore no choice but itself to form a central strike leadership for the purpose of securing the united and uniform advance of the movement. Trade union bureaucracy and social democracy immediately called upon the workers to ignore the instructions issued by the strike central, and to remain at work. Despite this, the strike leaders were able to keep perfected control of the lighting masses. All provocat ons on the part of the bourgeoisie, the police, and the trade union and social democratic bureaucracy, were successfully warded off.</p>
<p>In order to undermine the general strike, and to disunite the fighting masses, every available means were employed by the government, the bourgeoisie, and the social democrats, the committees of the national trade union of railwaymen, and of the German railwaymen’s union, declared to the ministers Stresemann and Hilferding that the minister for traffic for the whole German Republic, the notorious General Gröner, must not be permitted to enter the cabinet, or they would not be able to hold the workers back from striking. Under this pressure the new ministers made this concession, followed by further concessions with respect to higher wages. The workers on the overhead railways and tramways were granted large additions to their wages for coping with the rising prices, in order to induce them to desert the ranks. This manoeuvre met with considerable success. The printers, who were also on strike were granted enormous payments per hour; by this they were bought off and the bourgeoisie and the government were enabled to publish their press and poison public opinion. In this strike the electricians did not prove so powerful a factor as has been the case in former movements. This is due to the fact that a number of large power stations connected their systems with one another, while there was no unified down tools policy in this whole network of electric works, for coordination among the electrical workers was extremely deficient. These were circumstances very prejudicial to the strike. To this must be added that the provincial districts were insufficiently prepared for participation in a general strike. The appeal issued by the Berlin factory councils did not reach the ears of the workers throughout Germany until Monday, so that the provinces could not join the movement until Monday afternoon or Tuesday morning. This deprived the strike movement of the impetus of a simultaneous beginning And a third factor calculated to interfere with the coherence and progress of the movement was the fact that the main political demand – overthrow of Cuno’s government had already been realized on Saturday evening, 36 hours before the provinces received the summons to take part in the general strike.</p>
<p>The strike leaders devoted every attention to all these difficulties and defects iu the movement. At a fresh plenary factory council meeting, attended by 13,000 shop stewards, they advised that the strike be broken off on Tuesday evening, the term fixed from the beginning of the strike. In making this proposition, the strike leaders felt that the growing united front of the workers must not be destroyed; that it would be unwise to let one section of the workers continue in the struggle whilst others had returned to work. The strike leaders were anxious to avoid the possibility of the section of the proletariat which had resumed work being played off against the section which continued the fight. Fresh schisms among the workers were to be prevented by every possible means. Trade union bureaucracy and social democracy should be given no opportunity of keeping up their pretence of being the saviours of the proletariat. It was important to gain time, to gather force, to prepare for future struggles, to enlighten those workers who took no part in the strike, to fill up the gaps in the united front, and to learn the real lessons taught by the errors and shortcomings of the movement.</p>
<p>The 13,000 shop stewards assembled, showed complete understanding of the position of the strike leaders. With hearts filled with anger at the despicable behaviour of the leaders of the trade union organizations, and at the fresh treacheries of the social democratic leaders, the shop stewards decided that the fight be discontinued all round. Very few votes were cast against this proposition of the strike central. The meeting listened in perfect silence to the many speeches on the deficiencies in the movement, and the resolve matured in every heart to carry on the work with the utmost energy, to utilize the lessons taught by the movement in the interests of the proletariat, and thus to step forward into fresh battles with greater unity and strength than ever before. The leaders of a great struggle have never before received such a mighty and unanimous vote of confidence as that accorded to the improvised strike leadership of the general strike by the plenary meeting of the Berlin factory councils.</p>
<p>There have been many cases in which the trade union bureaucracy and social democracy have practised shameful treachery, and in these cases there have always been thousands and thousands of trade union members who nave thrown aside their trade union books and given up their membership; but this is not the case this time. The fighting workers have recognized that they must keep their trade unions united, and that it is their duty to rid themselves as rapidly as possible of the treacherous functionaries. Those social democrats and trade union bureaucrats who are calculating on being able to resume their rôle as saviours of the proletariat are doomed to disappointment. The masses are filled with an unexampled hate of bureaucracy. And when the social democratic newspaper scribes assert that the communists will be called to account by the masses for the “senseless putsch”, their words are flatly contradicted by the events in the trade unions and factories. This general strike has enormously increased the feeling of self-reliance among the workers. The Communist Party has won many tens of thousands of members. The masses recognize the Communist Party as the sole leader of the revolutionary proletariat, and the prohibition of the activity of the national committee of factory councils by the social democrat Severing, is the proof that the social democrats have lost all confidence in being able to regain the masses.</p>
<p>The general strike has brought us the coalition between the social democracy and the bourgeoisie: the alliance of bankrupt bourgeoisie with bankrupt reformism. These two partners can only work together for their common ruin. For a certain time they can rule with the aid of martial law, and at the points of Fascist and national army bayonets. The next general strike of the workers will make a clean sweep of these methods of governing a working people, and will shatter to pieces the throne of the coalition confraternity. We share the opinion of the social democratic <strong>Chemnitzer Volksstimme</strong>, that: “the coalition signifies for social democracy and reformism the last move before checkmate”. Meanwhile we leave it to the bourgeoisie and to the social democrats to continue to philosophize over the “breakdown” of the Communist Party and the general strike. The German working class will march forwards and act.</p>
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MIA > Archive > Fritz Heckert
Fritz Heckert
The Class Struggle
The General Strike in Germany,
its Development, its Effect and its Lessons
(6 September 1923)
From International Press Correspondence, Vol. 3 No. 59 [37], 6 September 1923, pp. 649–651.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2023). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
On the anniversary of the founding of the German Republic, 12,000 shop stewards representing the workers of Greater Berlin assembled m Berlin, and resolved to enter upon a general strike, and to call upon the workers in town and country to participate in it. The strike was called for three days; its demands included political and economic aims. Now the strike has terminated without all the demands having been realized, the bourgeoisie and social democracy haste to exclaim; “The general strike action has completely collapsed, the workers have been lured to rum by the communists, but the collapse of the general strike has at least had the beneficial effect that the Communist Party is completely done for and the workers have been cured of all ideas of communist putsches.” At the same moment, when all bourgeois and social democratic newspapers are writing in this fashion, the minister of police. Severing, issues a Ukase declaring the National Committee of the Factory Councils and all its subcommittees to be dissolved. Words and deeds are here completely at variance. If the workers have completely rejected communism, if the Communist Party is absolutely dead – then whence the necessity of an exceptional law against a committee of shop stewards which has entirely lost all influence owing to the outcome of the movement? The bourgeois papers and the social democrats are forced into such contradictions. They must keep up their own courage and that of their readers.
If we desire to form a correct estimate of the last general strike, we must accord it a somewhat more thorough attention than the social democratic and bourgeois newspapers care to give it.
The Vossische Zeitung writes: “The communists enjoyed an incredible boom last week (before the general strike), but they have lost the entire game by their foolishness. If they had waited, the ripe fruit would have fallen into their mouths. They have lost everything by their stupid general strike.” The social democratic Vorwärts expounds at great length that such a general strike was destined to fall from the beginning, as the trade union leaders had not organized and led it. No general strike has any prospect of success miles properly prepared, and less its demands have been thoroughly examined as to their expediency by the competent authorities. We need not be offended when the Vossische Zeitung and all the other press duennas write such foolish nonsense about the labor movement. But we have a right to expect more from a social democratic paper.
As early as 1900, when the problem of the mass strike was pushed into the foreground by the first Russian revolution, our murdered comrade, Rosa Luxemburg, overwhelmed the trade union leaders and party bureaucrats with biting irony and ridicule, because they condemned the mass strike as not fitting into their famous strike formula. She showed that the mass strike is based on other conditions and other laws than the ordinary wages strikes, and that a mass strike, when formulating its aims, will not hold to conditions devised in the conference rooms of trade union bureaucrats.
Mass strikes do not fall from the sky. They have to be made by the workers. But before the working masses grasp the intuitive for a mass strike movement, a number of prerequisites are necessary. Were these prerequisites given in this last strike movement? To this question we can reply in the affirmative. The working class of Germany is living under the most wretched conditions imaginable. The bankrupt bourgeoisie plunges the working class into daily increasing misery and poverty. This unbearable misery forces the workers into continuous economic struggles. But the results of these economic struggles are always annulled again by the policy of tire ruling class, The Cuno government was a government which had proved itself entirely incapable of saving German economics, and with them the German working class, from falling over the precipice. The workers knew from experience that so long as this government held the reins there was no hope of emerging from their misery. But experience has also taught them something else in the course of the last few months, i.e., that the social democratic party and the trade union leaders have been tolerating or even supporting this bankrupt bourgeois policy. Thus the working class not only lost its confidence in Cuno’s government, but became very distrustful of the trade union leaders. During the last few weeks the workers have entered into a number of strikes. The net result of these strikes has been that wages had a lower purchasing power at the end of the strike period than at the beginning, that the government ruthlessly employed its forces for the suppression of all strikes, and that the social democratic bureaucracy sabotaged or even combatted the strikes. The working class, owing to these experiences. felt itself thrown on its own resources.
When the Cuno government was compelled to convene parliament in order to create for itself a basis for its further rule, the workers in all cities and villages of Germany felt: This government cannot be tolerated any longer. It must go! A workers’ deputation expressed this feeling of the masses by the sentence: “It is no longer possible to pace any confidence in this government. If another government comes, there is at least a hope that it will be better than Cuno’s government.” There was no need for the workers to hold any great consultations before formulating their demands: Wages with a constant value – but first of all the overthrow of Cuno’s government. Resolutions and motions to this effect were passed at thousands of meetings. When the Reichstag met, hundreds of workers’ deputations came and demanded of the leading organizations that they should fight energetically for the aims formulated by the masses. But social democracy, and the General German Trade Unions Federation, would not for a moment entertain the idea of a joint struggle of the workers for the realization of the workers’ demands. By Friday, August 10, the head organizations had still not decided to accede to the will of the masses. The proposal made by the Communists, that the General German Trade Union Federation should place itself at the head of the now unpreventable mass movement, and should fight with the masses for the realization of their demands, was scornfully rejected. On Saturday August 11, at 1 o’clock p.m., there was still a three-quarters majority in the social democratic Reichstag fraction for the retention of the Cuno government. The higher bureaucracy still believed that it was possible to hold the workers back from lighting. But when a “wild” plenary factory council meeting, attended by 12,000 shop stewards, resolved on the general strike; when the tramway workers ceased work and the electrical workers at Golpa turned off the current, then the social democrats saw that they could no longer maintain the Cuno government. The mass storm broke the resistance of the social democratic leaders, and swept away Cuno’s government. The bourgeoisie found itself obliged to make great material concessions to the workers in many places. Thus the mass strike brought about the realization of many of the demands made, even before its effects were fully felt.
And how was its leadership, its organizatory and technical executive? On Friday, August 10, the trade unions declined to put themselves at the head of the inevitable movement. And yet it was perfectly plain to the trade union bureaucrats that their standing aside could not stem the movement. Their sole consolation was that neither had the communists sufficient power to lead the movement and bring it to a good end. We were told: “The masses are already beyond your control. By next Wednesday the whole movement will be a heap of debris, and we trade union leaders will once more be called upon to help the workers out of the unhappy situation into when you communists have led them.”
The plenary factory council meeting had therefore no choice but itself to form a central strike leadership for the purpose of securing the united and uniform advance of the movement. Trade union bureaucracy and social democracy immediately called upon the workers to ignore the instructions issued by the strike central, and to remain at work. Despite this, the strike leaders were able to keep perfected control of the lighting masses. All provocat ons on the part of the bourgeoisie, the police, and the trade union and social democratic bureaucracy, were successfully warded off.
In order to undermine the general strike, and to disunite the fighting masses, every available means were employed by the government, the bourgeoisie, and the social democrats, the committees of the national trade union of railwaymen, and of the German railwaymen’s union, declared to the ministers Stresemann and Hilferding that the minister for traffic for the whole German Republic, the notorious General Gröner, must not be permitted to enter the cabinet, or they would not be able to hold the workers back from striking. Under this pressure the new ministers made this concession, followed by further concessions with respect to higher wages. The workers on the overhead railways and tramways were granted large additions to their wages for coping with the rising prices, in order to induce them to desert the ranks. This manoeuvre met with considerable success. The printers, who were also on strike were granted enormous payments per hour; by this they were bought off and the bourgeoisie and the government were enabled to publish their press and poison public opinion. In this strike the electricians did not prove so powerful a factor as has been the case in former movements. This is due to the fact that a number of large power stations connected their systems with one another, while there was no unified down tools policy in this whole network of electric works, for coordination among the electrical workers was extremely deficient. These were circumstances very prejudicial to the strike. To this must be added that the provincial districts were insufficiently prepared for participation in a general strike. The appeal issued by the Berlin factory councils did not reach the ears of the workers throughout Germany until Monday, so that the provinces could not join the movement until Monday afternoon or Tuesday morning. This deprived the strike movement of the impetus of a simultaneous beginning And a third factor calculated to interfere with the coherence and progress of the movement was the fact that the main political demand – overthrow of Cuno’s government had already been realized on Saturday evening, 36 hours before the provinces received the summons to take part in the general strike.
The strike leaders devoted every attention to all these difficulties and defects iu the movement. At a fresh plenary factory council meeting, attended by 13,000 shop stewards, they advised that the strike be broken off on Tuesday evening, the term fixed from the beginning of the strike. In making this proposition, the strike leaders felt that the growing united front of the workers must not be destroyed; that it would be unwise to let one section of the workers continue in the struggle whilst others had returned to work. The strike leaders were anxious to avoid the possibility of the section of the proletariat which had resumed work being played off against the section which continued the fight. Fresh schisms among the workers were to be prevented by every possible means. Trade union bureaucracy and social democracy should be given no opportunity of keeping up their pretence of being the saviours of the proletariat. It was important to gain time, to gather force, to prepare for future struggles, to enlighten those workers who took no part in the strike, to fill up the gaps in the united front, and to learn the real lessons taught by the errors and shortcomings of the movement.
The 13,000 shop stewards assembled, showed complete understanding of the position of the strike leaders. With hearts filled with anger at the despicable behaviour of the leaders of the trade union organizations, and at the fresh treacheries of the social democratic leaders, the shop stewards decided that the fight be discontinued all round. Very few votes were cast against this proposition of the strike central. The meeting listened in perfect silence to the many speeches on the deficiencies in the movement, and the resolve matured in every heart to carry on the work with the utmost energy, to utilize the lessons taught by the movement in the interests of the proletariat, and thus to step forward into fresh battles with greater unity and strength than ever before. The leaders of a great struggle have never before received such a mighty and unanimous vote of confidence as that accorded to the improvised strike leadership of the general strike by the plenary meeting of the Berlin factory councils.
There have been many cases in which the trade union bureaucracy and social democracy have practised shameful treachery, and in these cases there have always been thousands and thousands of trade union members who nave thrown aside their trade union books and given up their membership; but this is not the case this time. The fighting workers have recognized that they must keep their trade unions united, and that it is their duty to rid themselves as rapidly as possible of the treacherous functionaries. Those social democrats and trade union bureaucrats who are calculating on being able to resume their rôle as saviours of the proletariat are doomed to disappointment. The masses are filled with an unexampled hate of bureaucracy. And when the social democratic newspaper scribes assert that the communists will be called to account by the masses for the “senseless putsch”, their words are flatly contradicted by the events in the trade unions and factories. This general strike has enormously increased the feeling of self-reliance among the workers. The Communist Party has won many tens of thousands of members. The masses recognize the Communist Party as the sole leader of the revolutionary proletariat, and the prohibition of the activity of the national committee of factory councils by the social democrat Severing, is the proof that the social democrats have lost all confidence in being able to regain the masses.
The general strike has brought us the coalition between the social democracy and the bourgeoisie: the alliance of bankrupt bourgeoisie with bankrupt reformism. These two partners can only work together for their common ruin. For a certain time they can rule with the aid of martial law, and at the points of Fascist and national army bayonets. The next general strike of the workers will make a clean sweep of these methods of governing a working people, and will shatter to pieces the throne of the coalition confraternity. We share the opinion of the social democratic Chemnitzer Volksstimme, that: “the coalition signifies for social democracy and reformism the last move before checkmate”. Meanwhile we leave it to the bourgeoisie and to the social democrats to continue to philosophize over the “breakdown” of the Communist Party and the general strike. The German working class will march forwards and act.
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<h2>Fritz Heckert</h2>
<h4>The Labor Movement</h4>
<h1>The Lessons of the Last Miners’ Strike</h1>
<h3>(15 March 1923)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1923/v03n26-mar-15-1923-Inprecor-loc.pdf" target="new">Vol. 3 No. 26</a>, 15 March 1923, p. 206.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
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<p class="fst">The strike of the French miners which ended on February 21 raises the question of how far the struggles of the miners have any possibility of success when conducted on national lines. All great strike movements among the miners during the last few years have in the main failed. Either the strike collapsed as a result of betrayal on the part of the reformist leaders, or it has been defeated by the forces at the disposal of the capitalist state. The workers have only in a very few cases attained a partial success. And only then when the circumstances were particularly favorable, This latter was the case in the American miners’ strike, and in the strike of the French miners. But all other fights have been lost, and were bound to be lost under the circumstance in which they took place.</p>
<p>Two currents are struggling against one another in the trade union movement: the one in favor of working unity with the bourgeoisie, and the other opposed to this – the revolutionary current. Nearly all the miners’ unions are in the hands of leaders who support working unity. These leaders are of the opinion that the class interests of the proletariat should be subordinated to the general interests of the state, that is, to the needs of the capitalist state. Since the revolution, every strike undertaken by the German miners has been systematically wrecked by the trade union bureaucracy, and this trade union bureaucracy has invariably explained to the workers that state necessity demanded the abandonment of the strike. This was the case in Czechoslovakia, and in Poland. We can still clearly remember the utterance of J.H. Thomas, the chairman of the Amsterdam Trade Union International and leader of the English railwaymen’s union: it was thanks to the command issued by him to break off the last miners’ strike in England that the fall of the English governing power was prevented. The Frenchman Bartuel was one of the most zealous advocates of the dictates of the Spa agreement, which forces the German miners not only to toil for the German capitalist, but to permit himself to be robbed at the same time for the benefit of French imperialists. The revolutionary section of the workers however, is of the opinion that every endeavor must be directed to defend the interests of the workers as a class. The interests of the workers unlike the interests of the bourgeoisie, do not clash on any national frontier. The workers of all countries have one common interest, the bourgeoisies have opposing interests. When revolutionary workers stand for a ruthless struggle for the defence of workers’ interests, they, at the same time, stand for the international action of the proletariat against capitalism and its attendant dangers.</p>
<p>The coal agreement made at Spa threw great numbers of English miners out of work, and rendered the French and Belgian miners incapable of delending their wages and working conditions with any prospect of success. The low wages of the German miners are to blame for the low wages and misery of the miners in all other countries. The reformist miners leaders know this very well, it can scarcely be assumed that they are too stupid to see it. But their relations with their national bourgeoisie are much closer than their relations with the international proletariat, and with the collective interests of the working class.</p>
<p>This is again plainly illustrated by the miners’ strike in France. In the first place the French capitalists had created adverse conditions for obtaining coal supplies, in both areas, by the occupation of the Ruhr. Germany is cut off from the Ruhr coal. Transport to France is prevented by the counter-action of the German railwaymen, who have stopped work on the railroads of the occupied territory. For the first time for many years the French miners had the opportunity of utilizing the embarrassment of the French capitalists for the purpose of gaining better wages and working conditions. The revolutionary miners utilized the situation, but the reformist leaders demanded blackleg service from their followers. They could not permit a wage strike of the miners to hinder the imperialist adventure of the French capitalists. Thus Bartuel and his friends have deprived the French workers of the success of their wage struggle, and have sided with Poincaré.</p>
<p>The case was exactly the same in Czecho-Slovakia. The miners, long suffering from capitalist attacks, during the last few weeks, attempted to fight for better wages. But as Czechoslovakia has friendly relations with France, the reformist leaders of the Czecho-Slovakian miners thought fit to oppose the fight of the Czech miners. In England the miners’ leaders also seized the opportunity of rendering their ruling class a service. The struggle in the Ruhr area and the strike of the French miners gave the English colliery owners the chance of doing good business. Now they were able to sell coal to the Germans and French. This favorable state of their market was utilized by the English bourgeoisie, who doubled the price of coal. The English colliery owners triumphantly announced that, thanks to this stale of affairs, the number of English unemployed had sunk by 125,000. The English reformist leaders share the joys of their bourgeoisie so fully, that Mr Hodges replied to the demand made by the revolutionary miners of various countries, for the organization of a joint action against Poincaré’s imperialist policy, with the answer that the situation was not suitable for starting such a movement. And indeed, why should the chairman of the miners’ international trouble about proletarian measures for international fighting, so long as the English bourgeoisie is doing good business, and few crumbs from its full table fail to its lackeys.</p>
<p>In England the rise in the the price of coal is accompanied by a rise in food prices, and it will not be long before the English miners will have to fight to have their wages adjusted to the higher prices. If Poincaré is victorious in the Ruhr, enormous quantities of cheap German coal will speedily appear on the French market, and it will be impossible for the French miners to defend their working conditions against the capitalists. Should the Ruhr conflict end with the victory of Poincaré, the Czech miners will also be forced into a precarious position. Should the German bourgeoisie come to an understanding with the French in the Ruhr, it will not be long before the English miners will be again, out of work. The German bourgeoisie utilizes the Ruhr conflict to lengthen the working hours of the German miners. When once these worsened working conditions have been introduced, then it is a matter of indifference whether Poincaré or Cuno is the victor, for the bad working conditions imposed on the German miners will have a decisive influence on the working conditions of the miners in other parts of the world. Instead of the miners of Europe mutually supporting each other by joint action for the defence of their class interests, and thus striking a severe blow at their class enemy, they have, under their reformist leaders, done precisely the contrary. The most favorable moment for joint action is again missed. The hand outstretched by the revolutionary worker for the formation of a united front is scornfully rejected. Hodges refuses any alliance, that is, with the working class, but not with the English bourgeoisie. Bartuel, who organized the blackleg action of the reformists in France, has not only thereby helped French mining capital out of a critical situation, he has at the same time weakened the labor organizations, and rendered hundreds and thousands of workers incapable of fighting.</p>
<p>But the behaviour of the German reformists during this period has been the most idiotic of all. They are desirous that the English and French labor leaders, especially the miners’ leaders, help them to ward off the attack of French imperialism. At the same time they are in such a state of senseless rage against workers holding communist views, that they attack the fighting communists in the most despicable manner and do not desire the victory of the revolutionary miners of France, but the victory of the reformist Bartuel, the ally of Poincaré. Is it to be wondered, under such circumstances, that the workers are reduced to impotency and the Stinnes of every country triumph?</p>
<p>The French miners’ strike has once more demonstrated the complete bankruptcy of reformism. The cowardly and bourgeois-coalition attitude of the reformist leaders can serve nobody but the capitalists, nobody but the national bourgeoisie of each country. The breakdown of economics, and of the labor movement, is bound to become continually worse under such circumstances, unless the revolutionary workers succeed in completely overthrowing the whole wretched reformist policy. The mining strike in France has opened the eyes of many thousands of pit slaves. They have recognized the dangers of reformism, and are turning to the revolutionary trade union organizations of the C.G.T.U. The example set by the French combatants has had a stimulating effect upon the Belgian miners. The resistance of the Belgian coal miners against their employers is growing; these miners are no longer listening to the hoarse shouting of the Belgian reformists, who maintain that the unrest among the Belgian miners is solely the result of communist agitation. The revolutionary miners must utilize the unrest obtaining among the miners of every country. They must show their fellow-miners that only by joint action can they hope for success, that they must no longer permit themselves to be exploited by their reformist leaders for the benefit of their national bourgeoisie, but they must all stand together in one common front for the ruthless defence of their class interests. Fresh conflicts are arising all round; it must be our work to prepare ourselves thoroughly for the fight, that it may end in a victory over the capitalists and reformists.</p>
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MIA > Archive > Fritz Heckert
Fritz Heckert
The Labor Movement
The Lessons of the Last Miners’ Strike
(15 March 1923)
From International Press Correspondence, Vol. 3 No. 26, 15 March 1923, p. 206.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
The strike of the French miners which ended on February 21 raises the question of how far the struggles of the miners have any possibility of success when conducted on national lines. All great strike movements among the miners during the last few years have in the main failed. Either the strike collapsed as a result of betrayal on the part of the reformist leaders, or it has been defeated by the forces at the disposal of the capitalist state. The workers have only in a very few cases attained a partial success. And only then when the circumstances were particularly favorable, This latter was the case in the American miners’ strike, and in the strike of the French miners. But all other fights have been lost, and were bound to be lost under the circumstance in which they took place.
Two currents are struggling against one another in the trade union movement: the one in favor of working unity with the bourgeoisie, and the other opposed to this – the revolutionary current. Nearly all the miners’ unions are in the hands of leaders who support working unity. These leaders are of the opinion that the class interests of the proletariat should be subordinated to the general interests of the state, that is, to the needs of the capitalist state. Since the revolution, every strike undertaken by the German miners has been systematically wrecked by the trade union bureaucracy, and this trade union bureaucracy has invariably explained to the workers that state necessity demanded the abandonment of the strike. This was the case in Czechoslovakia, and in Poland. We can still clearly remember the utterance of J.H. Thomas, the chairman of the Amsterdam Trade Union International and leader of the English railwaymen’s union: it was thanks to the command issued by him to break off the last miners’ strike in England that the fall of the English governing power was prevented. The Frenchman Bartuel was one of the most zealous advocates of the dictates of the Spa agreement, which forces the German miners not only to toil for the German capitalist, but to permit himself to be robbed at the same time for the benefit of French imperialists. The revolutionary section of the workers however, is of the opinion that every endeavor must be directed to defend the interests of the workers as a class. The interests of the workers unlike the interests of the bourgeoisie, do not clash on any national frontier. The workers of all countries have one common interest, the bourgeoisies have opposing interests. When revolutionary workers stand for a ruthless struggle for the defence of workers’ interests, they, at the same time, stand for the international action of the proletariat against capitalism and its attendant dangers.
The coal agreement made at Spa threw great numbers of English miners out of work, and rendered the French and Belgian miners incapable of delending their wages and working conditions with any prospect of success. The low wages of the German miners are to blame for the low wages and misery of the miners in all other countries. The reformist miners leaders know this very well, it can scarcely be assumed that they are too stupid to see it. But their relations with their national bourgeoisie are much closer than their relations with the international proletariat, and with the collective interests of the working class.
This is again plainly illustrated by the miners’ strike in France. In the first place the French capitalists had created adverse conditions for obtaining coal supplies, in both areas, by the occupation of the Ruhr. Germany is cut off from the Ruhr coal. Transport to France is prevented by the counter-action of the German railwaymen, who have stopped work on the railroads of the occupied territory. For the first time for many years the French miners had the opportunity of utilizing the embarrassment of the French capitalists for the purpose of gaining better wages and working conditions. The revolutionary miners utilized the situation, but the reformist leaders demanded blackleg service from their followers. They could not permit a wage strike of the miners to hinder the imperialist adventure of the French capitalists. Thus Bartuel and his friends have deprived the French workers of the success of their wage struggle, and have sided with Poincaré.
The case was exactly the same in Czecho-Slovakia. The miners, long suffering from capitalist attacks, during the last few weeks, attempted to fight for better wages. But as Czechoslovakia has friendly relations with France, the reformist leaders of the Czecho-Slovakian miners thought fit to oppose the fight of the Czech miners. In England the miners’ leaders also seized the opportunity of rendering their ruling class a service. The struggle in the Ruhr area and the strike of the French miners gave the English colliery owners the chance of doing good business. Now they were able to sell coal to the Germans and French. This favorable state of their market was utilized by the English bourgeoisie, who doubled the price of coal. The English colliery owners triumphantly announced that, thanks to this stale of affairs, the number of English unemployed had sunk by 125,000. The English reformist leaders share the joys of their bourgeoisie so fully, that Mr Hodges replied to the demand made by the revolutionary miners of various countries, for the organization of a joint action against Poincaré’s imperialist policy, with the answer that the situation was not suitable for starting such a movement. And indeed, why should the chairman of the miners’ international trouble about proletarian measures for international fighting, so long as the English bourgeoisie is doing good business, and few crumbs from its full table fail to its lackeys.
In England the rise in the the price of coal is accompanied by a rise in food prices, and it will not be long before the English miners will have to fight to have their wages adjusted to the higher prices. If Poincaré is victorious in the Ruhr, enormous quantities of cheap German coal will speedily appear on the French market, and it will be impossible for the French miners to defend their working conditions against the capitalists. Should the Ruhr conflict end with the victory of Poincaré, the Czech miners will also be forced into a precarious position. Should the German bourgeoisie come to an understanding with the French in the Ruhr, it will not be long before the English miners will be again, out of work. The German bourgeoisie utilizes the Ruhr conflict to lengthen the working hours of the German miners. When once these worsened working conditions have been introduced, then it is a matter of indifference whether Poincaré or Cuno is the victor, for the bad working conditions imposed on the German miners will have a decisive influence on the working conditions of the miners in other parts of the world. Instead of the miners of Europe mutually supporting each other by joint action for the defence of their class interests, and thus striking a severe blow at their class enemy, they have, under their reformist leaders, done precisely the contrary. The most favorable moment for joint action is again missed. The hand outstretched by the revolutionary worker for the formation of a united front is scornfully rejected. Hodges refuses any alliance, that is, with the working class, but not with the English bourgeoisie. Bartuel, who organized the blackleg action of the reformists in France, has not only thereby helped French mining capital out of a critical situation, he has at the same time weakened the labor organizations, and rendered hundreds and thousands of workers incapable of fighting.
But the behaviour of the German reformists during this period has been the most idiotic of all. They are desirous that the English and French labor leaders, especially the miners’ leaders, help them to ward off the attack of French imperialism. At the same time they are in such a state of senseless rage against workers holding communist views, that they attack the fighting communists in the most despicable manner and do not desire the victory of the revolutionary miners of France, but the victory of the reformist Bartuel, the ally of Poincaré. Is it to be wondered, under such circumstances, that the workers are reduced to impotency and the Stinnes of every country triumph?
The French miners’ strike has once more demonstrated the complete bankruptcy of reformism. The cowardly and bourgeois-coalition attitude of the reformist leaders can serve nobody but the capitalists, nobody but the national bourgeoisie of each country. The breakdown of economics, and of the labor movement, is bound to become continually worse under such circumstances, unless the revolutionary workers succeed in completely overthrowing the whole wretched reformist policy. The mining strike in France has opened the eyes of many thousands of pit slaves. They have recognized the dangers of reformism, and are turning to the revolutionary trade union organizations of the C.G.T.U. The example set by the French combatants has had a stimulating effect upon the Belgian miners. The resistance of the Belgian coal miners against their employers is growing; these miners are no longer listening to the hoarse shouting of the Belgian reformists, who maintain that the unrest among the Belgian miners is solely the result of communist agitation. The revolutionary miners must utilize the unrest obtaining among the miners of every country. They must show their fellow-miners that only by joint action can they hope for success, that they must no longer permit themselves to be exploited by their reformist leaders for the benefit of their national bourgeoisie, but they must all stand together in one common front for the ruthless defence of their class interests. Fresh conflicts are arising all round; it must be our work to prepare ourselves thoroughly for the fight, that it may end in a victory over the capitalists and reformists.
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<h2>Zetkin <em>et al.</em></h2>
<h1>Open Letter</h1>
<h4>To the London and Vienna Internationals<br>
and the Amsterdam Trade Union International</h4>
<h3>(16 January 1923)</h3>
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<p class="info"><strong>Source:</strong> <em><strong>International Press Correspondence</strong></em>, <a href="../../../../history/international/comintern/inprecor/1923/v03n08-jan-19-spec-corresp-Inp-stan.pdf" target="new">Vol. 3 No. 8</a>, 19 January 1923, p. 62.<br>
<strong>Transcription & HTML Markup:</strong> <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<strong>Public Domain:</strong> Marxists’ Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
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<p class="fst">On the 13th of this month the Executive of the Communist International had addressed the question to you, as to what you intend to do in order to carry out the decision of the Hague Conference regarding the organization of a general strike in case of a war. The Executive of the Communist International has empowered the undersigned, together with Marcel Cachin, to enter into negotiations with you on the question of a common fight against the danger of war. Owing to the persecutions to which the Communist Party of France is subjected because of its struggle against the occupation of the Ruhr, and owing to his impending arrest, Comrade Marcel Cachin is unable to participate in these negotiations. The undersigned are awaiting your reply to form a joint <em>Committee of Action</em> with you, capable of taking up lhe struggle against the threatening war.</p>
<p>At the Hague, the Russian Trade Union delegation proposed that an international protest strike be called for the 2nd of January. This would have demonstrated to the international bourgeoisie the determination of the proletariat to wage war against the dangers of fresh wars. At the Hague, the Russian trade union delegation predicted that January would surely see the occupation of the Ruhr. Our warnings at the Hague fell on deaf ears. Those present at the conference were satisfied with platonic protests, in the belief that bourgeois diplomacy would find some way out. But as we have seen these last four years, capitalist diplomacy has completely failed to create the simplest conditions for the peaceful development of the world. The occupation of the Ruhr threatens the world wit ha new and unprecedented wholesale slaughter.</p>
<p>The French plan aims not only at compelling the German capitalists to pay over money, but also to force them to admit French interests to the exploitation of these properties and thereby to add great numbers of cheap workers to the low paid labor army already at the disposal of Entente Imperialism.</p>
<p>But this plan was based on the assumption that the French occupation authorities would be able to supervise the Ruhr Valley, to keep industry going and, by distributing or retaining the coal, to force the German industry into submission. But with the removal of the German Coal Syndicate from Essen to Hamburg, the French plan suffered shipwreck. The French occupation authorities are helpless, and find it impossible to keep the Ruhr industry alive. Every succeeding day makes it more difficult for them to pay out the miners' wages. For this reason it is almost certain that they will reach out beyond the boundaries of the Ruhr Valley in order to tighten their pressure upon the German people.</p>
<p>Already we near of war preparations in Poland. France will set her vassals against Germany. But apart from all this every moment is liable to bring a collision between the French troops and the Ruhr population, In which case the nationalistic spirit in Germany may reach its explosive point. Should It happen that the French military elements will take advantage of Poincaré’s difficulties in order to drive him on towards the Rhine-Secession-Policy, – the policy of dismembering Germany, – it may also well be that the chauvinistic elements in Germany will precipitate a war, in order to profit by the nationalistic craze for the purpose of seizing power by means of a counter-revolution.</p>
<p>Already The governments on either bank of the Rhine do not know what the morrow may bring. On the 31st of January the situation will become more acute, for on that day Germany will not be in a position to pay the sums demanded of her. The possibility then arises that the separate action of the French government may turn into a general inter-Allied action. In that case the German people may be faced with the only alternative: <em>Complete subjugation and enslavement, – or War.</em></p>
<p>The Hague conference has decided that the proletariat would fight the danger of war with all means at its disposal, and that in case of imminent danger a general strike would be called.</p>
<p>The danger of war is here. Only the blind can fail to see it <em>It is not only a question of war between France and Germany alone.</em> Such a war would set the whole East and South East of Europe ablaze. The capture of Memel by Lithuania and the events on the Roumanian-Hungarian frontier demonstrate clearly the acuteness of the present situation, in which all forces tend to render every central European conflict, the starting point for a fresh European catastrophe.</p>
<p>We doubt not but that the leaders of the Amsterdam Trade Union International, as well as those of the Vienna and London Internationals see the situation in the same light as we do. We therefore call upon you to lend reality to the solemn declarations which you have made at the Hague only a month ago, and to take the preparatory measures for the undelayed organization of the mass strike, we call upon you to meet us without delay, in order to decide upon this necessary steps to be taken.</p>
<p>The parties of the Communist International and the working masses behind the Red Labor Union International will do their duty, as our French comrades have sufficiently demonstrated.</p>
<p>We propose the 31st of January as the day when the international protest mass-strike is to begin.</p>
<p>The duration of the strike must be decided upon by the joint conference of the three political and the two trade union Internationals. We propose that this conference be held on the 21st of January in Berlin. Should you prefer another place, we have no objection whatever. We only ask you to act immediately, so that the undersigned may have ample opportunity to obtain the necessary visas.</p>
<p class="fst">Berlin, January 16, 1923</p>
<table width="100%" cellpadding="3" cellspacing="3">
<tbody><tr>
<td width="50%">
<p> </p>
</td>
<td>
<p class="fst"><strong>For the Communist International</strong><br>
<em>Clara Zetkin, Walton Newbold, Karl Radek</em></p>
<p class="fst"><strong>For the Red International of Labor Unions</strong><br>
<em>Heckert</em></p>
</td>
</tr>
</tbody></table>
<p class="fst">P.S. The other delegates, Comrades Dudilieux, Hais and Watkins, could not be reached until now.</p>
<p class="link"> <br>
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MIA > Library > Zetkin > Heckert > Newbold > Radek
Zetkin et al.
Open Letter
To the London and Vienna Internationals
and the Amsterdam Trade Union International
(16 January 1923)
Source: International Press Correspondence, Vol. 3 No. 8, 19 January 1923, p. 62.
Transcription & HTML Markup: Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists’ Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
On the 13th of this month the Executive of the Communist International had addressed the question to you, as to what you intend to do in order to carry out the decision of the Hague Conference regarding the organization of a general strike in case of a war. The Executive of the Communist International has empowered the undersigned, together with Marcel Cachin, to enter into negotiations with you on the question of a common fight against the danger of war. Owing to the persecutions to which the Communist Party of France is subjected because of its struggle against the occupation of the Ruhr, and owing to his impending arrest, Comrade Marcel Cachin is unable to participate in these negotiations. The undersigned are awaiting your reply to form a joint Committee of Action with you, capable of taking up lhe struggle against the threatening war.
At the Hague, the Russian Trade Union delegation proposed that an international protest strike be called for the 2nd of January. This would have demonstrated to the international bourgeoisie the determination of the proletariat to wage war against the dangers of fresh wars. At the Hague, the Russian trade union delegation predicted that January would surely see the occupation of the Ruhr. Our warnings at the Hague fell on deaf ears. Those present at the conference were satisfied with platonic protests, in the belief that bourgeois diplomacy would find some way out. But as we have seen these last four years, capitalist diplomacy has completely failed to create the simplest conditions for the peaceful development of the world. The occupation of the Ruhr threatens the world wit ha new and unprecedented wholesale slaughter.
The French plan aims not only at compelling the German capitalists to pay over money, but also to force them to admit French interests to the exploitation of these properties and thereby to add great numbers of cheap workers to the low paid labor army already at the disposal of Entente Imperialism.
But this plan was based on the assumption that the French occupation authorities would be able to supervise the Ruhr Valley, to keep industry going and, by distributing or retaining the coal, to force the German industry into submission. But with the removal of the German Coal Syndicate from Essen to Hamburg, the French plan suffered shipwreck. The French occupation authorities are helpless, and find it impossible to keep the Ruhr industry alive. Every succeeding day makes it more difficult for them to pay out the miners' wages. For this reason it is almost certain that they will reach out beyond the boundaries of the Ruhr Valley in order to tighten their pressure upon the German people.
Already we near of war preparations in Poland. France will set her vassals against Germany. But apart from all this every moment is liable to bring a collision between the French troops and the Ruhr population, In which case the nationalistic spirit in Germany may reach its explosive point. Should It happen that the French military elements will take advantage of Poincaré’s difficulties in order to drive him on towards the Rhine-Secession-Policy, – the policy of dismembering Germany, – it may also well be that the chauvinistic elements in Germany will precipitate a war, in order to profit by the nationalistic craze for the purpose of seizing power by means of a counter-revolution.
Already The governments on either bank of the Rhine do not know what the morrow may bring. On the 31st of January the situation will become more acute, for on that day Germany will not be in a position to pay the sums demanded of her. The possibility then arises that the separate action of the French government may turn into a general inter-Allied action. In that case the German people may be faced with the only alternative: Complete subjugation and enslavement, – or War.
The Hague conference has decided that the proletariat would fight the danger of war with all means at its disposal, and that in case of imminent danger a general strike would be called.
The danger of war is here. Only the blind can fail to see it It is not only a question of war between France and Germany alone. Such a war would set the whole East and South East of Europe ablaze. The capture of Memel by Lithuania and the events on the Roumanian-Hungarian frontier demonstrate clearly the acuteness of the present situation, in which all forces tend to render every central European conflict, the starting point for a fresh European catastrophe.
We doubt not but that the leaders of the Amsterdam Trade Union International, as well as those of the Vienna and London Internationals see the situation in the same light as we do. We therefore call upon you to lend reality to the solemn declarations which you have made at the Hague only a month ago, and to take the preparatory measures for the undelayed organization of the mass strike, we call upon you to meet us without delay, in order to decide upon this necessary steps to be taken.
The parties of the Communist International and the working masses behind the Red Labor Union International will do their duty, as our French comrades have sufficiently demonstrated.
We propose the 31st of January as the day when the international protest mass-strike is to begin.
The duration of the strike must be decided upon by the joint conference of the three political and the two trade union Internationals. We propose that this conference be held on the 21st of January in Berlin. Should you prefer another place, we have no objection whatever. We only ask you to act immediately, so that the undersigned may have ample opportunity to obtain the necessary visas.
Berlin, January 16, 1923
For the Communist International
Clara Zetkin, Walton Newbold, Karl Radek
For the Red International of Labor Unions
Heckert
P.S. The other delegates, Comrades Dudilieux, Hais and Watkins, could not be reached until now.
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<h2>Fritz Heckert</h2>
<h4>The Labor Movement</h4>
<h1>The Party and the Trade Unions<br>
in Germany</h1>
<h3>(10 October 1922)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1922/v02n087-oct-10-1922-Inprecor.pdf" target="new">Vol. 2 No. 87</a>, 10 October 1922, pp. 658–659.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<table width="80%" cellpadding="3" cellspacing="3" align="center">
<tbody><tr>
<td>
<p class="c"><strong>The beginnings of the German trade union movement – The practice of the former Social Democratic Party – The subordination of the Party to the trade union bureaucracy – Its consequences: 1914 – Confusion of ideas after the Revolution – The Communist tactics</strong></p>
</td>
</tr>
</tbody></table>
<h4>*</h4>
<p class="fst">In Germany, more than in every other country, the question of the relationship between the workers’ party and the trade union has at all times played an important role. We may justly say that the trade union movement in Germany owes its life to the Social Democracy. Founded by Socialist workers, its development always remained bound up with that of Socialism. The anti-Socialist law of 1878 ruined at the same time both the party and the trade unions.</p>
<p>After their abrogation, the trade unions turned reformist and their leaders hoped to divert them from the influence of the Social Democratic Party. The political neutrality of the trade unions was affirmed, as well as the necessity for giving them an independent central direction. Perceiving a hidden motive in the plan, formulated by Karl Legien, of creating a <em>“general council of the German trade unions”</em> whose rights would be equal to those of the party, William Liebknecht sharply attacked the project at the Congress of the Social Democratic Party in Cologne, 1893. Accusing the trade union leaders of the intention to turn the masses away from the class struggle and to lead them to reformism, he declared that the independence of the unions would only be a concession to the bourgeoisie, accustomed as they were to regard labor organizations as subversive, and that all opportunism of this sort was only in adaptation to the bourgeois state. The majority of the Socialist workers under the influence of labor leaders all belonging to the Democratic Party, found the fears of William Liebknecht exaggerated. No one wished to believe that it would be possible ever to separate the party from the unions. The Congress of the Social Democrats decided that all members of the Party ought to belong to the trade unions while the trade union Congress enjoined its members to affiliate with the Party. The trade unions were regarded as recruiting fields of the Party.</p>
<p>When the revisionist movement arose about 1900, it hoped to gain support in the labor organizations. When, in 1903, Theodor Boemelburg, president of the bricklayers’ union pronounced that celebrated sentence at the Congress of Cologne, “The trade unions and the Party are but one and the same”, it was already then no more than a hollow phrase. The trade union leaders made use of the General Council of Trade Unions to extend their influence over the party and to attempt to dominate it. The Social Democratic Congress of Mannheim (1906) decided that the Central Committee ought to come to an understanding with the trade unions before any mass movement. In that way the General Council of Trade Unions became a new central executive organ of the working class. Certainly, in signing the pact of Mannheim, it assumed the same obligation on its part; but this cost it nothing, as it was resolutely hostile to all mass actions. Boemelburg declared, “The general strike is a general madness!” and unanimous applause drowned his voice.</p>
<p>When the imperialist war broke out, the victory of the trade union bureaucracy over the Central Committee of the party was an accomplished fact. On the 4th of August 1914, the trade union leaders flatly declared that they would compel the leaders of the party to vote the war credits and to realize the fatal union with the bourgeoisie. The party capitulated unconditionally. The dictatorship of the Council of Trade Unions over the Social Democratic Party was so little concealed that when during the summer of 1915 a feeble opposition manifested itself in the party, the labor bureaucracy uttered the following threats:</p>
<p class="quoteb">“We must support with all our power the majority of the Central Committee of the party and urge it on to the path we deem good. And even if the opposition should seize power, we would not be able to remain neutral, and would be obliged to create a new party.”</p>
<p class="fst">Fritz Ebert then received the warm congratulations of Leipart, the president of the General Council of Trade Unions, for having energetically emphasized the will of the Central Committee of the party to continue at all cost the policy of August 1914. The Social Democratic Party of Germany was preparing to follow the path of denials, betrayals and counter-revolution, under the impulsion of the bureaucratic trade unions, up to the eve of the November Revolution, up to August 8th, 1918.</p>
<p>Since before the war a small group of militant revolutionaries, under the leadership of Rosa Luxemburg, had been battling to lead the trade unions back to the class struggle. But its efforts met with little success. Though gagged during the war, it was yet they who recommenced serious propaganda for revolutionary action in the trade unions. We have not forgotten that at the significant Congress of the Independent Social Democratic Party at Gotha, during Easter 1917, Hugo Haase exclaimed: “The trade unions are the most resistant ramparts of reaction. Without them the war would have been ended long ago!” But at no time did the leaders of the Independent Party cause a breach in these ramparts.</p>
<p>Since the war, during the Revolution, and up to the present, the labor leaders and the Social Democrats have persisted on the path they had traced before the war, and their constant collaboration with the bourgeoisie has been but the logical consequence of this spirit.</p>
<p>During the Proletarian Revolution, nationalism, reformism, and the deeds of the trade union bureaucracy during the war and the revolution, produced such disgust in the end, that the workers came to the most divergent conclusions as to the relationship between the party and the trade unions.</p>
<p>Some thought that so much treason had been possible only because there existed two parallel organizations (party and trade unions) and that it was necessary to create a united political and economic organization.</p>
<p>Others believed the cause of the social-patriotic deviations to be found in the form of the trade union organizations. They advocated the establishment of unions on a federal basis, which would assure the broadest autonomy to every organization and locality.</p>
<p>Still others urged the most complete political neutrality of the unions.</p>
<p>The confusion was increased by the direct action of the working masses, organized in factory and workshop councils at the beginning of the revolution. From these direct actions the militants drew the conclusion that the epoch of trade unions had been ended and that it was necessary to replace them by factory councils.</p>
<p>To arrive at real revolutionary lucidity, the German proletariat had to undergo a long series of failures and defeats in its struggle against the capitalists and the State, in its efforts designed to establish new unions, in its attempts to put new trade union doctrines into practice.</p>
<p>In the course of these experiences, the number of workers grew who recognized that trade unions are necessary organizations, that they have certain definite primary tasks to fulfill during the revolution and the period of transition from Capitalism to Socialism. On this basis it was possible to agree upon action.</p>
<p>Since 1920, sincere revolutionists have been convinced that the trade unions could tackle their tasks only on condition of definitely breaking with their former policy of collaboration of classes. This collaboration, in fact, subordinated the vital interests of the proletariat to the conservation of capitalism; sacrificed the eight-hour day, wages, the production of labor. If the workers wish to maintain or improve their conditions of living they must defend themselves against capitalism; and the least resistance today has revolutionary consequences. In order successfully to oppose its class-enemy, the proletariat as a whole ought to stand up against it; whence the need for a united front, the first condition for proletarian action against capitalism. To this condition we can add another: the international concentration of the active proletarian forces. These conditions are well founded, and it is they that divide the proletariat into two opposing camps: one of the revolutionary class struggle, and the other of cooperation with the bourgeoisie.</p>
<p>The more the revolutionary influence extended into the unions, the more energetically reacted the trade union bureaucracy. To combat the latter, to defend itself, to enlighten the working class upon the dangers of cooperation with the bourgeoisie, the revolutionary workers organized in the Communist Party created fractions or “cells” in the unions. These new groups undertake systematically to win the unions for revolutionary action. They interest themselves in all the aspects of the workers’ life and aim for united action of all the proletarian elements. The Communist workers of Germany have also commended the decisions of the Second Congress of the Communist International on the functions of trade unions.</p>
<p>The Central Committee of the German Communist Party has established a Trade Union Council which gives a single direction to all the Communist nuclei in factory, shop, or union, and organizes national and local groupings, we are benefiting today from the practical experience of 18 months of assiduous labor. In our struggle to conquer the unions we sustained grave losses. Thousands of good militants have been expelled from the unions by the reformist bureaucracy. The General Council of Trade Unions has just proclaimed that the principal task of the unions consists actually in fighting the Communist cells. Despite everything, however, we have succeeded in binding ourselves more and more strongly to the working masses. The elections of the factory committees, of local trade union committees, of representatives to the congress constantly attest to the growth of our influence. In 1921 the Communist who was a member of a “cell” was very simply expelled from the trade union organization. This year the Congress of German trade unions has recognized the Communist “cells”, not legally to be sure, but actually. The bureaucracy had to yield before facts.</p>
<p>We are only in the beginning of our work, but we cannot doubt of success. We shall lead the trade unions back to the class struggle. Better yet! – Our revolutionary activity in the trade union movement strengthens it. if after so much deception the German trade unions still remain the organizations of the masses they are, it is in a large measure thanks to us. It is our activity which has restored confidence to the workers.</p>
<p>The extension of the revolutionary movement among the trade unions cannot but proceed together with the extension of Communist influence over the masses. The unions are again becoming the recruiting field of the revolutionary political organization of the proletariat. And we are seeing the day approach when the party and the trade unions will constitute anew but a single revolutionary force directed against the capitalist system.</p>
<br>
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MIA > Archive > Fritz Heckert
Fritz Heckert
The Labor Movement
The Party and the Trade Unions
in Germany
(10 October 1922)
From International Press Correspondence, Vol. 2 No. 87, 10 October 1922, pp. 658–659.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
The beginnings of the German trade union movement – The practice of the former Social Democratic Party – The subordination of the Party to the trade union bureaucracy – Its consequences: 1914 – Confusion of ideas after the Revolution – The Communist tactics
*
In Germany, more than in every other country, the question of the relationship between the workers’ party and the trade union has at all times played an important role. We may justly say that the trade union movement in Germany owes its life to the Social Democracy. Founded by Socialist workers, its development always remained bound up with that of Socialism. The anti-Socialist law of 1878 ruined at the same time both the party and the trade unions.
After their abrogation, the trade unions turned reformist and their leaders hoped to divert them from the influence of the Social Democratic Party. The political neutrality of the trade unions was affirmed, as well as the necessity for giving them an independent central direction. Perceiving a hidden motive in the plan, formulated by Karl Legien, of creating a “general council of the German trade unions” whose rights would be equal to those of the party, William Liebknecht sharply attacked the project at the Congress of the Social Democratic Party in Cologne, 1893. Accusing the trade union leaders of the intention to turn the masses away from the class struggle and to lead them to reformism, he declared that the independence of the unions would only be a concession to the bourgeoisie, accustomed as they were to regard labor organizations as subversive, and that all opportunism of this sort was only in adaptation to the bourgeois state. The majority of the Socialist workers under the influence of labor leaders all belonging to the Democratic Party, found the fears of William Liebknecht exaggerated. No one wished to believe that it would be possible ever to separate the party from the unions. The Congress of the Social Democrats decided that all members of the Party ought to belong to the trade unions while the trade union Congress enjoined its members to affiliate with the Party. The trade unions were regarded as recruiting fields of the Party.
When the revisionist movement arose about 1900, it hoped to gain support in the labor organizations. When, in 1903, Theodor Boemelburg, president of the bricklayers’ union pronounced that celebrated sentence at the Congress of Cologne, “The trade unions and the Party are but one and the same”, it was already then no more than a hollow phrase. The trade union leaders made use of the General Council of Trade Unions to extend their influence over the party and to attempt to dominate it. The Social Democratic Congress of Mannheim (1906) decided that the Central Committee ought to come to an understanding with the trade unions before any mass movement. In that way the General Council of Trade Unions became a new central executive organ of the working class. Certainly, in signing the pact of Mannheim, it assumed the same obligation on its part; but this cost it nothing, as it was resolutely hostile to all mass actions. Boemelburg declared, “The general strike is a general madness!” and unanimous applause drowned his voice.
When the imperialist war broke out, the victory of the trade union bureaucracy over the Central Committee of the party was an accomplished fact. On the 4th of August 1914, the trade union leaders flatly declared that they would compel the leaders of the party to vote the war credits and to realize the fatal union with the bourgeoisie. The party capitulated unconditionally. The dictatorship of the Council of Trade Unions over the Social Democratic Party was so little concealed that when during the summer of 1915 a feeble opposition manifested itself in the party, the labor bureaucracy uttered the following threats:
“We must support with all our power the majority of the Central Committee of the party and urge it on to the path we deem good. And even if the opposition should seize power, we would not be able to remain neutral, and would be obliged to create a new party.”
Fritz Ebert then received the warm congratulations of Leipart, the president of the General Council of Trade Unions, for having energetically emphasized the will of the Central Committee of the party to continue at all cost the policy of August 1914. The Social Democratic Party of Germany was preparing to follow the path of denials, betrayals and counter-revolution, under the impulsion of the bureaucratic trade unions, up to the eve of the November Revolution, up to August 8th, 1918.
Since before the war a small group of militant revolutionaries, under the leadership of Rosa Luxemburg, had been battling to lead the trade unions back to the class struggle. But its efforts met with little success. Though gagged during the war, it was yet they who recommenced serious propaganda for revolutionary action in the trade unions. We have not forgotten that at the significant Congress of the Independent Social Democratic Party at Gotha, during Easter 1917, Hugo Haase exclaimed: “The trade unions are the most resistant ramparts of reaction. Without them the war would have been ended long ago!” But at no time did the leaders of the Independent Party cause a breach in these ramparts.
Since the war, during the Revolution, and up to the present, the labor leaders and the Social Democrats have persisted on the path they had traced before the war, and their constant collaboration with the bourgeoisie has been but the logical consequence of this spirit.
During the Proletarian Revolution, nationalism, reformism, and the deeds of the trade union bureaucracy during the war and the revolution, produced such disgust in the end, that the workers came to the most divergent conclusions as to the relationship between the party and the trade unions.
Some thought that so much treason had been possible only because there existed two parallel organizations (party and trade unions) and that it was necessary to create a united political and economic organization.
Others believed the cause of the social-patriotic deviations to be found in the form of the trade union organizations. They advocated the establishment of unions on a federal basis, which would assure the broadest autonomy to every organization and locality.
Still others urged the most complete political neutrality of the unions.
The confusion was increased by the direct action of the working masses, organized in factory and workshop councils at the beginning of the revolution. From these direct actions the militants drew the conclusion that the epoch of trade unions had been ended and that it was necessary to replace them by factory councils.
To arrive at real revolutionary lucidity, the German proletariat had to undergo a long series of failures and defeats in its struggle against the capitalists and the State, in its efforts designed to establish new unions, in its attempts to put new trade union doctrines into practice.
In the course of these experiences, the number of workers grew who recognized that trade unions are necessary organizations, that they have certain definite primary tasks to fulfill during the revolution and the period of transition from Capitalism to Socialism. On this basis it was possible to agree upon action.
Since 1920, sincere revolutionists have been convinced that the trade unions could tackle their tasks only on condition of definitely breaking with their former policy of collaboration of classes. This collaboration, in fact, subordinated the vital interests of the proletariat to the conservation of capitalism; sacrificed the eight-hour day, wages, the production of labor. If the workers wish to maintain or improve their conditions of living they must defend themselves against capitalism; and the least resistance today has revolutionary consequences. In order successfully to oppose its class-enemy, the proletariat as a whole ought to stand up against it; whence the need for a united front, the first condition for proletarian action against capitalism. To this condition we can add another: the international concentration of the active proletarian forces. These conditions are well founded, and it is they that divide the proletariat into two opposing camps: one of the revolutionary class struggle, and the other of cooperation with the bourgeoisie.
The more the revolutionary influence extended into the unions, the more energetically reacted the trade union bureaucracy. To combat the latter, to defend itself, to enlighten the working class upon the dangers of cooperation with the bourgeoisie, the revolutionary workers organized in the Communist Party created fractions or “cells” in the unions. These new groups undertake systematically to win the unions for revolutionary action. They interest themselves in all the aspects of the workers’ life and aim for united action of all the proletarian elements. The Communist workers of Germany have also commended the decisions of the Second Congress of the Communist International on the functions of trade unions.
The Central Committee of the German Communist Party has established a Trade Union Council which gives a single direction to all the Communist nuclei in factory, shop, or union, and organizes national and local groupings, we are benefiting today from the practical experience of 18 months of assiduous labor. In our struggle to conquer the unions we sustained grave losses. Thousands of good militants have been expelled from the unions by the reformist bureaucracy. The General Council of Trade Unions has just proclaimed that the principal task of the unions consists actually in fighting the Communist cells. Despite everything, however, we have succeeded in binding ourselves more and more strongly to the working masses. The elections of the factory committees, of local trade union committees, of representatives to the congress constantly attest to the growth of our influence. In 1921 the Communist who was a member of a “cell” was very simply expelled from the trade union organization. This year the Congress of German trade unions has recognized the Communist “cells”, not legally to be sure, but actually. The bureaucracy had to yield before facts.
We are only in the beginning of our work, but we cannot doubt of success. We shall lead the trade unions back to the class struggle. Better yet! – Our revolutionary activity in the trade union movement strengthens it. if after so much deception the German trade unions still remain the organizations of the masses they are, it is in a large measure thanks to us. It is our activity which has restored confidence to the workers.
The extension of the revolutionary movement among the trade unions cannot but proceed together with the extension of Communist influence over the masses. The unions are again becoming the recruiting field of the revolutionary political organization of the proletariat. And we are seeing the day approach when the party and the trade unions will constitute anew but a single revolutionary force directed against the capitalist system.
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<h2>F. Heckert</h2>
<h4>Discussion</h4>
<h1>The Tasks off the Communists<br>
in the Trade Union Movement</h1>
<h3>(December 1922)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1922/v02n116-dec-22-1922-Inprecor.pdf" target="new">Vol. 2 No. 116</a>, 22 December 1922, pp. 965–966.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">Comrades, Comrade Lozovsky told us this morning we must adopt a clear, unequivocal policy on the trade union question; he warned us especially against precipitate policy and advised us to reject any tactics which might lead to a split in the trade unions. He stated this very clearly. He said: If we had accepted the slogan of splitting the trade unions, or in anyway acquiesced in it, it would have meant destruction for the whole Communist movement. I also believe that we communists would have been guilty of the greatest error if we had propagated the splitting of the trade unions, or made any concessions to those elements that want to bring about such a split. I hope that this Congress will express clearly that every splitting tendency must be fought ruthlessly. It is absolutely necessary to show to the working class that we are for unity of the trade unions, if we are to carry on any serious propaganda for the United Front. We would make ourselves ridiculous before, yea, despised by the whole working class if we were to fight for the United Front and sympathise at the same time with the splitters.</p>
<p>However, in many countries, the trade unions have already been split, not only just now by the Amsterdamers, but because parallel organizations existed in those trades before and during the war. At the last Congress we had put before our comrades that it was their task to work in those dual organizations for union. Our communist comrades have not done all they could in this line. In fact, in all countries where the trade unions are split, the communists, instead of fighting for one common goal, have often opposed one another. I would therefore like to say this: every communist who does not support other communists, who are active in some other organizations, helps the reformists and those who want to break up the trade union movement. It is therefore our first duty as communists to eliminate all our little differences and to work together for a common goal. I absolutely admire our Italian comrades who have brought it about in their organization that their members understand that they must be active even in Fascist organizations, that even there we must create our cells.</p>
<p>The policy of cell formation has been much attacked even after the Third World Congress. In the German Party, for instance, there was quite a conflict on this point. There was a whole group of comrades who declared that cells were bad, and there developed among those comrades a liquidating tendency which purposed to destroy the whole trade union work of the Comintern and the whole international communist trade union movement. We have opposed these elements. This tendency was the cause of the Friesland crisis. We have expelled those people from our organizations and conducted a decisive fight to realise the unity of all revolutionary comrades. Naturally there have been unnecessary conflicts in this struggle; many a communist did not speak or act wisely enough: But it does not suffice to deal with the opposition to so-called revolutionary unions in our Party with a few words, as Comrade Lozovsky did when he declared that Comrade Masloff had acted very foolishly and written an idiotic article against the communists, and that Comrade Heckert and Brandler saved the situation.</p>
<p>Comrades, I will not agree to have this order of the Salvation of the Unions pinned on my breast; I will not accept to characterise Masloff’s action as criminal and damnable without first saying that the unionists are partly responsible lor it. We must divide the blame between both sides, if we wish to be just. The fault of the Party is that it did not realise that this policy would make for conflicts if we did not carry on sufficient preparatory work in the unions. We relied upon it that the Communists in the union would to the work. What happened was that our Unionist friends fought against the formation of factions and our Party comrades let the thing drag without any work. That is why it came to such conflicts with the union. Luckily, we were able to reach an agreement at the union Congress at the beginning of October and to create a basis for harmonious cooperation in the future. But many other Communist Parties have followed this bad example of not forming cells within the Unions.</p>
<p>I would like to mention especially two parties that have been guilty of this omission. First the French Party which in spite of its promises of last year to become active in the C.G.T.U., to build cells within that Federation, did nothing till the events came to a. point when the split was accomplished and the French Trade Union movement became a perfect muddle. At its Congress in Marseilles, the French Party had the opportunity of gaining the leadership of the revolutionary movement in France if it had followed the advice which had been given it, namely, to create a program which would unite all revolutionary forces. The French Party did not do this; nothing was said at the Congress as to what the Communists should do in the Trade Unions; Comrade Magoux who has since been expelled is not a little responsible for the crisis in the French Party. This should be a lesson to us for the future. When a Party takes a stand on all questions before the working class, it will be possible to create closer connections between the leaders of the Unions and the Party as a result of which such people as Monmousseau and Monatte will become members of our Party, our Party will become a real proletarian organization and no one who does not base the policy of the Party on the proletariat will get the leadership. The old dissentions must be put an end to. The Comintern must use all its influence on the leaders of the Party and the C.G.T.U. to co-operate in the interests of the working class of France.</p>
<p>A word on Czecho-Slovakia. We found the same tendencies in the Czecho-Slovakian Party. It was primarily the Trade Union leaders in the Party who opposed the formation of cells. Many comrades said quite openly: Why cells? That only leads to trouble; it suffices when the leaders of the Trade Unions are Communists. But it must have become apparent to our Czechoslovakian comrades that tins did not suffice. Had they formed strong cells in the Unions a year ago, Tayerle would not hold today such a position as he does.</p>
<p>I believe that our bad experience in Germany, and the example of France and Czecho-Slovakia, will teach us in the future to pay more attention to the resolutions of previous Congresses.</p>
<p>A few words more on the German situation. We will not say that all our attempts to win the Trade Unions were good attempts. Comrade Lozowsky said this morning that tens of thousands of member; are leaving the agricultural organizations without the Party taking any action. There are other causes for this, however, than those Comrade Lozovsky advanced.</p>
<p>It is true that the German movement of the agricultural workers has lost hundreds of thousands of members. But the reason is that these organizations are led by a bureaucracy which does nothing but make “Socialist" politics, and the interests of the workers are subordinate to the interests of the social-democratic politicians. Since no one interested himself in the agricultural workers, these workers rebelled. Unorganized before the war, the agricultural workers in Germany had an organization of 800,000 workers after the revolution. At the highest period of its existence, the “Deutsche Landarbeiterverband” numbered 27,000 members; during the war this number fell to 3,000. This post-war organization was therefore something quite new, and the bureaucracy of the Federation made use of the organization to further its own interest.</p>
<p>We had already attempted to approach the agricultural workers in 1919. We formed a so-called Communist agricultural union. This was a complete failure. If the revolution had proceeded further, had we been able to do something in the interest of the agricultural workers, it would have been a different story. Since this was not the case, the Social Democrats kept the control of the agricultural workers organization in their own hands.</p>
<p>In the following years, hundreds of thousands left the organization. Our comrades were faced with the problem: should they reunite these working masses into a new organization led by Communists, but which would not be capable of fighting, or should we not be afraid that the Amsterdamers would use this as a new excuse for an offensive against the Communists, and would say, here you have another proof that the Communists are trying to split the Labor Unions.</p>
<p>Had we attempted to form a new organization at the time when we were not masters of the situation, the task would simply have been too great for us. I will not deny that we might have been more active in some questions. But our lack of strength on the one side, and the tremendous apparatus of the Amsterdamers on the other, makes it hard for us to undertake any action: there have been many cases when we have prevented a foolish action on the part of some impatient comrade only with difficulty.</p>
<p>At a time when class differences have become so great, when our problems are so difficult, it is inadvisable to undertake any action tor which the working class is unprepared. To gain influence over the working class we must possess a well organized apparatus, and not only that, but also the confidence of the large masses of the working class in our communist policy. I believe that I can say in the name of the Party that we will be letter prepared lor a fight in the next month because our Party is gaining the confidence of ever larger masses of the proletariat. The Party can undertake greater actions now, because it has the broad masses which sympathise with it, and possesses an apparatus capable of leading a movement.</p>
<p>But we can offer no panacea. I wish to underline what Comrade Lozovsky said this morning, for every country we need a Trade Union programme which corresponds with the peculiar conditions of that country; we must state our task clearly so that the masses will understand us. We also need a different policy for every industrial group, often for every union, and if Comrade Carr allows, I will take two more minutes to explain this.</p>
<p>In Germany, for instance, we can organize the building trades for action. When we control a whole section, we can defeat the employers who are not yet strongly entrenched, not yet organized all over the country; the situation is quite different among the railroad workers. There are over a million workers among the railroad employers. But we are opposed by all the powers of the State. It has created laws to suppress the workers. We could tell the Building Trade workers: Break off with Päplow; we will build our own organization and fight the employers for better conditions.</p>
<p>If we attempt the same with the railways, we will surely be defeated because we shall be opposed by the whole power of the State. The State can defeat us and throw all the revolution elements at once out of employment. In this way, we lost almost 2,000 of our best comrades last year.</p>
<p>And just as we require different tactics for the building workers than for the railroad workers, so we require different methods for the other organizations. Among the metal workers, for instance, we have progressed so far, that the Dissmanites do not dare any longer to expel us as a body, because we posses almost half the membership and the opposition would be too great. Among the agricultural workers, we do not know the policy of the Amsterdamers. It seems as if we should proceed with the formation of a new organization, because we cannot tolerate that the gulf be widened.</p>
<p>In closing my speech, allow me to make the following recommendations: First, that all Communist Parties must proceed to the creation of cells and carry out the decisions of the Second and Third World Congresses; second, to create a program of action for every group of industry which will permit us conduct our struggle as the circumstances require; third, to forbid our comrades, in the various revolutionary organizations or in dual Trade Union organizations, to fight each other and thereby afford great joy to our enemies.</p>
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MIA > Archive > Fritz Heckert
F. Heckert
Discussion
The Tasks off the Communists
in the Trade Union Movement
(December 1922)
From International Press Correspondence, Vol. 2 No. 116, 22 December 1922, pp. 965–966.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2021). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
Comrades, Comrade Lozovsky told us this morning we must adopt a clear, unequivocal policy on the trade union question; he warned us especially against precipitate policy and advised us to reject any tactics which might lead to a split in the trade unions. He stated this very clearly. He said: If we had accepted the slogan of splitting the trade unions, or in anyway acquiesced in it, it would have meant destruction for the whole Communist movement. I also believe that we communists would have been guilty of the greatest error if we had propagated the splitting of the trade unions, or made any concessions to those elements that want to bring about such a split. I hope that this Congress will express clearly that every splitting tendency must be fought ruthlessly. It is absolutely necessary to show to the working class that we are for unity of the trade unions, if we are to carry on any serious propaganda for the United Front. We would make ourselves ridiculous before, yea, despised by the whole working class if we were to fight for the United Front and sympathise at the same time with the splitters.
However, in many countries, the trade unions have already been split, not only just now by the Amsterdamers, but because parallel organizations existed in those trades before and during the war. At the last Congress we had put before our comrades that it was their task to work in those dual organizations for union. Our communist comrades have not done all they could in this line. In fact, in all countries where the trade unions are split, the communists, instead of fighting for one common goal, have often opposed one another. I would therefore like to say this: every communist who does not support other communists, who are active in some other organizations, helps the reformists and those who want to break up the trade union movement. It is therefore our first duty as communists to eliminate all our little differences and to work together for a common goal. I absolutely admire our Italian comrades who have brought it about in their organization that their members understand that they must be active even in Fascist organizations, that even there we must create our cells.
The policy of cell formation has been much attacked even after the Third World Congress. In the German Party, for instance, there was quite a conflict on this point. There was a whole group of comrades who declared that cells were bad, and there developed among those comrades a liquidating tendency which purposed to destroy the whole trade union work of the Comintern and the whole international communist trade union movement. We have opposed these elements. This tendency was the cause of the Friesland crisis. We have expelled those people from our organizations and conducted a decisive fight to realise the unity of all revolutionary comrades. Naturally there have been unnecessary conflicts in this struggle; many a communist did not speak or act wisely enough: But it does not suffice to deal with the opposition to so-called revolutionary unions in our Party with a few words, as Comrade Lozovsky did when he declared that Comrade Masloff had acted very foolishly and written an idiotic article against the communists, and that Comrade Heckert and Brandler saved the situation.
Comrades, I will not agree to have this order of the Salvation of the Unions pinned on my breast; I will not accept to characterise Masloff’s action as criminal and damnable without first saying that the unionists are partly responsible lor it. We must divide the blame between both sides, if we wish to be just. The fault of the Party is that it did not realise that this policy would make for conflicts if we did not carry on sufficient preparatory work in the unions. We relied upon it that the Communists in the union would to the work. What happened was that our Unionist friends fought against the formation of factions and our Party comrades let the thing drag without any work. That is why it came to such conflicts with the union. Luckily, we were able to reach an agreement at the union Congress at the beginning of October and to create a basis for harmonious cooperation in the future. But many other Communist Parties have followed this bad example of not forming cells within the Unions.
I would like to mention especially two parties that have been guilty of this omission. First the French Party which in spite of its promises of last year to become active in the C.G.T.U., to build cells within that Federation, did nothing till the events came to a. point when the split was accomplished and the French Trade Union movement became a perfect muddle. At its Congress in Marseilles, the French Party had the opportunity of gaining the leadership of the revolutionary movement in France if it had followed the advice which had been given it, namely, to create a program which would unite all revolutionary forces. The French Party did not do this; nothing was said at the Congress as to what the Communists should do in the Trade Unions; Comrade Magoux who has since been expelled is not a little responsible for the crisis in the French Party. This should be a lesson to us for the future. When a Party takes a stand on all questions before the working class, it will be possible to create closer connections between the leaders of the Unions and the Party as a result of which such people as Monmousseau and Monatte will become members of our Party, our Party will become a real proletarian organization and no one who does not base the policy of the Party on the proletariat will get the leadership. The old dissentions must be put an end to. The Comintern must use all its influence on the leaders of the Party and the C.G.T.U. to co-operate in the interests of the working class of France.
A word on Czecho-Slovakia. We found the same tendencies in the Czecho-Slovakian Party. It was primarily the Trade Union leaders in the Party who opposed the formation of cells. Many comrades said quite openly: Why cells? That only leads to trouble; it suffices when the leaders of the Trade Unions are Communists. But it must have become apparent to our Czechoslovakian comrades that tins did not suffice. Had they formed strong cells in the Unions a year ago, Tayerle would not hold today such a position as he does.
I believe that our bad experience in Germany, and the example of France and Czecho-Slovakia, will teach us in the future to pay more attention to the resolutions of previous Congresses.
A few words more on the German situation. We will not say that all our attempts to win the Trade Unions were good attempts. Comrade Lozowsky said this morning that tens of thousands of member; are leaving the agricultural organizations without the Party taking any action. There are other causes for this, however, than those Comrade Lozovsky advanced.
It is true that the German movement of the agricultural workers has lost hundreds of thousands of members. But the reason is that these organizations are led by a bureaucracy which does nothing but make “Socialist" politics, and the interests of the workers are subordinate to the interests of the social-democratic politicians. Since no one interested himself in the agricultural workers, these workers rebelled. Unorganized before the war, the agricultural workers in Germany had an organization of 800,000 workers after the revolution. At the highest period of its existence, the “Deutsche Landarbeiterverband” numbered 27,000 members; during the war this number fell to 3,000. This post-war organization was therefore something quite new, and the bureaucracy of the Federation made use of the organization to further its own interest.
We had already attempted to approach the agricultural workers in 1919. We formed a so-called Communist agricultural union. This was a complete failure. If the revolution had proceeded further, had we been able to do something in the interest of the agricultural workers, it would have been a different story. Since this was not the case, the Social Democrats kept the control of the agricultural workers organization in their own hands.
In the following years, hundreds of thousands left the organization. Our comrades were faced with the problem: should they reunite these working masses into a new organization led by Communists, but which would not be capable of fighting, or should we not be afraid that the Amsterdamers would use this as a new excuse for an offensive against the Communists, and would say, here you have another proof that the Communists are trying to split the Labor Unions.
Had we attempted to form a new organization at the time when we were not masters of the situation, the task would simply have been too great for us. I will not deny that we might have been more active in some questions. But our lack of strength on the one side, and the tremendous apparatus of the Amsterdamers on the other, makes it hard for us to undertake any action: there have been many cases when we have prevented a foolish action on the part of some impatient comrade only with difficulty.
At a time when class differences have become so great, when our problems are so difficult, it is inadvisable to undertake any action tor which the working class is unprepared. To gain influence over the working class we must possess a well organized apparatus, and not only that, but also the confidence of the large masses of the working class in our communist policy. I believe that I can say in the name of the Party that we will be letter prepared lor a fight in the next month because our Party is gaining the confidence of ever larger masses of the proletariat. The Party can undertake greater actions now, because it has the broad masses which sympathise with it, and possesses an apparatus capable of leading a movement.
But we can offer no panacea. I wish to underline what Comrade Lozovsky said this morning, for every country we need a Trade Union programme which corresponds with the peculiar conditions of that country; we must state our task clearly so that the masses will understand us. We also need a different policy for every industrial group, often for every union, and if Comrade Carr allows, I will take two more minutes to explain this.
In Germany, for instance, we can organize the building trades for action. When we control a whole section, we can defeat the employers who are not yet strongly entrenched, not yet organized all over the country; the situation is quite different among the railroad workers. There are over a million workers among the railroad employers. But we are opposed by all the powers of the State. It has created laws to suppress the workers. We could tell the Building Trade workers: Break off with Päplow; we will build our own organization and fight the employers for better conditions.
If we attempt the same with the railways, we will surely be defeated because we shall be opposed by the whole power of the State. The State can defeat us and throw all the revolution elements at once out of employment. In this way, we lost almost 2,000 of our best comrades last year.
And just as we require different tactics for the building workers than for the railroad workers, so we require different methods for the other organizations. Among the metal workers, for instance, we have progressed so far, that the Dissmanites do not dare any longer to expel us as a body, because we posses almost half the membership and the opposition would be too great. Among the agricultural workers, we do not know the policy of the Amsterdamers. It seems as if we should proceed with the formation of a new organization, because we cannot tolerate that the gulf be widened.
In closing my speech, allow me to make the following recommendations: First, that all Communist Parties must proceed to the creation of cells and carry out the decisions of the Second and Third World Congresses; second, to create a program of action for every group of industry which will permit us conduct our struggle as the circumstances require; third, to forbid our comrades, in the various revolutionary organizations or in dual Trade Union organizations, to fight each other and thereby afford great joy to our enemies.
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<h2>Fritz Heckert</h2>
<h4>The Labor Movement</h4>
<h1>The Union Congress at Essen</h1>
<h3>(7 October 1922)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1922/v02n075-sep-01-1922-Inprecor.pdf" target="new">Vol. 2 No. 89</a>, 17 October 1922, pp. 673–674.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2020). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
<hr class="infobot" size="1" noshade="noshade">
<p class="fst">The <em>Union of Hand and Brain Workers of Germany</em> convened its 2nd congress at Essen from the 1st to 5th October, in order to consider the work accomplished in the past year and to define its attitude to the tasks which as a revolutionary workers’ movement are to be fulfilled by it in the coming months.</p>
<p>The congress was an exceedingly instructive one, for it showed that the workers of this organization have learnt much since their first congress in Halle in the year 1921, and that they are minded to draw the necessary conclusions from these lessons. At the first congress of the R.I.L.U. the representatives of the unions now united in the <em>Union of Hand and Brain Workers</em> adopted a position which was sharply in opposition to the principles and the tactics of the R.I.L.U.</p>
<p>The first congress of the R.I.L.U. was thus compelled to submit some questions to the members of the <em>Union</em> at their congress in Halle to which clear, unequivocal replies were demanded. The <em>Union</em> had to decide whether it would work on the basis of the decisions reached at the first world congress of the R.I.L.U. in Moscow in order thereby to become affiliated to the R.I.L.U., or to reject the principles and decisions of the first world congress and place itself outside this world union of the revolutionary proletariat.</p>
<p>The Halle congress disavowed the attitude of the Union’s delegates at the Moscow congress and declared in favor of affiliation to the R.I.L.U. The resolution however, in which this declaration was embodied did not signify unconditional acceptance of the conditions, but was in its content a concession to the syndicalist and federalist tendencies prevalent in the union. The ambiguous character of the resolution rendered it possible for a number of members of the Union, in the course of the following months to undertake to correct the decisions of the first world congress and to aver again and again that the principles and tactics of the R.I.L.U. did not correspond to the experiences and necessities of the class struggle; that a correction of the decisions of the first world congress in the direction of the opinions represented by the Union delegates at this congress, must be undertaken at the 2nd world congress, otherwise the union would have no interest in membership of the R.I.L.U.</p>
<p>This attitude of a number of comrades in the Union led to continuous differences with the comrades of the German trade union opposition, and instead of dose cooperation-between the Union and the latter there were often lively disputes injurious to their common aims.</p>
<p>The second congress of the Union at Essen, therefore had to test whether the majority of the members would call for a re-examination of the decisions reached in Halle, or whether, from the experiences won in practical struggle, they had drawn the knowledge to set aside the deficiencies of the organization, and to make out of the union a trade union, which, standing entirely on the basis of the R.I.L.U., shall strive firmly and steadfastly side by side with the trade union opposition for the common objective. The congress has made this thing clear and it can be joyfully recorded that the result of the congress means an essential step forward compared with the previous conditions in the Union.</p>
<p>The chief differences still alive in the Union were: 1. The attitude towards the individual struggles of trade unions. 2. The question whether the union shall be a universal organization embracing workers of all categories and conducting not only the economic, but also the political struggle. 3. In what relation the Union shall stand to the reformist unions and their actions. 4. The question of the structure of the organization, the nature of the contributions and of the fighting fund of the Union. 5. The relation of the Union to the opposition within the old trade unions.</p>
<p>In order that these questions should not be passed over, the Executive Committee of the R.I.L.U. wrote a letter to the congress of the Union of Hand and Brain Workers, in which it dealt exhaustively with these disputed questions and required from the congress that it should plainly and clearly define its attitude upon these points.</p>
<p>Many an old unionist disliked the idea that it should so formulate its opinions that they could be taken as a dear avowal either for or against the principles of the R.I.L.U. The spirit, however, which dominated the overwhelming majority of the congress delegates, was, under all circumstances, to create clarity and under no circumstances to break connections with the R.I.L.U. They desired nothing more eagerly than the consolidation of the organization and the setting up of good relations for united activity with the trade union opposition. It was therefore easy to submit all problems to the congress and to formulate dear answers to these questions. The representative of the Communist Party, whose remarks were followed with the greatest attention, was therefore able to expound io the congress what deficiencies were to be noted in the tactics of the Union and in the structure of the organization, in what way these were to be removed, the Union itself rendered more fit for the struggle, and friendly and comradely relations established with the trade union opposition.</p>
<p>On the first item of the agenda an attitude was adopted towards the trade union situation and to the tasks of the union in the revolutionary movement of the proletariat Upon these questions it was unanimously agreed that every attempt to separate the political from the economic struggle of the worker means a weakening of the working class and is counter revolutionary; that the proletariat must strive to concentrate its fight against the well-organized bourgeoisie, and that only the concentrated class power of the proletariat is capable of overcoming the bourgeoisie.</p>
<p>From this standpoint the Union declared that political neutrality is not permissible for a revolutionary worker, that the union should therefore support every revolutionary action and shall take active put in the struggle for the realization of all demands in the interests of the workers. The Union declared that its immediate and most pressing tasks were: the building up and extension of its organization, based upon workshop organizations according to the branch of industry and economic area; increased struggle against indifference; the publication of clearly written revolutionary trade union literature; the formation of a strong fighting fund; support of the revolutionary opposition in the Amsterdam unions; struggle against the policy of cooperation with the employers; increasing of real wages; defence of the eight hour day; extension of the rights of the workshop councils; struggle against high prices, and for the control of production, etc.</p>
<p>Another resolution determined the relationship between the party and the union, and a sharp distinction was made against the syndicalist and anarchist elements. This resolution declares: that the proletarian class struggle has an international character and that international action can only be carried out provided there is international discipline, Autonomy of individual organizations or countries within an International means the bankruptcy of every workers’ movement; this is proved by the yellow Amsterdam international. In a revolutionary trade union organization the struggle must be conducted without regard to the interests of the capitalists. It can only be carried out successfully in connection with the revolutionary political organization of the proletariat The conquest of political power, i.e., the dictatorship of the proletariat, is the prerequisite for the final victory of the proletariat in the fight for its emancipation from economic slavery.</p>
<p>The Union recognized that the Communist Party points out the aim in this struggle and that it must take the lead in the whole struggle for the achievement of this aim. It therefore becomes necessary to establish close contact between the revolutionary trade unions and the Communist Party.</p>
<p>The Union expressly declares it to be its duty as a member of the Red international of Labor Unions, 1. to subordinate itself to international discipline, 2. to carry out the congress decisions of the R.I.L.U. and 3. to proceed unitedly in all actions with the revolutionary organizations as well as with the Communist Party.</p>
<p>In order to render possible and to facilitate this common action, the union proposes the formation of Revolutionary Workers’ Committees of all revolutionary proletarian organizations throughout the country. The purpose of these revolutionary committees shall be to take a stand on all economic and political questions which interest the proletariat, and to establish close contact between these organizations.</p>
<p>An attempt is made in the newly drawn-up statute to create an organizatory basis corresponding to the decisions of the congress relating to principles and tactics which will facilitate the fulfilment of the tasks laid down. In future the Union will organize the workers affiliated to it into industrial groups according to the principle of <em>one industry, one union</em>. The industrial groups retain the right of independent management, conducting of wage struggles, conclusion of collective agreements and establishing of international connections.</p>
<p>In order to simplify the managing apparatus, a unified system of contributions will be introduced for industrial groups. In order to conduct struggles unitedly and energetically a central fighting fund will be created.</p>
<p>It must be noted that the overwhelming majority of the congress recognized that the future tasks of the organization can only be fulfilled provided the members make greater financial sacrifices. The minimum weekly contribution was therefore fixed at the amount of half an hours wages.</p>
<p>At the conclusion of the congress, the chairman summarized the results of the congress and said among other things: “We recognize the decisions of the R.I.L.U. upon the tactics of revolutionizing the trade unions as binding for us. We shall offer the most determined struggle against all reformist and anarcho-syndicalist tendencies. We will support the revolutionary opposition in the reformist trade unions in their hard struggle with all our power, and shall establish fraternal relationships with them.”</p>
<p>All the decisions of the congress were essentially influenced by the intensive work of the representative of the Red International of Labor Unious which was gratefully welcomed by the delegates. Through its assistance in clearing up many questions of the proletarian class struggle and by its assistance in the improvement of the management of the organization the Red International of Labor Unions has shown itself as an organization adequate for the international revolutionary tasks.</p>
<p>In six days of strenuous labor an enormous amount of work was accomplished and it can be recorded with joy that the delegates present at the congress fulfilled the duties entrusted to them with close attention and admirable devotion. This cannot be said of most of the trade union conferences which have taken place this year in Germany.</p>
<p>The results of the congress are a great advance compared with the results of the congress at Halle. The experience of the 12 months which separate the two congresses have shown to the Union that many old views must, in the interest of the revolutionary movement, be thrown overboard, and that it is necessary to root out relentlessly all failings in the organisation.</p>
<p>The congress at Essen has rendered the Union capable of carrying out the greater tasks of the coming months.</p>
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MIA > Archive > Fritz Heckert
Fritz Heckert
The Labor Movement
The Union Congress at Essen
(7 October 1922)
From International Press Correspondence, Vol. 2 No. 89, 17 October 1922, pp. 673–674.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2020). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
The Union of Hand and Brain Workers of Germany convened its 2nd congress at Essen from the 1st to 5th October, in order to consider the work accomplished in the past year and to define its attitude to the tasks which as a revolutionary workers’ movement are to be fulfilled by it in the coming months.
The congress was an exceedingly instructive one, for it showed that the workers of this organization have learnt much since their first congress in Halle in the year 1921, and that they are minded to draw the necessary conclusions from these lessons. At the first congress of the R.I.L.U. the representatives of the unions now united in the Union of Hand and Brain Workers adopted a position which was sharply in opposition to the principles and the tactics of the R.I.L.U.
The first congress of the R.I.L.U. was thus compelled to submit some questions to the members of the Union at their congress in Halle to which clear, unequivocal replies were demanded. The Union had to decide whether it would work on the basis of the decisions reached at the first world congress of the R.I.L.U. in Moscow in order thereby to become affiliated to the R.I.L.U., or to reject the principles and decisions of the first world congress and place itself outside this world union of the revolutionary proletariat.
The Halle congress disavowed the attitude of the Union’s delegates at the Moscow congress and declared in favor of affiliation to the R.I.L.U. The resolution however, in which this declaration was embodied did not signify unconditional acceptance of the conditions, but was in its content a concession to the syndicalist and federalist tendencies prevalent in the union. The ambiguous character of the resolution rendered it possible for a number of members of the Union, in the course of the following months to undertake to correct the decisions of the first world congress and to aver again and again that the principles and tactics of the R.I.L.U. did not correspond to the experiences and necessities of the class struggle; that a correction of the decisions of the first world congress in the direction of the opinions represented by the Union delegates at this congress, must be undertaken at the 2nd world congress, otherwise the union would have no interest in membership of the R.I.L.U.
This attitude of a number of comrades in the Union led to continuous differences with the comrades of the German trade union opposition, and instead of dose cooperation-between the Union and the latter there were often lively disputes injurious to their common aims.
The second congress of the Union at Essen, therefore had to test whether the majority of the members would call for a re-examination of the decisions reached in Halle, or whether, from the experiences won in practical struggle, they had drawn the knowledge to set aside the deficiencies of the organization, and to make out of the union a trade union, which, standing entirely on the basis of the R.I.L.U., shall strive firmly and steadfastly side by side with the trade union opposition for the common objective. The congress has made this thing clear and it can be joyfully recorded that the result of the congress means an essential step forward compared with the previous conditions in the Union.
The chief differences still alive in the Union were: 1. The attitude towards the individual struggles of trade unions. 2. The question whether the union shall be a universal organization embracing workers of all categories and conducting not only the economic, but also the political struggle. 3. In what relation the Union shall stand to the reformist unions and their actions. 4. The question of the structure of the organization, the nature of the contributions and of the fighting fund of the Union. 5. The relation of the Union to the opposition within the old trade unions.
In order that these questions should not be passed over, the Executive Committee of the R.I.L.U. wrote a letter to the congress of the Union of Hand and Brain Workers, in which it dealt exhaustively with these disputed questions and required from the congress that it should plainly and clearly define its attitude upon these points.
Many an old unionist disliked the idea that it should so formulate its opinions that they could be taken as a dear avowal either for or against the principles of the R.I.L.U. The spirit, however, which dominated the overwhelming majority of the congress delegates, was, under all circumstances, to create clarity and under no circumstances to break connections with the R.I.L.U. They desired nothing more eagerly than the consolidation of the organization and the setting up of good relations for united activity with the trade union opposition. It was therefore easy to submit all problems to the congress and to formulate dear answers to these questions. The representative of the Communist Party, whose remarks were followed with the greatest attention, was therefore able to expound io the congress what deficiencies were to be noted in the tactics of the Union and in the structure of the organization, in what way these were to be removed, the Union itself rendered more fit for the struggle, and friendly and comradely relations established with the trade union opposition.
On the first item of the agenda an attitude was adopted towards the trade union situation and to the tasks of the union in the revolutionary movement of the proletariat Upon these questions it was unanimously agreed that every attempt to separate the political from the economic struggle of the worker means a weakening of the working class and is counter revolutionary; that the proletariat must strive to concentrate its fight against the well-organized bourgeoisie, and that only the concentrated class power of the proletariat is capable of overcoming the bourgeoisie.
From this standpoint the Union declared that political neutrality is not permissible for a revolutionary worker, that the union should therefore support every revolutionary action and shall take active put in the struggle for the realization of all demands in the interests of the workers. The Union declared that its immediate and most pressing tasks were: the building up and extension of its organization, based upon workshop organizations according to the branch of industry and economic area; increased struggle against indifference; the publication of clearly written revolutionary trade union literature; the formation of a strong fighting fund; support of the revolutionary opposition in the Amsterdam unions; struggle against the policy of cooperation with the employers; increasing of real wages; defence of the eight hour day; extension of the rights of the workshop councils; struggle against high prices, and for the control of production, etc.
Another resolution determined the relationship between the party and the union, and a sharp distinction was made against the syndicalist and anarchist elements. This resolution declares: that the proletarian class struggle has an international character and that international action can only be carried out provided there is international discipline, Autonomy of individual organizations or countries within an International means the bankruptcy of every workers’ movement; this is proved by the yellow Amsterdam international. In a revolutionary trade union organization the struggle must be conducted without regard to the interests of the capitalists. It can only be carried out successfully in connection with the revolutionary political organization of the proletariat The conquest of political power, i.e., the dictatorship of the proletariat, is the prerequisite for the final victory of the proletariat in the fight for its emancipation from economic slavery.
The Union recognized that the Communist Party points out the aim in this struggle and that it must take the lead in the whole struggle for the achievement of this aim. It therefore becomes necessary to establish close contact between the revolutionary trade unions and the Communist Party.
The Union expressly declares it to be its duty as a member of the Red international of Labor Unions, 1. to subordinate itself to international discipline, 2. to carry out the congress decisions of the R.I.L.U. and 3. to proceed unitedly in all actions with the revolutionary organizations as well as with the Communist Party.
In order to render possible and to facilitate this common action, the union proposes the formation of Revolutionary Workers’ Committees of all revolutionary proletarian organizations throughout the country. The purpose of these revolutionary committees shall be to take a stand on all economic and political questions which interest the proletariat, and to establish close contact between these organizations.
An attempt is made in the newly drawn-up statute to create an organizatory basis corresponding to the decisions of the congress relating to principles and tactics which will facilitate the fulfilment of the tasks laid down. In future the Union will organize the workers affiliated to it into industrial groups according to the principle of one industry, one union. The industrial groups retain the right of independent management, conducting of wage struggles, conclusion of collective agreements and establishing of international connections.
In order to simplify the managing apparatus, a unified system of contributions will be introduced for industrial groups. In order to conduct struggles unitedly and energetically a central fighting fund will be created.
It must be noted that the overwhelming majority of the congress recognized that the future tasks of the organization can only be fulfilled provided the members make greater financial sacrifices. The minimum weekly contribution was therefore fixed at the amount of half an hours wages.
At the conclusion of the congress, the chairman summarized the results of the congress and said among other things: “We recognize the decisions of the R.I.L.U. upon the tactics of revolutionizing the trade unions as binding for us. We shall offer the most determined struggle against all reformist and anarcho-syndicalist tendencies. We will support the revolutionary opposition in the reformist trade unions in their hard struggle with all our power, and shall establish fraternal relationships with them.”
All the decisions of the congress were essentially influenced by the intensive work of the representative of the Red International of Labor Unious which was gratefully welcomed by the delegates. Through its assistance in clearing up many questions of the proletarian class struggle and by its assistance in the improvement of the management of the organization the Red International of Labor Unions has shown itself as an organization adequate for the international revolutionary tasks.
In six days of strenuous labor an enormous amount of work was accomplished and it can be recorded with joy that the delegates present at the congress fulfilled the duties entrusted to them with close attention and admirable devotion. This cannot be said of most of the trade union conferences which have taken place this year in Germany.
The results of the congress are a great advance compared with the results of the congress at Halle. The experience of the 12 months which separate the two congresses have shown to the Union that many old views must, in the interest of the revolutionary movement, be thrown overboard, and that it is necessary to root out relentlessly all failings in the organisation.
The congress at Essen has rendered the Union capable of carrying out the greater tasks of the coming months.
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<h2>Fritz Heckert</h2>
<h4>Communist Recruiting Week</h4>
<h1>The Aims of Recruiting Week</h1>
<h3>(1 November 1921)</h3>
<hr class="infotop" size="1" noshade="noshade">
<p class="info">From <strong>International Press Correspondence</strong>, <a href="../../../../history/international/comintern/inprecor/1921/v01n04-nov-01-1921-inprecor.pdf" target="new">Vol. I No. 4</a>, 1 November 1921, pp. 33–34.<br>
Transcribed & marked up by <a href="../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Marxists’ Internet Archive</strong>.<br>
<span class="info">Public Domain:</span> Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.</p>
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<p class="fst">With the motto “Go to the Masses’, the Communist International summons all its members to agitate during the week of November 3rd–10th among the great masses of the urban and rural proletariat, as yet unresponsive to Communism, and to rouse them to the struggle for freedom. The Communist International is undertaking for the first time a general mobilization throughout the world, wherever proletarians are groaning under the heel of the oppressor. The workers are becoming more and more disillusioned concerning the “glorious times promised to them in the large capitalist countries in return for their participation in the World-War adventure. The policy of the capitalist class has resulted in an overwhelming wave of unemployment, a staggering rise in the cost of living and an imperilling of the worker’s existence. If the workers try to resist, if they try to organize in self-defense, if they attempt to use the strike as a weapon, if they gather in demonstrations, the bestial bourgeoisie uses every means to strike them down, and calls this assassination “Protection of Rights’ and “Establishment of Order”. Influential labour-leaders have not only supported these measures of the bourgeoisie, but in many countries they alone have made them possible. During our Recruiting Week we must demonstrate to the workers that the continuation of capitalism, which they have tolerated until now, can only result in the ruin of the working class and of the economic life of the world.</p>
<p>Our Recruiting Week, therefore, cannot he likened to the Recruiting Weeks of the Social Democratic Parties, which are only organized to win party-members or readers for their organs. We will also do everything possible to gain new members for the Communist partis and to increase the number of subscribers to the Communist periodicals. A party organization strong in members and a widely-spread communist press are necessary for the victory of the proletariat. The increasing of the membership cannot create, however, what the Recruiting Week should bring about. The composition of the Communist Party must be altogether different in quality from that of the Socialist Parties. The Communist Parties are parties of action, their members must at all hours be ready to make the greatest sacrifice for the cause of the proletariat ...</p>
<p>We can say therefore, that our Recruiting Week depends especially on the spiritual contact of the Party with the large proletarian masses and also on the convincing of the workers remaining outside of the Party that the Communist International is their true leader.</p>
<p>Keeping in mind the principal aim of Communism, our propagandists must come in close contact with the masses, and in connection with the daily struggles and needs of the workers show them the way leading out of capitalist slavery into freedom. The struggle for the final aim of Communism is only organized during the general struggle against life’s daily troubles. The spiritually backward proletarian is unable to realize that the struggle to free himself from these troubles leads to the overthrow of capitalism and the setting up of lhe dictatorship of the proletariat. To the ordinary workers reared in the oppressive capitalist system and lacking political opinions, the Communist aim seems so enormous that he cannot grasp it. and considers it unattainable and therefore utopian. The worker will learn to fight implacably for the Communist aim only when he realizes that, in the struggle for his existence, minor reforms cannot free him, and that he must give a larger form to the struggle for the freeing of the workers, and must use more effective means. The purpose of the Communist Party is to lead the workers in these unavoidable struggles in such a way that they will more easily find their way and suffer less defeat. In the Recruiting Week when we speak at meetings, when we peak with our colleagues, when we go from house to agitate, when we write in the periodicals, we will tell our suffering and oppressed class comrades what to do to succeed in the struggle against the doubles and needs of every day. This is not difficult. In the last few weeks the world economic crisis has become more acute in all countries, and has brought untold suffering to the working class. The world economic crisis appears under various aspects in different countries. In one country it has been an increase of unemployment, in another the tremendous rise in the cost of living, or both. The capitalist are trying to throw the burden of this world crisis on the working men. It is easy to make this clear to the workers.</p>
<p>When capitalist production does not bring sufficient profit, the capitalist uses every means to guard himself against loss. He throws the workers pitilessly out into the street. He raises the cost of living. He beats down salaries, and for this purpose he creates lock outs, mobilizes strike-breakers and organizes White-Guard bands whom he permits to murder working men and to destroy workers’ enterprises in order to intimidate the workers. The capitalist seeks to increase the hours of work or the efficiency of labor, in case wages remain the same. Protection for the workers is made impossible. The most indispensable articles are raised in price, the production of goods which do not bring big profits is stopped. We see this best in the failure to relieve the shortage in dwellings. Housing accommodations for the lower classes are neglected. Hospitals and nurseries are closed. Invalids, pensioners, and cripples are abandoned. Through the most subtle systems of taxation a considerable part of the workman’s income is stolen. In order to carry this out more easily the capitalist buys the periodicals, the newspapers, controls literary production and employs thousands of agitators to influence the workers in a manner favourable to his own interests. The capitalist strives to demoralize and to destroy the workers’ organizations, especially the labor unions. With a subtle system of swindle and lies capitalism tries to eliminate these organizations from the struggle against it. When it does not succeed in this, it tries to destroy them by means of force. Labor leaders are bought by the capitalist, an army of spies is suborned among the working class. Through special favours to single working men or groups of workers it is sought to split up the working masses. Those who are working are incited against the unemployed and vice versa. All these things can serve well in teaching the workmen. The majority of our class comrades do not understand the relation between these things. They live through the troubles of their time, helpless; they feel as if they are astray in a primeval forest. Their perception is often warped by the organizations on whose protection they depend. This does not necessarily happen because of the malice of the leaders of these organizations. It takes place naturally because most of the unions do not grasp the situation or because they are frightened by the enormity of the task. Our agitators must bear this situation in mind. They must therefore not try to blame all these faults of the labor organizations on the criminal leadership of these organizations. The faith of the working men in the justice of communism will not be strengthened through an continual nagging of the workers about their troubles and their bad leadership, but rather through our armor-plated argument, through our good advice, through the intelligent proposals we suggest to them to help them in their need, in our readiness to fight at the head of the workers even in the most insignificant struggles against daily suffering.</p>
<p>The Recruiting Week must also give us a better conception of the psychology of the workers. We must learn the ways they react to the troubles which press upon them. We must be able to judge the value of their arguments against our doctrines and our tactics. We must learn to find the cardinal point in the working man’s soul, and in his understanding, in order to raise him from his lethargy and to turn him from an unfeeling follower or even an enemy into an active, energetic element in the proletarian class struggle.</p>
<p>The results of our Recruiting Week need not show themselves in an immediate increase in the party membership or of subscribers of our periodicals. They must show themselves in the spirit which animates the workers in their struggles, and their reaction toward the Communist watch-words and to the directing of the struggle by our party. If there are no such results that will prove that our Party has not worked well. Will that show the deficiency of the Party itself and not the backwardness of the masses? The Recruiting Week will be the acid test of the ability of our organization, after a unified campaign, on an national and international scale, to interest the workmen in Communism and to mobilize them for the class struggle. The deficiencies in the organization which will be noted during the Recruiting Week or when the results are measured, must be removed.</p>
<p>Every member of the Party has not only the opportunity but also the duty to show during Recruiting Week that he has fully earned the title of Communist. Everyone must help according to his ability, and everyone can help in the great work. In the Recruiting Week not only our own Party but the members of other workers’ parties can see whether we differ from the others only in revolutionary phrases or in purposeful work. Whoever impairs the success of Recruiting Week through idleness or bad propaganda harms this work not only immediately but permanently, because a failure of Recruiting Week will be a triumph to our opponents and will make our approach to the masses more difficult in the future. The aim of our Recruiting Week is limited; We must try not only to attain this goal but to surpass it. Every man to his post.</p>
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MIA > Archive > Fritz Heckert
Fritz Heckert
Communist Recruiting Week
The Aims of Recruiting Week
(1 November 1921)
From International Press Correspondence, Vol. I No. 4, 1 November 1921, pp. 33–34.
Transcribed & marked up by Einde O’Callaghan for the Marxists’ Internet Archive.
Public Domain: Marxists Internet Archive (2019). You may freely copy, distribute, display and perform this work; as well as make derivative and commercial works. Please credit “Marxists Internet Archive” as your source.
With the motto “Go to the Masses’, the Communist International summons all its members to agitate during the week of November 3rd–10th among the great masses of the urban and rural proletariat, as yet unresponsive to Communism, and to rouse them to the struggle for freedom. The Communist International is undertaking for the first time a general mobilization throughout the world, wherever proletarians are groaning under the heel of the oppressor. The workers are becoming more and more disillusioned concerning the “glorious times promised to them in the large capitalist countries in return for their participation in the World-War adventure. The policy of the capitalist class has resulted in an overwhelming wave of unemployment, a staggering rise in the cost of living and an imperilling of the worker’s existence. If the workers try to resist, if they try to organize in self-defense, if they attempt to use the strike as a weapon, if they gather in demonstrations, the bestial bourgeoisie uses every means to strike them down, and calls this assassination “Protection of Rights’ and “Establishment of Order”. Influential labour-leaders have not only supported these measures of the bourgeoisie, but in many countries they alone have made them possible. During our Recruiting Week we must demonstrate to the workers that the continuation of capitalism, which they have tolerated until now, can only result in the ruin of the working class and of the economic life of the world.
Our Recruiting Week, therefore, cannot he likened to the Recruiting Weeks of the Social Democratic Parties, which are only organized to win party-members or readers for their organs. We will also do everything possible to gain new members for the Communist partis and to increase the number of subscribers to the Communist periodicals. A party organization strong in members and a widely-spread communist press are necessary for the victory of the proletariat. The increasing of the membership cannot create, however, what the Recruiting Week should bring about. The composition of the Communist Party must be altogether different in quality from that of the Socialist Parties. The Communist Parties are parties of action, their members must at all hours be ready to make the greatest sacrifice for the cause of the proletariat ...
We can say therefore, that our Recruiting Week depends especially on the spiritual contact of the Party with the large proletarian masses and also on the convincing of the workers remaining outside of the Party that the Communist International is their true leader.
Keeping in mind the principal aim of Communism, our propagandists must come in close contact with the masses, and in connection with the daily struggles and needs of the workers show them the way leading out of capitalist slavery into freedom. The struggle for the final aim of Communism is only organized during the general struggle against life’s daily troubles. The spiritually backward proletarian is unable to realize that the struggle to free himself from these troubles leads to the overthrow of capitalism and the setting up of lhe dictatorship of the proletariat. To the ordinary workers reared in the oppressive capitalist system and lacking political opinions, the Communist aim seems so enormous that he cannot grasp it. and considers it unattainable and therefore utopian. The worker will learn to fight implacably for the Communist aim only when he realizes that, in the struggle for his existence, minor reforms cannot free him, and that he must give a larger form to the struggle for the freeing of the workers, and must use more effective means. The purpose of the Communist Party is to lead the workers in these unavoidable struggles in such a way that they will more easily find their way and suffer less defeat. In the Recruiting Week when we speak at meetings, when we peak with our colleagues, when we go from house to agitate, when we write in the periodicals, we will tell our suffering and oppressed class comrades what to do to succeed in the struggle against the doubles and needs of every day. This is not difficult. In the last few weeks the world economic crisis has become more acute in all countries, and has brought untold suffering to the working class. The world economic crisis appears under various aspects in different countries. In one country it has been an increase of unemployment, in another the tremendous rise in the cost of living, or both. The capitalist are trying to throw the burden of this world crisis on the working men. It is easy to make this clear to the workers.
When capitalist production does not bring sufficient profit, the capitalist uses every means to guard himself against loss. He throws the workers pitilessly out into the street. He raises the cost of living. He beats down salaries, and for this purpose he creates lock outs, mobilizes strike-breakers and organizes White-Guard bands whom he permits to murder working men and to destroy workers’ enterprises in order to intimidate the workers. The capitalist seeks to increase the hours of work or the efficiency of labor, in case wages remain the same. Protection for the workers is made impossible. The most indispensable articles are raised in price, the production of goods which do not bring big profits is stopped. We see this best in the failure to relieve the shortage in dwellings. Housing accommodations for the lower classes are neglected. Hospitals and nurseries are closed. Invalids, pensioners, and cripples are abandoned. Through the most subtle systems of taxation a considerable part of the workman’s income is stolen. In order to carry this out more easily the capitalist buys the periodicals, the newspapers, controls literary production and employs thousands of agitators to influence the workers in a manner favourable to his own interests. The capitalist strives to demoralize and to destroy the workers’ organizations, especially the labor unions. With a subtle system of swindle and lies capitalism tries to eliminate these organizations from the struggle against it. When it does not succeed in this, it tries to destroy them by means of force. Labor leaders are bought by the capitalist, an army of spies is suborned among the working class. Through special favours to single working men or groups of workers it is sought to split up the working masses. Those who are working are incited against the unemployed and vice versa. All these things can serve well in teaching the workmen. The majority of our class comrades do not understand the relation between these things. They live through the troubles of their time, helpless; they feel as if they are astray in a primeval forest. Their perception is often warped by the organizations on whose protection they depend. This does not necessarily happen because of the malice of the leaders of these organizations. It takes place naturally because most of the unions do not grasp the situation or because they are frightened by the enormity of the task. Our agitators must bear this situation in mind. They must therefore not try to blame all these faults of the labor organizations on the criminal leadership of these organizations. The faith of the working men in the justice of communism will not be strengthened through an continual nagging of the workers about their troubles and their bad leadership, but rather through our armor-plated argument, through our good advice, through the intelligent proposals we suggest to them to help them in their need, in our readiness to fight at the head of the workers even in the most insignificant struggles against daily suffering.
The Recruiting Week must also give us a better conception of the psychology of the workers. We must learn the ways they react to the troubles which press upon them. We must be able to judge the value of their arguments against our doctrines and our tactics. We must learn to find the cardinal point in the working man’s soul, and in his understanding, in order to raise him from his lethargy and to turn him from an unfeeling follower or even an enemy into an active, energetic element in the proletarian class struggle.
The results of our Recruiting Week need not show themselves in an immediate increase in the party membership or of subscribers of our periodicals. They must show themselves in the spirit which animates the workers in their struggles, and their reaction toward the Communist watch-words and to the directing of the struggle by our party. If there are no such results that will prove that our Party has not worked well. Will that show the deficiency of the Party itself and not the backwardness of the masses? The Recruiting Week will be the acid test of the ability of our organization, after a unified campaign, on an national and international scale, to interest the workmen in Communism and to mobilize them for the class struggle. The deficiencies in the organization which will be noted during the Recruiting Week or when the results are measured, must be removed.
Every member of the Party has not only the opportunity but also the duty to show during Recruiting Week that he has fully earned the title of Communist. Everyone must help according to his ability, and everyone can help in the great work. In the Recruiting Week not only our own Party but the members of other workers’ parties can see whether we differ from the others only in revolutionary phrases or in purposeful work. Whoever impairs the success of Recruiting Week through idleness or bad propaganda harms this work not only immediately but permanently, because a failure of Recruiting Week will be a triumph to our opponents and will make our approach to the masses more difficult in the future. The aim of our Recruiting Week is limited; We must try not only to attain this goal but to surpass it. Every man to his post.
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<p class="title">Socialism in Africa</p>
<h1>Biography : Julius Kambarage Nyerere</h1>
<img src="../../../glossary/people/n/pics/nyerere-julius.jpg" align="left" hspace="10" border="1" alt="Nyerere">
<hr class="end">
<p class="information">
<span class="info">Transcribed by:</span> <a href="mailto:AndyM@jse.co.za">Ayanda Madyibi</a>.</p>
<hr class="end">
<p class="fst"><em>One of Africa’s most respected figures, Julius Nyerere (1922 — 1999) was a politician of principle and intelligence. Known as Mwalimu or teacher he had a vision of education that was rich with possibility</em></p>
<p>Julius Kambarage Nyerere was born on April 13, 1922 in Butiama, on the eastern shore of lake Victoria in north west Tanganyika. His father was the chief of the small Zanaki tribe. He was 12 before he started school (he had to walk 26 miles to Musoma to do so). Later, he transferred for his secondary education to the Tabora Government Secondary School. His intelligence was quickly recognized by the Roman Catholic fathers who taught him. He went on, with their help, to train as a teacher at Makerere University in Kampala (Uganda). On gaining his Certificate, he taught for three years and then went on a government scholarship to study history and political economy for his Master of Arts at the University of Edinburgh (he was the first Tanzanian to study at a British university and only the second to gain a university degree outside Africa. In Edinburgh, partly through his encounter with Fabian thinking, Nyerere began to develop his particular vision of connecting socialism with African communal living.
</p>
<p>On his return to Tanganyika, Nyerere was forced by the colonial authorities to make a choice between his political activities and his teaching. He was reported as saying that he was a schoolmaster by choice and a politician by accident. Working to bring a number of different nationalist factions into one grouping he achieved this in 1954 with the formation of TANU (the Tanganyika African National Union). He became President of the Union (a post he held until 1977), entered the Legislative Council in 1958 and became chief minister in 1960. A year later Tanganyika was granted internal self-government and Nyerere became premier. Full independence came in December 1961 and he was elected President in 1962. </p>
<p>Nyerere’s integrity, ability as a political orator and organizer, and readiness to work with different groupings was a significant factor in independence being achieved without bloodshed. In this he was helped by the co-operative attitude of the last British governor — Sir Richard Turnbull. In 1964, following a coup in Zanzibar (and an attempted coup in Tanganyika itself) Nyerere negotiated with the new leaders in Zanzibar and agreed to absorb them into the union government. The result was the creation of the Republic of Tanzania.</p>
<h3>Ujamma, socialism and self reliance </h3>
<p>As President, Nyerere had to steer a difficult course. By the late 1960s Tanzania was one of the world’s poorest countries. Like many others it was suffering from a severe foreign debt burden, a decrease in foreign aid, and a fall in the price of commodities. His solution, the collectivization of agriculture, villigization (see Ujamma below) and large-scale nationalization was a unique blend of socialism and communal life. The vision was set out in the Arusha Declaration of 1967 (reprinted in Nyerere 1968): </p>
<p>"The objective of socialism in the United Republic of Tanzania is to build a society in which all members have equal rights and equal opportunities; in which all can live in peace with their neighbours without suffering or imposing injustice, being exploited, or exploiting; and in which all have a gradually increasing basic level of material welfare before any individual lives in luxury." (Nyerere 1968: 340) </p>
<p>The focus, given the nature of Tanzanian society, was on rural development. People were encouraged (sometimes forced) to live and work on a co-operative basis in organized villages or ujamaa (meaning ‘familyhood’ in Kishwahili). The idea was to extend traditional values and responsibilities around kinship to Tanzania as a whole. </p>
<p>Within the Declaration there was a commitment to raising basic living standards (and an opposition to conspicuous consumption and large private wealth). The socialism he believed in was ‘people-centred’. Humanness in its fullest sense rather than wealth creation must come first. Societies become better places through the development of people rather than the gearing up of production. This was a matter that Nyerere took to be important both in political and private terms. Unlike many other politicians, he did not amass a large fortune through exploiting his position.</p>
<p>The policy met with significant political resistance (especially when people were forced into rural communes) and little economic success. Nearly 10 million peasants were moved and many were effectively forced to give up their land. The idea of collective farming was less than attractive to many peasants. A large number found themselves worse off. Productivity went down. However, the focus on human development and self-reliance did bring some success in other areas notably in health, education and in political identity.</p>
<h3>Liberation struggles </h3>
<p>A committed pan-Africanist, Nyerere provided a home for a number of African liberation movements including the African National Congress (ANC) and the Pan African Congress (PAC) of South Africa, Frelimo when seeking to overthrow Portuguese rule in Mozambique, Zanla (and Robert Mugabe) in their struggle to unseat the white regime in Southern Rhodesia (now Zimbabwe). He also opposed the brutal regime of Idi Amin in Uganda. Following a border invasion by Amin in 1978, a 20,000-strong Tanzanian army along with rebel groups, invaded Uganda. It took the capital, Kampala, in 1979, restoring Uganda’s first President, Milton Obote, to power. The battle against Amin was expensive and placed a strain on government finances. There was considerable criticism within Tanzania that he had both overlooked domestic issues and had not paid proper attention to internal human rights abuses. Tanzania was a one party state — and while there was a strong democratic element in organization and a concern for consensus, this did not stop Nyerere using the Preventive Detention Act to imprison opponents. In part this may have been justified by the need to contain divisiveness, but there does appear to have been a disjuncture between his commitment to human rights on the world stage, and his actions at home. </p>
<h3>Retirement</h3>
<p>In 1985 Nyerere gave up the Presidency but remained as chair of the Party - Chama Cha Mapinduzi (CCM). He gradually withdrew from active politics, retiring to his farm in Butiama. In 1990 he relinquished his chairmanship of CCM but remained active on the world stage as Chair of the Intergovernmental South Centre. One of his last high profile actions was as the chief mediator in the Burundi conflict (in 1996). He died in a London hospital of leukaemia on October 14, 1999.</p>
<hr class="end">
<h5> Books and Articles by Julius Nyerere:</h5>
<p class="fst"><a href="1998/10/13.htm">Good Governance for Africa</a> (1998)</p>
<hr class="end">
<p class="footer"><a href="../index.htm">Marxism in Africa</a></p>
</body> |
Socialism in Africa
Biography : Julius Kambarage Nyerere
Transcribed by: Ayanda Madyibi.
One of Africa’s most respected figures, Julius Nyerere (1922 — 1999) was a politician of principle and intelligence. Known as Mwalimu or teacher he had a vision of education that was rich with possibility
Julius Kambarage Nyerere was born on April 13, 1922 in Butiama, on the eastern shore of lake Victoria in north west Tanganyika. His father was the chief of the small Zanaki tribe. He was 12 before he started school (he had to walk 26 miles to Musoma to do so). Later, he transferred for his secondary education to the Tabora Government Secondary School. His intelligence was quickly recognized by the Roman Catholic fathers who taught him. He went on, with their help, to train as a teacher at Makerere University in Kampala (Uganda). On gaining his Certificate, he taught for three years and then went on a government scholarship to study history and political economy for his Master of Arts at the University of Edinburgh (he was the first Tanzanian to study at a British university and only the second to gain a university degree outside Africa. In Edinburgh, partly through his encounter with Fabian thinking, Nyerere began to develop his particular vision of connecting socialism with African communal living.
On his return to Tanganyika, Nyerere was forced by the colonial authorities to make a choice between his political activities and his teaching. He was reported as saying that he was a schoolmaster by choice and a politician by accident. Working to bring a number of different nationalist factions into one grouping he achieved this in 1954 with the formation of TANU (the Tanganyika African National Union). He became President of the Union (a post he held until 1977), entered the Legislative Council in 1958 and became chief minister in 1960. A year later Tanganyika was granted internal self-government and Nyerere became premier. Full independence came in December 1961 and he was elected President in 1962.
Nyerere’s integrity, ability as a political orator and organizer, and readiness to work with different groupings was a significant factor in independence being achieved without bloodshed. In this he was helped by the co-operative attitude of the last British governor — Sir Richard Turnbull. In 1964, following a coup in Zanzibar (and an attempted coup in Tanganyika itself) Nyerere negotiated with the new leaders in Zanzibar and agreed to absorb them into the union government. The result was the creation of the Republic of Tanzania.
Ujamma, socialism and self reliance
As President, Nyerere had to steer a difficult course. By the late 1960s Tanzania was one of the world’s poorest countries. Like many others it was suffering from a severe foreign debt burden, a decrease in foreign aid, and a fall in the price of commodities. His solution, the collectivization of agriculture, villigization (see Ujamma below) and large-scale nationalization was a unique blend of socialism and communal life. The vision was set out in the Arusha Declaration of 1967 (reprinted in Nyerere 1968):
"The objective of socialism in the United Republic of Tanzania is to build a society in which all members have equal rights and equal opportunities; in which all can live in peace with their neighbours without suffering or imposing injustice, being exploited, or exploiting; and in which all have a gradually increasing basic level of material welfare before any individual lives in luxury." (Nyerere 1968: 340)
The focus, given the nature of Tanzanian society, was on rural development. People were encouraged (sometimes forced) to live and work on a co-operative basis in organized villages or ujamaa (meaning ‘familyhood’ in Kishwahili). The idea was to extend traditional values and responsibilities around kinship to Tanzania as a whole.
Within the Declaration there was a commitment to raising basic living standards (and an opposition to conspicuous consumption and large private wealth). The socialism he believed in was ‘people-centred’. Humanness in its fullest sense rather than wealth creation must come first. Societies become better places through the development of people rather than the gearing up of production. This was a matter that Nyerere took to be important both in political and private terms. Unlike many other politicians, he did not amass a large fortune through exploiting his position.
The policy met with significant political resistance (especially when people were forced into rural communes) and little economic success. Nearly 10 million peasants were moved and many were effectively forced to give up their land. The idea of collective farming was less than attractive to many peasants. A large number found themselves worse off. Productivity went down. However, the focus on human development and self-reliance did bring some success in other areas notably in health, education and in political identity.
Liberation struggles
A committed pan-Africanist, Nyerere provided a home for a number of African liberation movements including the African National Congress (ANC) and the Pan African Congress (PAC) of South Africa, Frelimo when seeking to overthrow Portuguese rule in Mozambique, Zanla (and Robert Mugabe) in their struggle to unseat the white regime in Southern Rhodesia (now Zimbabwe). He also opposed the brutal regime of Idi Amin in Uganda. Following a border invasion by Amin in 1978, a 20,000-strong Tanzanian army along with rebel groups, invaded Uganda. It took the capital, Kampala, in 1979, restoring Uganda’s first President, Milton Obote, to power. The battle against Amin was expensive and placed a strain on government finances. There was considerable criticism within Tanzania that he had both overlooked domestic issues and had not paid proper attention to internal human rights abuses. Tanzania was a one party state — and while there was a strong democratic element in organization and a concern for consensus, this did not stop Nyerere using the Preventive Detention Act to imprison opponents. In part this may have been justified by the need to contain divisiveness, but there does appear to have been a disjuncture between his commitment to human rights on the world stage, and his actions at home.
Retirement
In 1985 Nyerere gave up the Presidency but remained as chair of the Party - Chama Cha Mapinduzi (CCM). He gradually withdrew from active politics, retiring to his farm in Butiama. In 1990 he relinquished his chairmanship of CCM but remained active on the world stage as Chair of the Intergovernmental South Centre. One of his last high profile actions was as the chief mediator in the Burundi conflict (in 1996). He died in a London hospital of leukaemia on October 14, 1999.
Books and Articles by Julius Nyerere:
Good Governance for Africa (1998)
Marxism in Africa
|
./articles/Nyerere-Julius/https:..www.marxists.org.subject.africa.nyerere.1967.arusha-declaration | <body>
<p class="title">5 February 1967</p>
<h1>The Arusha Declaration</h1>
<hr class="end">
<p class="information">
<span class="info">Written:</span> for Tanganyika African National Union by Julius Nyerere, 1967;<br>
<span class="info">Transcribed by:</span> <a href="mailto:AndyM@jse.co.za">Ayanda Madyibi</a>.<br>
The Declaration was discussed and then published in Swahili. This revised English Translation clarifies ambiguities which existed in the translation originally issued. </p>
<hr class="end">
<h3>The Arusha Declaration and TANU’s Policy on Socialism and Self-Reliance </h3>
<h4>PART ONE <br>
The TANU Creed </h4>
<p class="fst">The policy of TANU is to build a socialist state. The principles of socialism are laid down in the TANU Constitution and they are as follows: </p>
<p class="fst">WHEREAS TANU believes: </p>
<p class="indentb">(a) That all human beings are equal; </p>
<p class="indentb">(b) That every individual has a right to dignity and respect; </p>
<p class="indentb">(c) That every citizen is an integral part of the nation and has the right to take an equal part in Government at local, regional and national level; </p>
<p class="indentb">(d) That every citizen has the right to freedom of expression, of movement, of religious belief and of association within the context of the law; </p>
<p class="indentb">(e) That every individual has the right to receive from society protection of his life and of property held according to law; </p>
<p class="indentb">(f) That every individual has the right to receive a just return for his labour; </p>
<p class="indentb">(g) That all citizens together possess all the natural resources of the country in trust for their descendants; </p>
<p class="indentb">(h) That in order to ensure economic justice the state must have effective control over the principal means of production; and </p>
<p class="indentb">(i) That it is the responsibility of the state to intervene actively in the economic life of the nation so as to ensure the well-being of all citizens, and so as to prevent the exploitation of one person by another or one group by another, and so as to prevent the accumulation of wealth to an extent which is inconsistent with the existence of a classless society. </p>
<p class="fst">NOW, THEREFORE, the principal aims and objects of TANU shall be as follows: </p>
<p class="indentb">(a) To consolidate and maintain the independence of this country and the freedom of its people; </p>
<p class="indentb">(b) To safeguard the inherent dignity of the individual in accordance with the Universal Declaration of Human Rights; </p>
<p class="indentb">(c) To ensure that this country shall be governed by a democratic socialist government of the people; </p>
<p class="indentb">(d) To co-operate with all political parties in Africa engaged in the liberation of all Africa; </p>
<p class="indentb">(e) To see that the Government mobilizes all the resources of this country towards the elimination of poverty, ignorance and disease; </p>
<p class="indentb">(f) To see that the Government actively assists in the formation and maintenance of co-operative organizations; </p>
<p class="indentb">(g) to see that wherever possible the Government itself directly participates in the economic development of this country; </p>
<p class="indentb">(h) To see that the Government gives equal opportunity to all men and women irrespective of race, religion or status; </p>
<p class="indentb">(i) To see that the Government eradicates all types of exploitation, intimidation, discrimination, bribery and corruption; </p>
<p class="indentb">(j) To see that the Government exercises effective control over the principal means of production and pursues policies which facilitate the way to collective ownership of the resources of this country; </p>
<p class="indentb">(k) To see that the Government co-operates with other states in Africa in bringing about African unity; </p>
<p class="indentb">(l) To see that Government works tirelessly towards world peace and security through the United Nations Organization. </p>
<h4>PART TWO <br>
The Policy of Socialism </h4>
<p class="fst">(a) Absence of Exploitation </p>
<p class="fst">A truly. socialist state is one in which all people are workers and in which neither capitalism nor feudalism exists. It does not have two classes of people, a lower class composed of people who work for their living, and an upper class of people who live on the work of others. In a really socialist country no person exploits another; everyone who is physically able to work does so; every worker obtains a just return for the labour he performs; and the incomes derived from different types of work are not grossly divergent. In a socialist country, the only people who live on the work of others, and who have the right to be dependent upon their fellows, are small children, people who are too old to support themselves, the crippled, and those whom the state at any one time cannot provide with an opportunity to work for their living. </p>
<p class="fst">Tanzania is a nation of peasants but is not yet a socialist society. It still contains elements of feudalism and capitalism--with their temptations. These feudalistic and capitalistic features of our society could spread and entrench themselves. </p>
<p class="fst">(b) The Major Means of Production and Exchange are under the Control of the Peasants and Workers. </p>
<p class="fst">To Build and maintain socialism it is essential that all the major means of production and exchange in the nation are controlled and owned by the peasants through the machinery of their Government and their co-operatives. Further, it is essential that the ruling Party should be a Party of peasants and workers. </p>
<p class="fst">The major means of production and exchange are such things as: land; forests; minerals;water; oil and electricity; news media; communications; banks, insurance, import ;and export trade, wholesale trade ; iron and steel, machine tool, arms, motor-car, cement, fertilizer, and textile industries; and any big factory on which a large section of the people depend for their living, or which provides essential components of other industries; large plantations, and especially those which provide raw materials essential to important industries. </p>
<p class="fst">Some of the instruments of production and exchange which have been listed here are already owned or controlled by the people’s Government of Tanzania. </p>
<p class="fst">(c) The Existence of Democracy </p>
<p class="fst">A state is not socialist simply because its means of production and exchange are controlled or owned by the government, either wholly or in large part. If a country to be socialist, it is essential that its government is chosen and led by the peasants and workers themsclvcs. If the minority governments of Rhodesia or South Africa controlled or owned the entire economies of these respective countries, the result would be a strengthening of oppression, not the building of socialism. True socialism cannot exist without democracy also existing in the society. </p>
<p class="fst">(d) Socialism is a Belief </p>
<p class="fst">Socialism is a way of life, and a socialist society cannot simply come into existence. A socialist society can only be built by those who believe in, and who themselves practice, the principles of socialism. A committed member of TANU will be a socialist, and his fellow socialist – that is, his fellow believers in this political and economic system – are all those in Africa or elsewhere in the world who fight for the rights of peasants and workers. The first duty of a TANU member, and especially of a TANU leader, is to accept these socialist principles, and to live his own life in accordance with them. In particular, a genuine TANU leader will not live off the sweat of another man, nor commit any feudalistic or capitalistic actions. </p>
<p class="fst">The successful implementation of .socialist objectives depends very much up the leaders, because socialism is a belief in a particular system of living, and it is difficult for leaders to promote its growth if they do not themselves accept it. </p>
<h4>PART THREE <br>
The Policy of Self-Reliance </h4>
<p class="fst">We are at War </p>
<p class="fst">TANU is involved in a war against poverty and oppression in our country; the struggle is aimed at moving the people of Tanzania (and the people of Africa as a whole) from a state of poverty to a State of prosperity. </p>
<p class="fst">We have been oppressed a great deal, we have been exploited a great deal and we have been disregarded a great deal. It is our weakness that has led to our being oppressed, exploited and disregarded. Now we want a revolution – a revolution which brings an end to our weakness, so that we are never again exploited, oppressed, or humiliated. </p>
<p class="fst">A Poor Man does not use Money as a Weapon </p>
<p class="fst">But it is obvious that in the past we have chosen the wrong weapon for our struggle, because we chose money as our weapon. We are trying to overcome our economic weakness by using the weapons or the economically strong – weapons which in fact we do not possess. By our thoughts, words and actions it appears as if we have come to the conclusion that without money we cannot bring about the revolution we are aiming at. It is as if we have said, ‘Money is the basis of development. Without money there can be no development.’ </p>
<p class="fst">That is what we believe at present. TANU leaders, and Government leaders and officials, all put great emphasis and dependence on money. The people’s leaders, and the people themselves, in TANU, NUTA, Parliament, UWT, the co-operatives, TAPA, and in other national institutions think, hope and pray for MONEY. It is as if we had all agreed to speak with one voice, saying, ‘If we get money we shall develop, without money we cannot develop. </p>
<p class="fst">In brief, our Five-Year Development Plan aims at more food, more education, and better health; but the weapon we have put emphasis upon is money. It is as if we said, ‘In the next five years we want to have more food, more education, and better health, and in order to achieve these things we shall spend �250,000,000’. We think and speak as if the most important thing to depend upon is MONEY and anything else we intend to use in our struggle is of minor importance. </p>
<p class="fst">When a member of Parliament says that there is a shortage of water in his constituency ; and he asks the Government how it intends to deal with the problem, he expects the Government to reply that it is planning to remove the shortage of water in his constituency – with MONEY. </p>
<p class="fst">When another Member of Parliament asks what the Government is doing about the shortage of roads, schools or hospitals in his constituency, he also expects the Government to tell him that it has specific plans to build roads, schools and hospitals in his constituency – with MONEY. </p>
<p class="fst">When a NUTA official asks the Government about its plans to deal with the low wages and poor housing of the workers, he expects the Government to inform him that the minimum wage will be increased and that better houses will be provided for the workers – WITH MONEY. </p>
<p class="fst">When a TAPA official asks the Government what plans it has to give assistance to the many TAPA schools which do not get Government aid, he expects the Government to state that it is ready the following morning to give the required assistance – WITH MONEY. </p>
<p class="fst">When an official of the co-operative movement mentions any problem facing the farmer, he expects to hear that the Government will solve the farmer’s problems – WITH MONEY in short, for every problem facing our nation, the solution that is in everybody’s mind is MONEY. </p>
<p class="fst">Each year, each Ministry of Government makes its estimates of expenditure, i.e. the amount of money it will require in the coming year to meet recurrent and development expenses. Only one Minister and his Ministry make estimates of revenue. This is the Minister for Finance. </p>
<p class="fst">Every Ministry puts forward very good development plans. When the Ministry presents its estimates, it believes that the money is there for the asking but that the Minister for Finance are being obstructive. And regularly each year the Minister of Finance has to tell his fellow Ministers that there is no money. And each year the Ministers complain about the Ministry of Finance when it trims down their estimates. </p>
<p class="fst">Similarly, when Members of Parliament and other leaders demand that the Government should carry out a certain development, they believe that there is a lot of money to spend on such projects, but that the Government is the stumbling block. Yet such belief on the part of Ministries, Members of Parliament and other leaders does not alter the stark truth, which is that Government has no money. </p>
<p class="fst">When it is said that Government has no money, what does this mean? It means that the people of Tanzania have insufficient money The people pay taxes out of the very little wealth they have; it is from these taxes that the Government meets its recurrent and development expenditure. When we call on the Government to spend more money on development projects, we are asking the Government to use more money. and if the Government does not have any more, the only way it can do this is to increase its revenue through extra taxation. </p>
<p class="fst">If one calls on the Government to spend more, one is in effect calling on the Government to increase taxes. Calling on the Government to spend more without raising taxes is like demanding that the Government should perform miracles; it is equivalent to asking for more milk from a cow while insisting that the cow should not be milked again. But our refusal to admit the calling on the Government to spend more is the same as calling on the Government to raise taxes shows that we fully realize the difficulties of increasing taxes. We realize that the cow has no more milk – that is, that the people find it difficult to pay more taxes. We know that the cow would like to have more milk herself, so that her calves could drink it, or that she would like more milk which could be sold to provide more comfort for herself or her calves. But knowing all the things which could be done with more milk does not alter the fact that the cow has no more milk! </p>
<h5>WHAT OF EXTERNAL AID? </h5>
<p class="fst">One method we use to try and avoid a recognition of the need to increase taxes if we want to have more money for development, is to think in terms of getting the extra money from outside Tanzania. Such external finance falls into three main categories. </p>
<p class="fst">(a) Gifts: This means that another government gives our Government a sum of money as a free gift for a particular development scheme. Sometimes it may be that an institution in another country gives our Government, or an institution in our country, financial help for development programmes. </p>
<p class="fst">(b) Loans: The greater portion of financial help we expect to get from outside is not in the form of gifts or charity, but in the form of loans. A foreign government or a foreign institution, such as a bank, lends our Government money for the purposes of development. Such a loan has repayment conditions attached to it, covering such factors as the time period for which it is available and the rate of interest. </p>
<p class="fst">(c) Private Investment: The third category of financial help is also greater than the first. This takes the form of investment in our country by individuals or companies from outside. The important condition which such private investors have in mind is that the enterprise into which they put their money should bring them profit and that our Government should permit them to repatriate these profits. They also prefer to invest in a country whose policies they agree with and which will safeguard their economic interests. </p>
<p class="fst">These three are the main categories of external finance. And there is in Tanzania a fantastic amount of talk about getting money from outside. Our Government, and different groups of our leaders, never stop thinking about methods of getting finance from abroad. And if we get some money or even if we just get a promise of it, our newspapers, our radio, and our leaders, all advertise the fact in order that every person shall know that salvation is coming, or is on the way. If we receive a girt we announce it, if we receive a loan we announce it, if we get a new factory we announce it – and always loudly. In the same way, when we get a promise of a gift, a loan, or a new industry, we make an announcement of the promise. Even when we have merely started discussions with a foreign government or institution for a gift, a loan, or a new industry, we make an announcement – even though we do not know the outcome of the discussions. Why do we do all this? Because we want people to know that we have started discussions which will bring prosperity. </p>
<h5>DO NOT LET US DEPEND UPON MONEY FOR DEVELOPMENT </h5>
<p class="fst">It is stupid to rely on money as the major instrument of development when we know only too well that our country is poor. It is equally stupid, indeed it is even more stupid, for us to imagine that we shall rid ourselves of our poverty through foreign financial assistance rather than our own financial resources. It is stupid for two reasons. </p>
<p class="fst">Firstly, we shall not get the money. It is true that there are countries which can, and which would like to, help us. But there is no country in the world which is prepared to give us gifts or loans, or establish industries, to the extent that we would be able to achieve all our development targets. There are many needy countries in the world. And even if all the prosperous nations were willing to help the needy countries, the assistance would still not suffice. But in any case the prosperous nations have not accepted a responsibility to fight world poverty. Even within their own borders poverty still exists, and the rich individuals do not willingly give money to the government to help their poor fellow citizens. </p>
<p class="fst">It is only through taxation, which people have to pay whether they want to or not, that money can be extracted from the rich in order to help the masses. Even then there would not be enough money. However heavily we taxed the citizens of Tanzania and the aliens living here, the resulting revenue would not be enough to meet the costs of the development we want. And there is no World Government which can tax the prosperous nations in order to help the poor nations; nor if one did exist could it raise enough revenue to do all that is needed in the world. But in fact, such a World Government does not exist. Such money as the rich nations offer to the poor nations is given voluntarily, either through their own goodness, or for their own benefit. All this means that it is impossible for Tanzania to obtain from overseas enough money to develop our economy. </p>
<h5>GIFTS AND LOANS WILL ENDANGER OUR INDEPENDENCE </h5>
<p class="fst">Secondly, even if it were possible for us to get enough money for our needs from external sources, is this what we really want? Independence means self-reliance. Independence cannot be real if a nation depends upon gifts and loans from another for Its development. Even if there was a nation, or nations, prepared to give us all the money we need for our development, it would be improper for us to accept such assistance without asking ourselves how this would effect our independence and our very survival as a nation. Gifts which increase, or act as a catalyst, to our own efforts are valuable. Gifts which could have the effect of weakening or distorting our own efforts should not be accepted until we have asked ourselves a number of questions. </p>
<p class="fst">The same applies to loans. It is true that loans are better than ‘free’ gifts. A loan is intended to increase our efforts or make those fruitful. One condition of a loan is that you show how you are going to repay it. This means you have to show that you intend to use the loan profitably and will therefore be able to repay it. </p>
<p class="fst">But even loans have their limitations. You have to give consideration to the ability to repay. When we borrow money from other countries it is the Tanzanian who pays it back. And as we have already stated, Tanzania’s are poor people. To burden the people with big loans, the repayment of which will be beyond their means, is not to help them but to make them suffer. It is even worse when the loans they are asked to repay have not benefited the majority of the people but have only benefited a small minority. </p>
<p class="fst">How about the enterprises of foreign investors ? It is true we need these enterprises. We have even passed an Act of Parliament protecting foreign investments in this country. Our aim is to make foreign investors feel that Tanzania is a good place in which to invest because investments would be safe and profitable, and the profits can be taken out of the country without difficulty. We expect to get money through this method. But we cannot get enough. And even if we were able to convince foreign investors and foreign firms to undertake all the projects and programmes of economic development that we need, is that what we actually want to happen ? </p>
<p class="fst">Had we been able to attract investors from America and Europe to come and start all the industries and all the projects of economic development that we need in this country, could we do so without questioning ourselves? </p>
<p class="fst">Could we agree to leave the economy of our country in the hands of foreigners who would take the profits back to their countries? Or supposing they did not insist upon taking their profits away, but decided to reinvest them in Tanzania; could we really accept this situation without asking ourselves what disadvantages our nation would suffer? Would this allow the socialism we have said it is our objective to build ? </p>
<p class="fst">How can we depend upon gifts, loans, and investments from foreign countries and foreign companies without endangering our independence? The English people have a proverb which says, ‘He who pays the piper calls the tune’. How can we depend upon foreign governments and companies for the major part of our development without giving to those governments and countries a great part of our freedom to act as we please ? The truth is that we cannot. </p>
<p class="fst">Let us repeat. We made a mistake in choosing money – something we do not have – to be the big instrument of our development. We are making a mistake to think that we shall get the money from other countries; first, because in fact we shall not be able to get sufficient money for our economic development; and secondly, because even if we could get all that we need, such dependence upon others would endanger our independence and our ability to choose our own political policies. </p>
<h5>WE HAVE PUT TOO MUCH EMPHASIS ON INDUSTRIES </h5>
<p class="fst">Because of our emphasis on money, we have made another big mistake. We have put too much emphasis on industries. Just as we have said , ‘Without money there can be no development’, we also seem to say, ‘Industries arc the basis of development, without industries there is no development’. This is true The day when we have lots of money we shall be able to say we are a developed country. We shall be able to say, When we began our development plans we did not have enough money and this situation made it difficult for us to develop as fast as we wanted. Today we are developed and we have enough money. That is to say, our money has been brought by development. Similarly, the day we become industrialized we shall be able to say we are developed. Development would have us to have industries. The mistake we are making is to think that development begins with industries. It is a mistake because we do not have the means to establish many modern industries in our country. We do not have either the necessary finances or the technical know-how. It is not enough to say that we shall borrow the finances and the technicians from other countries to come and start the industries. The answer to this is the same one we gave earlier, that we cannot get enough money and borrow enough technicians to start all the industries we need. And even if we could get the necessary assistance, dependence on it could interfere with our policy on socialism. The policy of inviting a chain of capitalists to come and establish industries in our country might succeed in giving us all the industries we need but it would also succeed in preventing the establishment of socialism unless we believe that without first building capitalism, we cannot build socialism. </p>
<h5>LET US PRAY AND HEED TO THE PEASANT </h5>
<p class="fst">Our emphasis on money and industries has made us concentrate on urban development. We recognize that we do not have enough money to bring the kind of development to each village which would benefit everybody. We also know that we cannot establish an industry in each village and through this means erect a rise in the real incomes of the people. For these reasons we spend most of our money in the urban areas and our industries are established in the towns. </p>
<p class="fst">Yet the greater part of this money that we spend in the towns comes from loans. Whether it is use it to build schools, hospitals, houses or factories, etc., it still has to be repaid. But it is obvious that it cannot be repaid just out of money obtained from urban and industrial development. To repay the loans we have to use foreign currency which is obtained from the sale of our exports. But we do not now sell our industrial products in foreign markets, and indeed it is likely to be a long time before our industries produce for export. The main aim of our new industries is ‘import substitution’ – that is, to produce things which up to now we have had to import from foreign countries. </p>
<p class="fst">It is therefore obvious that the foreign currency we shall use to pay back the loans used in the development Or the urban areas will not come from the towns or the industries. Where, then, shall we get it from? We shall get it from the villages and from agriculture. What does this mean? It means that the people who benefit directly from development which is brought about by borrowed money are not the ones who will repay the loans. The largest proportion of the loans will be spent in, or for, the urban areas, but the largest proportion of the repayment will be made through the efforts of the farmers. </p>
<p class="fst">This fact should always be borne in mind, for there are various forms of exploitation. We must not forget that people who live in towns can possibly become the exploiters of those who live in the rural areas. All our big hospitals are in towns and they benefit only a small section of the people of Tanzania. Yet if we had built them with loans from outside Tanzania, it is the overseas sale of the peasants’ produce which provides the foreign exchanges for repayment. Those who do not get the benefit of the hospital thus carry the major responsibility for paying for them. Tarmac roads, too, are mostly found in towns and are of especial value to the motor-car owners. Yet if we have built those roads with loans, it is again the farmer who produces the goods which will pay for them. What is more, the foreign exchange with which the car was bought also came from the sale of the farmers’ produce. Again, electric lights, water pipes, hotels and other aspects of modern development are mostly found in towns. Most of them have been built with loans, and most of them do not benefit the farmer directly, although they will be paid for by the foreign exchange earned by the sale of his produce. We should always bear this in mind. </p>
<p class="fst">Although when we talk of exploitation we usually think of capitalists, we should not forget that there are many fish in the sea. They eat each other. The large ones eat the small ones, and small ones eat those who are even smaller. There are two possible ways of dividing the people in our country. We can put the capitalists and feudalists on one side, and the farmers and workers on the other. But we can also divide the people into urban dwellers on one side and those who live in the rural areas on the other. If we are not careful we might get to the position where the real exploitation in Tanzania is that of the town dwellers exploiting the peasants. </p>
<h5>THE PEOPLE AND AGRICULTURE </h5>
<p class="fst">The development of a country is brought about by people, not by money. Money, and the wealth it represents, is the result and not the basis of development. The four prerequisites of development are different; they are (i) People; (ii) Land; (iii) Good Policies; (iv) Good Leadership. Our country has more than ten million people1 and is are; is more than 362,000 square miles. </p>
<h5>AGRICULTURE IS THE BASIS OF DEVELOPMENT </h5>
<p class="fst">A great part of Tanzania’s land is fertile and gets sufficient rain. Our country can produce various crops for home consumption and for export. </p>
<p class="fst">We can produce food crops (which can be exported if we produce in large quantities) such as maize, rice, wheat, beans, groundnuts, etc. And we can produce such cash crops as sisal, cotton, coffee, tobacco, pyrethrum, tea, etc. Our land is also good for grazing cattle, goats, sheep, and for raising chickens, etc.; we can get plenty of fish from our rivers, lakes, and from the sea. All of our farmers are in areas which can produce two or three or even more of the food and cash crops enumerated above, and each farmer could increase his production so as to get more food or more money. And because the main aim of development is to get more food, and more money for our other needs our purpose must be to increase production of these agricultural crops. This is in fact the only road through which we can develop our country – in other words, only by increasing our production of these things can we get more food and more money for every Tanzanian. </p>
<h5>THE CONDITIONS OF DEVELOPMENT </h5>
<p class="fst">(a) Hard Work </p>
<p class="fst">Everybody wants development; but not everybody understands and accepts the basic requirements for development. The biggest requirement is hard work. Let us go to the villages and talk to our people and see whether or not it is possible for them to work harder. </p>
<p class="fst">In towns, for example, wage-earners normally work for seven and a half or eight hours a day, and for six or six and a half days a week. This is about 45 hours a week for the whole year, except for two or three weeks leave. In other words, a wage-earner works for 45 hours a week for 48 or 50 weeks of the year. </p>
<p class="fst">In or a country like ours these are really quite short working hours. In other countries, even those which are more developed than we are, people work for more than 45 hours a week. It is not normal for a young country to start with such a short working week. The normal thing is to begin with long working hours and decrease them as the country becomes more and more prosperous. By starting with such short working hours and asking for even shorter hours, we are in fact imitating the more developed countries. And we shall regret this imitation. Nevertheless, wage earners do work for 45 hours per week and their annual vacation does not exceed four weeks. </p>
<p class="fst">It would be appropriate to ask our farmers, especially the men, how many hours a week and how many weeks a year they work. Many do not even work for half as many hours as the wage-earner does. The truth is that in the villages the women work very hard. At times they work for 12 or 14 hours a day. They even work on Sundays and public holidays. Women who live in the villages work harder than anybody else in Tanzania. But the men who live in villages (and some of the women in towns) are on leave for half of their lire. The energies of the millions of men in the villages and thousands of women in the towns which are at present wasted in gossip, dancing and drinking, are a great treasure which could contribute more towards the development of our country than anything we could get from rich nations. </p>
<p class="fst">We would be doing something very beneficial to our country if we went to the villages and told our people that they hold this treasure and that it is up to them to use it for their own benefit and the benefit of our whole nation . </p>
<p class="fst">(b) Intelligence </p>
<p class="fst">The second condition of development is the use of intelligence. Unintelligent hard work would not bring the same good results as the two combined. Using a big hoe instead of a small one; using a plow pulled by oxen instead of an ordinary hoe; the use of fertilizers; the use of insecticides; knowing the right crop for a particular season or soil; choosing good seeds for planting; knowing the right time for planting, weeding, etc.; all these things show the use of knowledge and intelligence. And all of them combine with hard work to produce more and better results. </p>
<p class="fst">The money and time we spend on passing this knowledge to the peasants are better spent and bring more benefits to our country than the money and great amount of time we spend on other things which we call development. </p>
<p class="fst">These facts are well known to all of us. The parts of our Five-Year Development Plan which are on target, or where the target has been exceeded, are those parts which depend solely upon the people’s own hard work. The production of cotton, coffee, cashew nuts, tobacco and pyrethrum has increased enormously for the past three years. But these are things which are produced by hard work and the good leadership of the people, not by the use of great amounts of money. </p>
<p class="fst">Furthermore the people, through their own hard work and with a little help and leadership, have finished many development projects in the villages. They have built schools, dispensaries, community centers, and roads; they have dug wells, water channels, animal dips, small dams, and completed various other development projects. Had they waited for money, they would not now have the use of these things. </p>
<h5>HARD WORK IS THE ROOT OF DEVELOPMENT </h5>
<p class="fst">Some Plan projects which depend on money are going on well, but there are many which have stopped and others which might never be fulfilled because of lack of money. Yet still we talk about money and our search for money increases and takes nearly all our energies. We should not lessen our efforts to get the money we really need, but it would be more appropriate for us to spend time in the villages showing the people how to bring about development through their own efforts rather than going on so many long and expensive journeys abroad in search of development money. This is the real way to bring development to everybody in the country. </p>
<p class="fst">None of this means that from now on we will not need money or that we will not start industries or embark upon development projects which require money. Furthermore, we are not saying that we will not accept, or even that we shall not look for, money from other countries for our development. This is not what we are saying. We will continue to use money; and each year we will use more money for the various development projects than we uscd the previous year because this will be one of the signs of our development. </p>
<p class="fst">What we are saying, however, is that from now on we shall know what is the foundation and what is the fruit of development. Between money and people it is obvious that the people and their hard work are the foundation of development, and money is one of the fruits of that hard work. </p>
<p class="fst">From now on we shall stand upright and walk forward on our feet rather than look at this problem upside down. industries will come and money will come but their foundation is the people and their hard work, especially in AGRICULTURE. This is the meaning of self-reliance. </p>
<p class="fst">Our emphasis should therefore be on: </p>
<p class="indentb">(a) The Land and Agriculture </p>
<p class="indentb">(b) The People </p>
<p class="indentb">(c) The Policy of Socialism and Self-Reliance, and </p>
<p class="indentb">(d) Good Leadership. </p>
<p class="fst">(a) The Land </p>
<p class="fst">Because the economy of Tanzania depends and will continue to depend on agriculture and animal husbandry, Tanzanians can live well without depending on help from outside if they use their land properly. Land is the basis of human life and all Tanzanians should use it as a valuable investment for future development. Because the land belongs to the nation, the Government has to see to it that it is being used for the benefit of the whole nation and not for the benefit of one individual or just a few people. </p>
<p class="fst">It is the responsibility of TANU to see that the country produces enough food and enough cash crops for export. It is the responsibility of the Government and the co-operative societies to see to it that our people get the necessary tools, training and leadership in modern methods of agriculture. </p>
<p class="fst">(b) The People </p>
<p class="fst">In order properly to implement the policy of self-reliance, the people have to be taught the meaning of self-reliance and its practice. They must become self-sufficient in food, serviceable clothes and good housing. </p>
<p class="fst">In our country work should be something to be proud of, and laziness, drunkenness and idleness should be things to be ashamed of. And for the defense of our nation, it is necessary for us to be on guard against internal stooges who could be used by external enemies who aim to destroy us. The people should always be ready to defend their nation when they are called upon to do so. </p>
<p class="fst">(c) Good Policies </p>
<p class="fst">The principles of our policy of self-reliance go hand in hand with our policy of socialism. In order to prevent exploitation it is necessary for everybody to work and to live on his own labour. And in order to distribute the national wealth rairly, it is necessary for everybody to work to the maximum of his ability. Nobody should go and stay for a long time with his relative, doing no work, because in doing so he will be exploiting his relative. Likewise, nobody should be allowed to loiter in towns or villages without doing work which would enable him to be self-reliant without exploiting his relatives. </p>
<p class="fst">TANU believes that everybody who loves his nation has a duty to serve it by co-operating with his fellows in building the country for the benefit of all the people of Tanzania. In order to maintain our independence and our pcople’s freedom we ought to be self-reliant in every possible way and avoid depending upon other countries for assistance. If every individual is self-reliant ten-house cell will be self-reliant; if all the cells are self-reliant the whole ward will be self-reliant; and if the wards are self-reliant the District will be self-reliant. If the Districts arc self-reliant, then the Region is self-reliant, and if the Regions are self-reliant, then the whole nation is self-reliant and this our aim. </p>
<p class="fst">(d) Good Leadership </p>
<p class="fst">TANU recognizes the urgency and importance of good leadership. But we have not yet produced systematic training for our leaders; it is necessary that TANU Headquarters should now prepare a programme of training for all leaders – from the national level to the ten-house cell level – so that every one of them understands our political and economic policies. Leaders must set a good example to the rest of the people in their lives and in all their activities. </p>
<h4>PART FOUR <br>
TANU Membership </h4>
<p class="fst">Since the Party was founded we have put great emphasis on getting as many members as possible. This was the right policy during the independence struggle. But now the National Executive feels that the time has come when we should put more emphasis on the beliefs of our Party and its policies of socialism. </p>
<p class="fst">That part of the TANU Constitution which relates to the admission of a member should be adhered to, and if it is discovered that a man does not appear to accept the faith, the objects, and the rules and regulations of the Party, then he should not be accepted as a member. In particular, it should not be forgotten that TANU is a party of peasants and workers. </p>
<h4>PART FIVE </h4>
<p class="fst">The Arusha Resolution </p>
<p class="fst">Therefore, the National Executive Committee, meeting in the Community Centre at Arusha from 26.1.67 to 29.1.67 resolves: </p>
<p class="fst">(a) The Leadership </p>
<p class="indentb">1. Every TANU and Government leader must be either a peasant or a worker, and should in no way be associated with the practices or capitalism or feudalism. </p>
<p class="indentb">2. No TANU or Government leader should hold shares in any company. </p>
<p class="indentb">3. No TAN U or Government leader should hold directorships in any privately owned enterprise. </p>
<p class="indentb">4. No TANU or Government leader should receive two or more salaries. </p>
<p class="indentb">5. No TANU or Government leader should own houses which he rents to others. </p>
<p class="indentb">6. For the purposes of this Resolution the term ‘leader’ should comprise the following: </p>
<p class="fst">Members of the TANU National Executive Committee; Ministers; Members of Parliament; senior officials of organizations affiliated to TANU; senior officers of par-statal organizations; all those appointed or elected under any clause of the TANU Constitution; councilors; and civil servants in the high and middle cadres. (In this context ‘leader’ means a man, or a man and his wife; a woman, or a woman and her husband.) </p>
<p class="fst">(b) The Government and other Institutions </p>
<p class="indentb">1. Congratulates the Government for the steps it has taken so far in the implementation of the policy of socialism </p>
<p class="indentb">2. Calls upon the Government to take further steps in the implementation of our policy of socialism as described in Part Two of this document without waiting for a Commission on Socialism. </p>
<p class="indentb">3. Calls upon the Government to put emphasis, when preparing its development plans, on the ability of this country to implement the plans rather than depending on foreign loans and grants as has been done in the current Five-Year Development Plan. The National Executive Committee also resolves that the Plan should be amended so as to make it fit in with the policy of self-reliance. </p>
<p class="indentb">4. Calls upon the Government to take action designed to ensure that the incomes of workers in the private sector are not very different from the incomes of workers in the public sector. </p>
<p class="indentb">5. Calls upon the Government to put great emphasis on actions which will raise the standard of living of the peasants, and the rural community. </p>
<p class="indentb">6. Calls upon NUTA, the co-operatives, TAPA, UWT, TYL, and other Government institutions to take steps to implement the policy of socialism and self-reliance. </p>
<p class="fst">(c) Membership </p>
<p class="fst">Members should get thorough teaching on Party ideology so that they may understand it, and they should always be reminded of the importance of living up to its principles.</p>
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5 February 1967
The Arusha Declaration
Written: for Tanganyika African National Union by Julius Nyerere, 1967;
Transcribed by: Ayanda Madyibi.
The Declaration was discussed and then published in Swahili. This revised English Translation clarifies ambiguities which existed in the translation originally issued.
The Arusha Declaration and TANU’s Policy on Socialism and Self-Reliance
PART ONE
The TANU Creed
The policy of TANU is to build a socialist state. The principles of socialism are laid down in the TANU Constitution and they are as follows:
WHEREAS TANU believes:
(a) That all human beings are equal;
(b) That every individual has a right to dignity and respect;
(c) That every citizen is an integral part of the nation and has the right to take an equal part in Government at local, regional and national level;
(d) That every citizen has the right to freedom of expression, of movement, of religious belief and of association within the context of the law;
(e) That every individual has the right to receive from society protection of his life and of property held according to law;
(f) That every individual has the right to receive a just return for his labour;
(g) That all citizens together possess all the natural resources of the country in trust for their descendants;
(h) That in order to ensure economic justice the state must have effective control over the principal means of production; and
(i) That it is the responsibility of the state to intervene actively in the economic life of the nation so as to ensure the well-being of all citizens, and so as to prevent the exploitation of one person by another or one group by another, and so as to prevent the accumulation of wealth to an extent which is inconsistent with the existence of a classless society.
NOW, THEREFORE, the principal aims and objects of TANU shall be as follows:
(a) To consolidate and maintain the independence of this country and the freedom of its people;
(b) To safeguard the inherent dignity of the individual in accordance with the Universal Declaration of Human Rights;
(c) To ensure that this country shall be governed by a democratic socialist government of the people;
(d) To co-operate with all political parties in Africa engaged in the liberation of all Africa;
(e) To see that the Government mobilizes all the resources of this country towards the elimination of poverty, ignorance and disease;
(f) To see that the Government actively assists in the formation and maintenance of co-operative organizations;
(g) to see that wherever possible the Government itself directly participates in the economic development of this country;
(h) To see that the Government gives equal opportunity to all men and women irrespective of race, religion or status;
(i) To see that the Government eradicates all types of exploitation, intimidation, discrimination, bribery and corruption;
(j) To see that the Government exercises effective control over the principal means of production and pursues policies which facilitate the way to collective ownership of the resources of this country;
(k) To see that the Government co-operates with other states in Africa in bringing about African unity;
(l) To see that Government works tirelessly towards world peace and security through the United Nations Organization.
PART TWO
The Policy of Socialism
(a) Absence of Exploitation
A truly. socialist state is one in which all people are workers and in which neither capitalism nor feudalism exists. It does not have two classes of people, a lower class composed of people who work for their living, and an upper class of people who live on the work of others. In a really socialist country no person exploits another; everyone who is physically able to work does so; every worker obtains a just return for the labour he performs; and the incomes derived from different types of work are not grossly divergent. In a socialist country, the only people who live on the work of others, and who have the right to be dependent upon their fellows, are small children, people who are too old to support themselves, the crippled, and those whom the state at any one time cannot provide with an opportunity to work for their living.
Tanzania is a nation of peasants but is not yet a socialist society. It still contains elements of feudalism and capitalism--with their temptations. These feudalistic and capitalistic features of our society could spread and entrench themselves.
(b) The Major Means of Production and Exchange are under the Control of the Peasants and Workers.
To Build and maintain socialism it is essential that all the major means of production and exchange in the nation are controlled and owned by the peasants through the machinery of their Government and their co-operatives. Further, it is essential that the ruling Party should be a Party of peasants and workers.
The major means of production and exchange are such things as: land; forests; minerals;water; oil and electricity; news media; communications; banks, insurance, import ;and export trade, wholesale trade ; iron and steel, machine tool, arms, motor-car, cement, fertilizer, and textile industries; and any big factory on which a large section of the people depend for their living, or which provides essential components of other industries; large plantations, and especially those which provide raw materials essential to important industries.
Some of the instruments of production and exchange which have been listed here are already owned or controlled by the people’s Government of Tanzania.
(c) The Existence of Democracy
A state is not socialist simply because its means of production and exchange are controlled or owned by the government, either wholly or in large part. If a country to be socialist, it is essential that its government is chosen and led by the peasants and workers themsclvcs. If the minority governments of Rhodesia or South Africa controlled or owned the entire economies of these respective countries, the result would be a strengthening of oppression, not the building of socialism. True socialism cannot exist without democracy also existing in the society.
(d) Socialism is a Belief
Socialism is a way of life, and a socialist society cannot simply come into existence. A socialist society can only be built by those who believe in, and who themselves practice, the principles of socialism. A committed member of TANU will be a socialist, and his fellow socialist – that is, his fellow believers in this political and economic system – are all those in Africa or elsewhere in the world who fight for the rights of peasants and workers. The first duty of a TANU member, and especially of a TANU leader, is to accept these socialist principles, and to live his own life in accordance with them. In particular, a genuine TANU leader will not live off the sweat of another man, nor commit any feudalistic or capitalistic actions.
The successful implementation of .socialist objectives depends very much up the leaders, because socialism is a belief in a particular system of living, and it is difficult for leaders to promote its growth if they do not themselves accept it.
PART THREE
The Policy of Self-Reliance
We are at War
TANU is involved in a war against poverty and oppression in our country; the struggle is aimed at moving the people of Tanzania (and the people of Africa as a whole) from a state of poverty to a State of prosperity.
We have been oppressed a great deal, we have been exploited a great deal and we have been disregarded a great deal. It is our weakness that has led to our being oppressed, exploited and disregarded. Now we want a revolution – a revolution which brings an end to our weakness, so that we are never again exploited, oppressed, or humiliated.
A Poor Man does not use Money as a Weapon
But it is obvious that in the past we have chosen the wrong weapon for our struggle, because we chose money as our weapon. We are trying to overcome our economic weakness by using the weapons or the economically strong – weapons which in fact we do not possess. By our thoughts, words and actions it appears as if we have come to the conclusion that without money we cannot bring about the revolution we are aiming at. It is as if we have said, ‘Money is the basis of development. Without money there can be no development.’
That is what we believe at present. TANU leaders, and Government leaders and officials, all put great emphasis and dependence on money. The people’s leaders, and the people themselves, in TANU, NUTA, Parliament, UWT, the co-operatives, TAPA, and in other national institutions think, hope and pray for MONEY. It is as if we had all agreed to speak with one voice, saying, ‘If we get money we shall develop, without money we cannot develop.
In brief, our Five-Year Development Plan aims at more food, more education, and better health; but the weapon we have put emphasis upon is money. It is as if we said, ‘In the next five years we want to have more food, more education, and better health, and in order to achieve these things we shall spend �250,000,000’. We think and speak as if the most important thing to depend upon is MONEY and anything else we intend to use in our struggle is of minor importance.
When a member of Parliament says that there is a shortage of water in his constituency ; and he asks the Government how it intends to deal with the problem, he expects the Government to reply that it is planning to remove the shortage of water in his constituency – with MONEY.
When another Member of Parliament asks what the Government is doing about the shortage of roads, schools or hospitals in his constituency, he also expects the Government to tell him that it has specific plans to build roads, schools and hospitals in his constituency – with MONEY.
When a NUTA official asks the Government about its plans to deal with the low wages and poor housing of the workers, he expects the Government to inform him that the minimum wage will be increased and that better houses will be provided for the workers – WITH MONEY.
When a TAPA official asks the Government what plans it has to give assistance to the many TAPA schools which do not get Government aid, he expects the Government to state that it is ready the following morning to give the required assistance – WITH MONEY.
When an official of the co-operative movement mentions any problem facing the farmer, he expects to hear that the Government will solve the farmer’s problems – WITH MONEY in short, for every problem facing our nation, the solution that is in everybody’s mind is MONEY.
Each year, each Ministry of Government makes its estimates of expenditure, i.e. the amount of money it will require in the coming year to meet recurrent and development expenses. Only one Minister and his Ministry make estimates of revenue. This is the Minister for Finance.
Every Ministry puts forward very good development plans. When the Ministry presents its estimates, it believes that the money is there for the asking but that the Minister for Finance are being obstructive. And regularly each year the Minister of Finance has to tell his fellow Ministers that there is no money. And each year the Ministers complain about the Ministry of Finance when it trims down their estimates.
Similarly, when Members of Parliament and other leaders demand that the Government should carry out a certain development, they believe that there is a lot of money to spend on such projects, but that the Government is the stumbling block. Yet such belief on the part of Ministries, Members of Parliament and other leaders does not alter the stark truth, which is that Government has no money.
When it is said that Government has no money, what does this mean? It means that the people of Tanzania have insufficient money The people pay taxes out of the very little wealth they have; it is from these taxes that the Government meets its recurrent and development expenditure. When we call on the Government to spend more money on development projects, we are asking the Government to use more money. and if the Government does not have any more, the only way it can do this is to increase its revenue through extra taxation.
If one calls on the Government to spend more, one is in effect calling on the Government to increase taxes. Calling on the Government to spend more without raising taxes is like demanding that the Government should perform miracles; it is equivalent to asking for more milk from a cow while insisting that the cow should not be milked again. But our refusal to admit the calling on the Government to spend more is the same as calling on the Government to raise taxes shows that we fully realize the difficulties of increasing taxes. We realize that the cow has no more milk – that is, that the people find it difficult to pay more taxes. We know that the cow would like to have more milk herself, so that her calves could drink it, or that she would like more milk which could be sold to provide more comfort for herself or her calves. But knowing all the things which could be done with more milk does not alter the fact that the cow has no more milk!
WHAT OF EXTERNAL AID?
One method we use to try and avoid a recognition of the need to increase taxes if we want to have more money for development, is to think in terms of getting the extra money from outside Tanzania. Such external finance falls into three main categories.
(a) Gifts: This means that another government gives our Government a sum of money as a free gift for a particular development scheme. Sometimes it may be that an institution in another country gives our Government, or an institution in our country, financial help for development programmes.
(b) Loans: The greater portion of financial help we expect to get from outside is not in the form of gifts or charity, but in the form of loans. A foreign government or a foreign institution, such as a bank, lends our Government money for the purposes of development. Such a loan has repayment conditions attached to it, covering such factors as the time period for which it is available and the rate of interest.
(c) Private Investment: The third category of financial help is also greater than the first. This takes the form of investment in our country by individuals or companies from outside. The important condition which such private investors have in mind is that the enterprise into which they put their money should bring them profit and that our Government should permit them to repatriate these profits. They also prefer to invest in a country whose policies they agree with and which will safeguard their economic interests.
These three are the main categories of external finance. And there is in Tanzania a fantastic amount of talk about getting money from outside. Our Government, and different groups of our leaders, never stop thinking about methods of getting finance from abroad. And if we get some money or even if we just get a promise of it, our newspapers, our radio, and our leaders, all advertise the fact in order that every person shall know that salvation is coming, or is on the way. If we receive a girt we announce it, if we receive a loan we announce it, if we get a new factory we announce it – and always loudly. In the same way, when we get a promise of a gift, a loan, or a new industry, we make an announcement of the promise. Even when we have merely started discussions with a foreign government or institution for a gift, a loan, or a new industry, we make an announcement – even though we do not know the outcome of the discussions. Why do we do all this? Because we want people to know that we have started discussions which will bring prosperity.
DO NOT LET US DEPEND UPON MONEY FOR DEVELOPMENT
It is stupid to rely on money as the major instrument of development when we know only too well that our country is poor. It is equally stupid, indeed it is even more stupid, for us to imagine that we shall rid ourselves of our poverty through foreign financial assistance rather than our own financial resources. It is stupid for two reasons.
Firstly, we shall not get the money. It is true that there are countries which can, and which would like to, help us. But there is no country in the world which is prepared to give us gifts or loans, or establish industries, to the extent that we would be able to achieve all our development targets. There are many needy countries in the world. And even if all the prosperous nations were willing to help the needy countries, the assistance would still not suffice. But in any case the prosperous nations have not accepted a responsibility to fight world poverty. Even within their own borders poverty still exists, and the rich individuals do not willingly give money to the government to help their poor fellow citizens.
It is only through taxation, which people have to pay whether they want to or not, that money can be extracted from the rich in order to help the masses. Even then there would not be enough money. However heavily we taxed the citizens of Tanzania and the aliens living here, the resulting revenue would not be enough to meet the costs of the development we want. And there is no World Government which can tax the prosperous nations in order to help the poor nations; nor if one did exist could it raise enough revenue to do all that is needed in the world. But in fact, such a World Government does not exist. Such money as the rich nations offer to the poor nations is given voluntarily, either through their own goodness, or for their own benefit. All this means that it is impossible for Tanzania to obtain from overseas enough money to develop our economy.
GIFTS AND LOANS WILL ENDANGER OUR INDEPENDENCE
Secondly, even if it were possible for us to get enough money for our needs from external sources, is this what we really want? Independence means self-reliance. Independence cannot be real if a nation depends upon gifts and loans from another for Its development. Even if there was a nation, or nations, prepared to give us all the money we need for our development, it would be improper for us to accept such assistance without asking ourselves how this would effect our independence and our very survival as a nation. Gifts which increase, or act as a catalyst, to our own efforts are valuable. Gifts which could have the effect of weakening or distorting our own efforts should not be accepted until we have asked ourselves a number of questions.
The same applies to loans. It is true that loans are better than ‘free’ gifts. A loan is intended to increase our efforts or make those fruitful. One condition of a loan is that you show how you are going to repay it. This means you have to show that you intend to use the loan profitably and will therefore be able to repay it.
But even loans have their limitations. You have to give consideration to the ability to repay. When we borrow money from other countries it is the Tanzanian who pays it back. And as we have already stated, Tanzania’s are poor people. To burden the people with big loans, the repayment of which will be beyond their means, is not to help them but to make them suffer. It is even worse when the loans they are asked to repay have not benefited the majority of the people but have only benefited a small minority.
How about the enterprises of foreign investors ? It is true we need these enterprises. We have even passed an Act of Parliament protecting foreign investments in this country. Our aim is to make foreign investors feel that Tanzania is a good place in which to invest because investments would be safe and profitable, and the profits can be taken out of the country without difficulty. We expect to get money through this method. But we cannot get enough. And even if we were able to convince foreign investors and foreign firms to undertake all the projects and programmes of economic development that we need, is that what we actually want to happen ?
Had we been able to attract investors from America and Europe to come and start all the industries and all the projects of economic development that we need in this country, could we do so without questioning ourselves?
Could we agree to leave the economy of our country in the hands of foreigners who would take the profits back to their countries? Or supposing they did not insist upon taking their profits away, but decided to reinvest them in Tanzania; could we really accept this situation without asking ourselves what disadvantages our nation would suffer? Would this allow the socialism we have said it is our objective to build ?
How can we depend upon gifts, loans, and investments from foreign countries and foreign companies without endangering our independence? The English people have a proverb which says, ‘He who pays the piper calls the tune’. How can we depend upon foreign governments and companies for the major part of our development without giving to those governments and countries a great part of our freedom to act as we please ? The truth is that we cannot.
Let us repeat. We made a mistake in choosing money – something we do not have – to be the big instrument of our development. We are making a mistake to think that we shall get the money from other countries; first, because in fact we shall not be able to get sufficient money for our economic development; and secondly, because even if we could get all that we need, such dependence upon others would endanger our independence and our ability to choose our own political policies.
WE HAVE PUT TOO MUCH EMPHASIS ON INDUSTRIES
Because of our emphasis on money, we have made another big mistake. We have put too much emphasis on industries. Just as we have said , ‘Without money there can be no development’, we also seem to say, ‘Industries arc the basis of development, without industries there is no development’. This is true The day when we have lots of money we shall be able to say we are a developed country. We shall be able to say, When we began our development plans we did not have enough money and this situation made it difficult for us to develop as fast as we wanted. Today we are developed and we have enough money. That is to say, our money has been brought by development. Similarly, the day we become industrialized we shall be able to say we are developed. Development would have us to have industries. The mistake we are making is to think that development begins with industries. It is a mistake because we do not have the means to establish many modern industries in our country. We do not have either the necessary finances or the technical know-how. It is not enough to say that we shall borrow the finances and the technicians from other countries to come and start the industries. The answer to this is the same one we gave earlier, that we cannot get enough money and borrow enough technicians to start all the industries we need. And even if we could get the necessary assistance, dependence on it could interfere with our policy on socialism. The policy of inviting a chain of capitalists to come and establish industries in our country might succeed in giving us all the industries we need but it would also succeed in preventing the establishment of socialism unless we believe that without first building capitalism, we cannot build socialism.
LET US PRAY AND HEED TO THE PEASANT
Our emphasis on money and industries has made us concentrate on urban development. We recognize that we do not have enough money to bring the kind of development to each village which would benefit everybody. We also know that we cannot establish an industry in each village and through this means erect a rise in the real incomes of the people. For these reasons we spend most of our money in the urban areas and our industries are established in the towns.
Yet the greater part of this money that we spend in the towns comes from loans. Whether it is use it to build schools, hospitals, houses or factories, etc., it still has to be repaid. But it is obvious that it cannot be repaid just out of money obtained from urban and industrial development. To repay the loans we have to use foreign currency which is obtained from the sale of our exports. But we do not now sell our industrial products in foreign markets, and indeed it is likely to be a long time before our industries produce for export. The main aim of our new industries is ‘import substitution’ – that is, to produce things which up to now we have had to import from foreign countries.
It is therefore obvious that the foreign currency we shall use to pay back the loans used in the development Or the urban areas will not come from the towns or the industries. Where, then, shall we get it from? We shall get it from the villages and from agriculture. What does this mean? It means that the people who benefit directly from development which is brought about by borrowed money are not the ones who will repay the loans. The largest proportion of the loans will be spent in, or for, the urban areas, but the largest proportion of the repayment will be made through the efforts of the farmers.
This fact should always be borne in mind, for there are various forms of exploitation. We must not forget that people who live in towns can possibly become the exploiters of those who live in the rural areas. All our big hospitals are in towns and they benefit only a small section of the people of Tanzania. Yet if we had built them with loans from outside Tanzania, it is the overseas sale of the peasants’ produce which provides the foreign exchanges for repayment. Those who do not get the benefit of the hospital thus carry the major responsibility for paying for them. Tarmac roads, too, are mostly found in towns and are of especial value to the motor-car owners. Yet if we have built those roads with loans, it is again the farmer who produces the goods which will pay for them. What is more, the foreign exchange with which the car was bought also came from the sale of the farmers’ produce. Again, electric lights, water pipes, hotels and other aspects of modern development are mostly found in towns. Most of them have been built with loans, and most of them do not benefit the farmer directly, although they will be paid for by the foreign exchange earned by the sale of his produce. We should always bear this in mind.
Although when we talk of exploitation we usually think of capitalists, we should not forget that there are many fish in the sea. They eat each other. The large ones eat the small ones, and small ones eat those who are even smaller. There are two possible ways of dividing the people in our country. We can put the capitalists and feudalists on one side, and the farmers and workers on the other. But we can also divide the people into urban dwellers on one side and those who live in the rural areas on the other. If we are not careful we might get to the position where the real exploitation in Tanzania is that of the town dwellers exploiting the peasants.
THE PEOPLE AND AGRICULTURE
The development of a country is brought about by people, not by money. Money, and the wealth it represents, is the result and not the basis of development. The four prerequisites of development are different; they are (i) People; (ii) Land; (iii) Good Policies; (iv) Good Leadership. Our country has more than ten million people1 and is are; is more than 362,000 square miles.
AGRICULTURE IS THE BASIS OF DEVELOPMENT
A great part of Tanzania’s land is fertile and gets sufficient rain. Our country can produce various crops for home consumption and for export.
We can produce food crops (which can be exported if we produce in large quantities) such as maize, rice, wheat, beans, groundnuts, etc. And we can produce such cash crops as sisal, cotton, coffee, tobacco, pyrethrum, tea, etc. Our land is also good for grazing cattle, goats, sheep, and for raising chickens, etc.; we can get plenty of fish from our rivers, lakes, and from the sea. All of our farmers are in areas which can produce two or three or even more of the food and cash crops enumerated above, and each farmer could increase his production so as to get more food or more money. And because the main aim of development is to get more food, and more money for our other needs our purpose must be to increase production of these agricultural crops. This is in fact the only road through which we can develop our country – in other words, only by increasing our production of these things can we get more food and more money for every Tanzanian.
THE CONDITIONS OF DEVELOPMENT
(a) Hard Work
Everybody wants development; but not everybody understands and accepts the basic requirements for development. The biggest requirement is hard work. Let us go to the villages and talk to our people and see whether or not it is possible for them to work harder.
In towns, for example, wage-earners normally work for seven and a half or eight hours a day, and for six or six and a half days a week. This is about 45 hours a week for the whole year, except for two or three weeks leave. In other words, a wage-earner works for 45 hours a week for 48 or 50 weeks of the year.
In or a country like ours these are really quite short working hours. In other countries, even those which are more developed than we are, people work for more than 45 hours a week. It is not normal for a young country to start with such a short working week. The normal thing is to begin with long working hours and decrease them as the country becomes more and more prosperous. By starting with such short working hours and asking for even shorter hours, we are in fact imitating the more developed countries. And we shall regret this imitation. Nevertheless, wage earners do work for 45 hours per week and their annual vacation does not exceed four weeks.
It would be appropriate to ask our farmers, especially the men, how many hours a week and how many weeks a year they work. Many do not even work for half as many hours as the wage-earner does. The truth is that in the villages the women work very hard. At times they work for 12 or 14 hours a day. They even work on Sundays and public holidays. Women who live in the villages work harder than anybody else in Tanzania. But the men who live in villages (and some of the women in towns) are on leave for half of their lire. The energies of the millions of men in the villages and thousands of women in the towns which are at present wasted in gossip, dancing and drinking, are a great treasure which could contribute more towards the development of our country than anything we could get from rich nations.
We would be doing something very beneficial to our country if we went to the villages and told our people that they hold this treasure and that it is up to them to use it for their own benefit and the benefit of our whole nation .
(b) Intelligence
The second condition of development is the use of intelligence. Unintelligent hard work would not bring the same good results as the two combined. Using a big hoe instead of a small one; using a plow pulled by oxen instead of an ordinary hoe; the use of fertilizers; the use of insecticides; knowing the right crop for a particular season or soil; choosing good seeds for planting; knowing the right time for planting, weeding, etc.; all these things show the use of knowledge and intelligence. And all of them combine with hard work to produce more and better results.
The money and time we spend on passing this knowledge to the peasants are better spent and bring more benefits to our country than the money and great amount of time we spend on other things which we call development.
These facts are well known to all of us. The parts of our Five-Year Development Plan which are on target, or where the target has been exceeded, are those parts which depend solely upon the people’s own hard work. The production of cotton, coffee, cashew nuts, tobacco and pyrethrum has increased enormously for the past three years. But these are things which are produced by hard work and the good leadership of the people, not by the use of great amounts of money.
Furthermore the people, through their own hard work and with a little help and leadership, have finished many development projects in the villages. They have built schools, dispensaries, community centers, and roads; they have dug wells, water channels, animal dips, small dams, and completed various other development projects. Had they waited for money, they would not now have the use of these things.
HARD WORK IS THE ROOT OF DEVELOPMENT
Some Plan projects which depend on money are going on well, but there are many which have stopped and others which might never be fulfilled because of lack of money. Yet still we talk about money and our search for money increases and takes nearly all our energies. We should not lessen our efforts to get the money we really need, but it would be more appropriate for us to spend time in the villages showing the people how to bring about development through their own efforts rather than going on so many long and expensive journeys abroad in search of development money. This is the real way to bring development to everybody in the country.
None of this means that from now on we will not need money or that we will not start industries or embark upon development projects which require money. Furthermore, we are not saying that we will not accept, or even that we shall not look for, money from other countries for our development. This is not what we are saying. We will continue to use money; and each year we will use more money for the various development projects than we uscd the previous year because this will be one of the signs of our development.
What we are saying, however, is that from now on we shall know what is the foundation and what is the fruit of development. Between money and people it is obvious that the people and their hard work are the foundation of development, and money is one of the fruits of that hard work.
From now on we shall stand upright and walk forward on our feet rather than look at this problem upside down. industries will come and money will come but their foundation is the people and their hard work, especially in AGRICULTURE. This is the meaning of self-reliance.
Our emphasis should therefore be on:
(a) The Land and Agriculture
(b) The People
(c) The Policy of Socialism and Self-Reliance, and
(d) Good Leadership.
(a) The Land
Because the economy of Tanzania depends and will continue to depend on agriculture and animal husbandry, Tanzanians can live well without depending on help from outside if they use their land properly. Land is the basis of human life and all Tanzanians should use it as a valuable investment for future development. Because the land belongs to the nation, the Government has to see to it that it is being used for the benefit of the whole nation and not for the benefit of one individual or just a few people.
It is the responsibility of TANU to see that the country produces enough food and enough cash crops for export. It is the responsibility of the Government and the co-operative societies to see to it that our people get the necessary tools, training and leadership in modern methods of agriculture.
(b) The People
In order properly to implement the policy of self-reliance, the people have to be taught the meaning of self-reliance and its practice. They must become self-sufficient in food, serviceable clothes and good housing.
In our country work should be something to be proud of, and laziness, drunkenness and idleness should be things to be ashamed of. And for the defense of our nation, it is necessary for us to be on guard against internal stooges who could be used by external enemies who aim to destroy us. The people should always be ready to defend their nation when they are called upon to do so.
(c) Good Policies
The principles of our policy of self-reliance go hand in hand with our policy of socialism. In order to prevent exploitation it is necessary for everybody to work and to live on his own labour. And in order to distribute the national wealth rairly, it is necessary for everybody to work to the maximum of his ability. Nobody should go and stay for a long time with his relative, doing no work, because in doing so he will be exploiting his relative. Likewise, nobody should be allowed to loiter in towns or villages without doing work which would enable him to be self-reliant without exploiting his relatives.
TANU believes that everybody who loves his nation has a duty to serve it by co-operating with his fellows in building the country for the benefit of all the people of Tanzania. In order to maintain our independence and our pcople’s freedom we ought to be self-reliant in every possible way and avoid depending upon other countries for assistance. If every individual is self-reliant ten-house cell will be self-reliant; if all the cells are self-reliant the whole ward will be self-reliant; and if the wards are self-reliant the District will be self-reliant. If the Districts arc self-reliant, then the Region is self-reliant, and if the Regions are self-reliant, then the whole nation is self-reliant and this our aim.
(d) Good Leadership
TANU recognizes the urgency and importance of good leadership. But we have not yet produced systematic training for our leaders; it is necessary that TANU Headquarters should now prepare a programme of training for all leaders – from the national level to the ten-house cell level – so that every one of them understands our political and economic policies. Leaders must set a good example to the rest of the people in their lives and in all their activities.
PART FOUR
TANU Membership
Since the Party was founded we have put great emphasis on getting as many members as possible. This was the right policy during the independence struggle. But now the National Executive feels that the time has come when we should put more emphasis on the beliefs of our Party and its policies of socialism.
That part of the TANU Constitution which relates to the admission of a member should be adhered to, and if it is discovered that a man does not appear to accept the faith, the objects, and the rules and regulations of the Party, then he should not be accepted as a member. In particular, it should not be forgotten that TANU is a party of peasants and workers.
PART FIVE
The Arusha Resolution
Therefore, the National Executive Committee, meeting in the Community Centre at Arusha from 26.1.67 to 29.1.67 resolves:
(a) The Leadership
1. Every TANU and Government leader must be either a peasant or a worker, and should in no way be associated with the practices or capitalism or feudalism.
2. No TANU or Government leader should hold shares in any company.
3. No TAN U or Government leader should hold directorships in any privately owned enterprise.
4. No TANU or Government leader should receive two or more salaries.
5. No TANU or Government leader should own houses which he rents to others.
6. For the purposes of this Resolution the term ‘leader’ should comprise the following:
Members of the TANU National Executive Committee; Ministers; Members of Parliament; senior officials of organizations affiliated to TANU; senior officers of par-statal organizations; all those appointed or elected under any clause of the TANU Constitution; councilors; and civil servants in the high and middle cadres. (In this context ‘leader’ means a man, or a man and his wife; a woman, or a woman and her husband.)
(b) The Government and other Institutions
1. Congratulates the Government for the steps it has taken so far in the implementation of the policy of socialism
2. Calls upon the Government to take further steps in the implementation of our policy of socialism as described in Part Two of this document without waiting for a Commission on Socialism.
3. Calls upon the Government to put emphasis, when preparing its development plans, on the ability of this country to implement the plans rather than depending on foreign loans and grants as has been done in the current Five-Year Development Plan. The National Executive Committee also resolves that the Plan should be amended so as to make it fit in with the policy of self-reliance.
4. Calls upon the Government to take action designed to ensure that the incomes of workers in the private sector are not very different from the incomes of workers in the public sector.
5. Calls upon the Government to put great emphasis on actions which will raise the standard of living of the peasants, and the rural community.
6. Calls upon NUTA, the co-operatives, TAPA, UWT, TYL, and other Government institutions to take steps to implement the policy of socialism and self-reliance.
(c) Membership
Members should get thorough teaching on Party ideology so that they may understand it, and they should always be reminded of the importance of living up to its principles.
Nyerere Archive
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./articles/Nyerere-Julius/https:..www.marxists.org.subject.africa.nyerere.1998.10.13 | <body>
<p class="title">Marxism in Africa</p>
<h1>Good Governance for Africa</h1>
<h2>By Julius Nyerere<br>
13 October 1998</h2>
<hr class="end">
<p class="information"><span class="term">Written:</span> by Julius Nyerere, 1998;<br>
<span class="info">Transcribed by:</span> <a href="mailto:AndyM@jse.co.za">Ayanda Madyibi</a>.</p>
<hr class="end">
<p class="fst"><em>Governance in Africa, says the Chairman of the South
Commission, must be improved for the continent's countries and people to build
real freedom and real development. However, his definition of good governance is
different from the one used by the rich countries in meting out aid to poor
nations. </em></p>
<p>A few years ago, I attended a meeting of the Global Coalition for Africa
(GCA) in Harare, Zimbabwe. It was chaired by the former President of Botswana,
Masire, and attended by a substantial number of African Heads of State. From
outside Africa, it was attended by the two Co-Chairmen of the GCA, Robert
MacNamara from the United States and Ian Pronk from the Netherlands, and a large
number of officials from the donor community. </p>
<p>At a certain point in the course of the discussion, the question of good
governance in Africa came up. But it came up as a condition of giving aid to
African countries. The manner of the discussion and the fact that this was an
exchange between African Heads of State and officials from rich countries made
me livid with anger. </p>
<h3>Notion of the 'Deserving Poor' </h3>
<p>It reminded me of the social history of Great Britain before the advent of
the welfare state. The extremes of individual or family poverty within that
country were dealt with through the philanthropy of rich persons to whom such
human misery was unbearable. But their charity was given only to those they
regarded as the 'deserving poor'. This, in practice, meant that it was given
only to those people regarded by the philanthropist as having demonstrated an
acceptance of the social and economic status quo - and for as long as they did
so. </p>
<p>As the world's powerful nations have not (as yet) accepted the principle of
international welfare, they apply the same 'deserving poor' notion to the
reality of poverty outside their own countries. 'Aid' and non-commercial credit
are regarded not as springing from the principles of human rights or
international solidarity, regardless of national borders, but as charity
extended as a matter of altruism by richer governments to the less developed and
very poor nations. However, the quantity of this 'official' charity being
increasingly inadequate to meet the most obvious needs, one of the criteria for
a nation being classified as among the world's 'deserving pooor' came to be
having 'good governance' as defined by the donor community. </p>
<p>And in practice that phrase meant and means those countries having
multi-party systems of democracy, economies based on the principle of private
ownership and of international free trade and a good record of human rights:
again as defined by the industrialised market economy countries of the North. It
was in this kind of context that we in Africa first heard about 'good
governance'; and this was the manner in which it was brought up at the Harare
meeting to which I have referred. </p>
<p>It was this aid-related discussion of good governance, a matter between aid
givers and aid seekers, and the arrogant and patronising manner in which it was
raised by the aid givers, that discredited the whole subject in the eyes of many
of us in Africa and other parts of the South. For used in this manner, good
governance sounded like a tool for neo-colonialism. We have therefore tended to
despise the concept even as, out of necessity, we try to qualify under it. </p>
<p>I am very far from being alone in rejecting neo-colonialism regardless of the
methods adopted to bring it about or to enforce it or to define it! Yet we
cannot avoid the fact that a lot of our problems in Africa arise from bad
governance. I believe that we need to improve governance everywhere in Africa in
order to enable our people to build real freedom and real development for
themselves and their countries. And I allowed myself to be persuaded to be a
'convenor' of this Conference on Governance in Africa because I believe that it
provides an opportunity for us to understand more about our past political and
economic policy mistakes and see how we can improve the management of our
affairs as we grope towards the 21st century. </p>
<h3>Government vs Governance </h3>
<p>Governments bear the final responsibility for the state of the nation - its
internal and external peace, and the well-being of its people. It is the
distinction between the words 'governance' and 'government' which draws
attention to the reality that, despite its enforcement agencies, government (in
the sense of the executive authority) is not the sole determinant of whether
those responsibilities are fulfilled. For there are always other forces within a
country which, in practice, can help or hinder the effectiveness of a
government, and which it therefore ignores at its peril. </p>
<p>Government is an instrument of State. Today there is a call, emanating from
the North, for the weakening of the State. In my view, Africa should ignore this
call. Our States are so weak and anaemic already that it would almost amount to
a crime to weaken them further. We have a duty to strengthen the African States
in almost every aspect you can think of; one of the objectives of improving the
governance of our countries is to strengthen the African State and thus enable
it to serve the people of Africa better. </p>
<p>One result of weakening the State can be observed in Somalia. There are many
potential Somalias in Africa if we heed the Northern call to weaken the State.
In any case, dieting and other slimming exercises are appropriate for the
opulent who over-eat, but very inappropriate for the emaciated and starving!
</p>
<p>Incidentally, the world has changed indeed! The withering of the State used
to be the ultimate objective of good Marxists. Today the weakening of the State
is the immediate objective of free-marketeers! </p>
<p>In advocating a strong State, I am not advocating an overburdened State, nor
a State with a bloated bureaucracy. To advocate for a strong State is to
advocate for a State which, among other things, has power to act on behalf of
the people in accordance with their wishes. And in a market economy, with its
law of the jungle, we need a State that has the capacity to intervene on behalf
of the weak. </p>
<p>No State is really strong unless its government has the full consent of at
least the majority of its people; and it is difficult to envisage how that
consent can be obtained outside democracy. So a call for a strong State is not a
call for dictatorship either. Indeed all dictatorships are basically weak;
because the means they apply in governance make them inherently unstable. </p>
<p>The key to a government's effectiveness and its ability to lead the nation
lies in a combination of three elements. First its closeness to its people, and
its responsiveness to their needs and demands; in other words, democracy.
Secondly, its ability to coordinate and bring into a democratic balance the many
functional and often competing sectional institutions which groups of people
have created to serve their particular interests. And thirdly, the efficiency of
the institutions (official and unofficial) by means of which its decisions are
made known and implemented throughout the country. </p>
<h3>Ingredients for Democracy </h3>
<p>It goes without saying that all of the institutions must be rooted in and
appropriate to the society to which they are applied. The machinery through
which a government stays close to the people and the people close to their
government will differ according to the history, the demographic distribution,
the traditional culture (or cultures), and the prevailing international
political and economic environment in which it has to operate. For 'democracy'
means much more than voting on the basis of adult suffrage every few years; it
means (among other things) attitudes of toleration, and willingness to cooperate
with others on terms of equality. </p>
<p>An essential ingredient in democracy is that it is based on the equality of
all the people within a nation's boundary, and that all the laws of the land
apply to all adults without exception. The nation's constitution must provide
methods by which the people can, without recourse to violence, control the
government which emerges in accordance with it and even specify the means for
its own amendment. In shorthand, the constitution itself must be based on the
principles of the rule of law. </p>
<p>It is inevitably the government which is responsible for upholding the role
of law within the State. This, together with the making of laws, is one of the
most important of its responsibilities to the people. But the government itself
is subject to the constitution. All heads of state swear to honour and protect
the constitution. this is as it should be; for the constitution is the supreme
law of the land. We cannot respect ordinary laws of the State if we do not
respect the constitution under which they were promulgated. A scrupulous respect
for the constitution is the basis of the principle of the rule of law. </p>
<p>This is an area where we need to be very careful. Presidents, prime
ministers, and sometimes all members of a government, seek to amend a
constitution in their own favour even when they come to office through, and
because of, the provisions of a constitution which they have sworn to honour.
</p>
<p>Too often, for example, we have seen presidents seek to lengthen the number
of terms they serve, despite the limit laid down in the constitution. This
practice is wrong. It cheapens the constitution of the country concerned. </p>
<p>If and when experience shows that the restriction laid down in the
constitution is too restrictive and needs to be changed (which in my view should
be very very rare), the change should not lengthen the term of the current
office-holder, who is bound in honour to observe the restriction under which he
or she was elected in the first place. And in any case, and more importantly,
the first president to be elected under a restricted term of office must never
change the constitution to lengthen that term. If he or she does it, it is
difficult to see how subsequent presidents can honour the new restriction. </p>
<p>Furthermore, if the provision of a limited term of office irks one president
or prime minister, another provision of the constitution could irk another
president or prime minister. We might then expect the constitution of the
country to be changed after every general election. This is a point which in my
view needs great emphasis. No Respect for the Consitution leads to No Basis for
the Rule of Law. </p>
<p>About the nature of government machinery - vitally important as that is to
the maintenance (or establishment) of peace, justice, and the people's
well-being - I need say little. A number of the previously circulated papers
provide an excellent basis for serious consideration of this topic and its
manifold implications for good governance. I would, however, like to emphasise
one or two related points. </p>
<h3>Costs of Democracy </h3>
<p>All the institutions and processes of democracy and democratic administration
cost a great deal of money to establish, to maintain, and to operate. That
applies equally to official and spontaneous unofficial institutions - and to
cooperation among them. </p>
<p>Further, to be effective all such structures rely heavily upon the existence
of a politically conscious civil society, which is active, organised and alert.
Such a civil society will have a good understanding about the existence and
functions of the different institutions, and about both their powers and the
constitutional limits to their power. Dictators generally prefer an ignorant and
passive or malleable population. It is easier to manipulate such a population
and parade the result as Peoples' Participation. </p>
<p>Yet Africa is at present poverty-stricken. I am the first to admit that a
country does not have to be rich in order to be democratic. But a minimum amount
of resources is needed in order to meet some minimum requirements of good
governance. In Africa today, even the high echelons of the civil service receive
salaries inadequate to keep a family for a month, and the minimum wage is
derisory; and all salaries (especially of teachers and health workers) are
frequently delayed. Nor have the people in general been the beneficiaries at any
time of a well-organised education system directed at enlarging public
understanding of and active participation in modern democratic institutions and
processes. </p>
<p>Poverty is an enemy of good governance, for persistent poverty is a
destabiliser, especially if such poverty is shared in a grossly unequal manner,
or is widely regarded as being unfairly distributed as the few who are
relatively rich indulge in conspicuous consumption. Known or suspected
corruption among the political leaders often makes the problem worse - and
corruption throughout the society more difficult to overcome. Good wages or
salaries will not stop bad people from being corrupt; but miserable wages and
salaries are not conducive to rectitude. Political instability, real or
imagined, can be a source, and is often used as an excuse, for bad governance.
</p>
<h3>Corruption </h3>
<p>But to say this is very different from saying that because Africa is poor,
Africans do not deserve good governance. This continent is not distinguished for
its good governance of the peoples of Africa. But without good governance, we
cannot eradicate poverty; for no corrupt government is interested in the
eradication of poverty; on the contrary, and as we have seen in many parts of
Africa and elsewhere, widespread corruption in high places breed poverty. </p>
<p>Nor in saying this am I asking readers to accept the widespread belief that
Africa has more corrupt, tyrannical, and power-hungry elites, than have other
continents either now or historically. While avoiding the living and naming only
a few of the dead, it is surely easy to see, in the past 75 years alone, our
Mobutus, Iddi Amins, Bokassas, and military juntas, of Europe and elsewhere.
</p>
<p>In all European countries where the term of office is not limited by the
constitution, my fellow politicians there pride themselves on how long or how
short they remain in power. The trouble is that our Amins and Bokassas and
Mobutus are Africans; but the Francos, Hitlers and Mussolinis are Spanish,
Germans or Italians; and Africa played no role in putting them in power. </p>
<p>Rather than conduct a post-mortem, we should try to help Africa and African
countries to move forward from where we are now by addressing the central issue
of building and strengthening the institutional framework of our continent and
its countries. In doing so, to face the realities of Africa - all of them. </p>
<p>Those internal, where our theoretically sovereign nations find their freedom
to act is obstructed by the depth of our poverty and technological backwardness.
And those realities external to us and beyond our control, in relation to which
we are like a collection of pygmies in a world where giants stalk, and from
where modern and constantly changing technology floods outwards over the world
like an irresistible tide. </p>
<h3>The Ignored Truth </h3>
<p>Most countries of Africa are now once again 'coping' with the worst of their
economic problems, and some are making well-based progress towards better living
conditions for their people. We hear little about such difficult triumphs over
adversity in the context of such things as international recessions and violent
changes in primary commodity prices. </p>
<p>Most of our countries are now living in a state of internal peace, and a
peace which is deepening; we do not hear such peace unless it is broken. Despite
the artificial and often unclear national borders of Africa, our States have
very largely avoided violent conflict among themselves. Despite the histories of
other continents, that accomplishment is ignored - even within Africa. </p>
<p>And although this important success has been achieved largely through the
work of the Organisation of African Unity (which African States themselves
established), the media and the international community generally refer to the
OAU with derision - if at all. Our children's expectation of life, and all that
those statistics imply, has greatly improved - except where countries became the
direct or indirect surrogates in Cold War conflicts, or were for other special
reasons among the countries involved in prolonged civil strife. </p>
<p>Africa does now have a core of highly educated and internationally recognised
experts in different fields. Given the number of technicallyand professionally
educated Africans in our countries at independence, and the paucity of secondary
or tertiary educational institutions at that time, the number of high-calibre
experts in Africa is now much larger than could reasonably have been expected
after this lapse of time. Perhaps we are misusing them, but they are there now.
At independence, some of our countries had no trained people at all. </p>
<p>Finally, good or bad, the first generation of our leaders is fast being
replaced by the second or even the third; most of these are better-educated,
relatively free from the mental hang-overs of colonialism, and have had the
opportunity to learn from the mistakes and the successes of their predecessors.
With the help of work done at different fora, I am confident that African
States, individually and in cooperation with one another, can step by step and
in an ordered fashion, move towards Good Governance. </p>
<p>The OAU exists and assists in the maintenance or restoration of peace and
cooperation within Africa, even if it too is severely weakened in action and
capacity by its lack of resources. Some sub-regional organisations are making
limited but useful contributions to stability, peace and economic progress in
their respective areas. </p>
<p>The machinery of government and of unofficial institutions within African
States can facilitate or hinder movement towards greater intra-African
cooperation. And in addition, the all-African institutions, as well as those
working on a sub-regional basis, may well be able to benefit by it - provided
the actors bear in mind the prospective importance of the role these
intra-African institutions can play in strengthening us all. - Third World
Network Features </p>
<p class="skip"> </p>
<hr class="end">
<p class="footer"><a href="../../../index.htm">Marxism in Africa</a> |
<a href="../../index.htm">Julius Nyerere</a>
</p>
</body> |
Marxism in Africa
Good Governance for Africa
By Julius Nyerere
13 October 1998
Written: by Julius Nyerere, 1998;
Transcribed by: Ayanda Madyibi.
Governance in Africa, says the Chairman of the South
Commission, must be improved for the continent's countries and people to build
real freedom and real development. However, his definition of good governance is
different from the one used by the rich countries in meting out aid to poor
nations.
A few years ago, I attended a meeting of the Global Coalition for Africa
(GCA) in Harare, Zimbabwe. It was chaired by the former President of Botswana,
Masire, and attended by a substantial number of African Heads of State. From
outside Africa, it was attended by the two Co-Chairmen of the GCA, Robert
MacNamara from the United States and Ian Pronk from the Netherlands, and a large
number of officials from the donor community.
At a certain point in the course of the discussion, the question of good
governance in Africa came up. But it came up as a condition of giving aid to
African countries. The manner of the discussion and the fact that this was an
exchange between African Heads of State and officials from rich countries made
me livid with anger.
Notion of the 'Deserving Poor'
It reminded me of the social history of Great Britain before the advent of
the welfare state. The extremes of individual or family poverty within that
country were dealt with through the philanthropy of rich persons to whom such
human misery was unbearable. But their charity was given only to those they
regarded as the 'deserving poor'. This, in practice, meant that it was given
only to those people regarded by the philanthropist as having demonstrated an
acceptance of the social and economic status quo - and for as long as they did
so.
As the world's powerful nations have not (as yet) accepted the principle of
international welfare, they apply the same 'deserving poor' notion to the
reality of poverty outside their own countries. 'Aid' and non-commercial credit
are regarded not as springing from the principles of human rights or
international solidarity, regardless of national borders, but as charity
extended as a matter of altruism by richer governments to the less developed and
very poor nations. However, the quantity of this 'official' charity being
increasingly inadequate to meet the most obvious needs, one of the criteria for
a nation being classified as among the world's 'deserving pooor' came to be
having 'good governance' as defined by the donor community.
And in practice that phrase meant and means those countries having
multi-party systems of democracy, economies based on the principle of private
ownership and of international free trade and a good record of human rights:
again as defined by the industrialised market economy countries of the North. It
was in this kind of context that we in Africa first heard about 'good
governance'; and this was the manner in which it was brought up at the Harare
meeting to which I have referred.
It was this aid-related discussion of good governance, a matter between aid
givers and aid seekers, and the arrogant and patronising manner in which it was
raised by the aid givers, that discredited the whole subject in the eyes of many
of us in Africa and other parts of the South. For used in this manner, good
governance sounded like a tool for neo-colonialism. We have therefore tended to
despise the concept even as, out of necessity, we try to qualify under it.
I am very far from being alone in rejecting neo-colonialism regardless of the
methods adopted to bring it about or to enforce it or to define it! Yet we
cannot avoid the fact that a lot of our problems in Africa arise from bad
governance. I believe that we need to improve governance everywhere in Africa in
order to enable our people to build real freedom and real development for
themselves and their countries. And I allowed myself to be persuaded to be a
'convenor' of this Conference on Governance in Africa because I believe that it
provides an opportunity for us to understand more about our past political and
economic policy mistakes and see how we can improve the management of our
affairs as we grope towards the 21st century.
Government vs Governance
Governments bear the final responsibility for the state of the nation - its
internal and external peace, and the well-being of its people. It is the
distinction between the words 'governance' and 'government' which draws
attention to the reality that, despite its enforcement agencies, government (in
the sense of the executive authority) is not the sole determinant of whether
those responsibilities are fulfilled. For there are always other forces within a
country which, in practice, can help or hinder the effectiveness of a
government, and which it therefore ignores at its peril.
Government is an instrument of State. Today there is a call, emanating from
the North, for the weakening of the State. In my view, Africa should ignore this
call. Our States are so weak and anaemic already that it would almost amount to
a crime to weaken them further. We have a duty to strengthen the African States
in almost every aspect you can think of; one of the objectives of improving the
governance of our countries is to strengthen the African State and thus enable
it to serve the people of Africa better.
One result of weakening the State can be observed in Somalia. There are many
potential Somalias in Africa if we heed the Northern call to weaken the State.
In any case, dieting and other slimming exercises are appropriate for the
opulent who over-eat, but very inappropriate for the emaciated and starving!
Incidentally, the world has changed indeed! The withering of the State used
to be the ultimate objective of good Marxists. Today the weakening of the State
is the immediate objective of free-marketeers!
In advocating a strong State, I am not advocating an overburdened State, nor
a State with a bloated bureaucracy. To advocate for a strong State is to
advocate for a State which, among other things, has power to act on behalf of
the people in accordance with their wishes. And in a market economy, with its
law of the jungle, we need a State that has the capacity to intervene on behalf
of the weak.
No State is really strong unless its government has the full consent of at
least the majority of its people; and it is difficult to envisage how that
consent can be obtained outside democracy. So a call for a strong State is not a
call for dictatorship either. Indeed all dictatorships are basically weak;
because the means they apply in governance make them inherently unstable.
The key to a government's effectiveness and its ability to lead the nation
lies in a combination of three elements. First its closeness to its people, and
its responsiveness to their needs and demands; in other words, democracy.
Secondly, its ability to coordinate and bring into a democratic balance the many
functional and often competing sectional institutions which groups of people
have created to serve their particular interests. And thirdly, the efficiency of
the institutions (official and unofficial) by means of which its decisions are
made known and implemented throughout the country.
Ingredients for Democracy
It goes without saying that all of the institutions must be rooted in and
appropriate to the society to which they are applied. The machinery through
which a government stays close to the people and the people close to their
government will differ according to the history, the demographic distribution,
the traditional culture (or cultures), and the prevailing international
political and economic environment in which it has to operate. For 'democracy'
means much more than voting on the basis of adult suffrage every few years; it
means (among other things) attitudes of toleration, and willingness to cooperate
with others on terms of equality.
An essential ingredient in democracy is that it is based on the equality of
all the people within a nation's boundary, and that all the laws of the land
apply to all adults without exception. The nation's constitution must provide
methods by which the people can, without recourse to violence, control the
government which emerges in accordance with it and even specify the means for
its own amendment. In shorthand, the constitution itself must be based on the
principles of the rule of law.
It is inevitably the government which is responsible for upholding the role
of law within the State. This, together with the making of laws, is one of the
most important of its responsibilities to the people. But the government itself
is subject to the constitution. All heads of state swear to honour and protect
the constitution. this is as it should be; for the constitution is the supreme
law of the land. We cannot respect ordinary laws of the State if we do not
respect the constitution under which they were promulgated. A scrupulous respect
for the constitution is the basis of the principle of the rule of law.
This is an area where we need to be very careful. Presidents, prime
ministers, and sometimes all members of a government, seek to amend a
constitution in their own favour even when they come to office through, and
because of, the provisions of a constitution which they have sworn to honour.
Too often, for example, we have seen presidents seek to lengthen the number
of terms they serve, despite the limit laid down in the constitution. This
practice is wrong. It cheapens the constitution of the country concerned.
If and when experience shows that the restriction laid down in the
constitution is too restrictive and needs to be changed (which in my view should
be very very rare), the change should not lengthen the term of the current
office-holder, who is bound in honour to observe the restriction under which he
or she was elected in the first place. And in any case, and more importantly,
the first president to be elected under a restricted term of office must never
change the constitution to lengthen that term. If he or she does it, it is
difficult to see how subsequent presidents can honour the new restriction.
Furthermore, if the provision of a limited term of office irks one president
or prime minister, another provision of the constitution could irk another
president or prime minister. We might then expect the constitution of the
country to be changed after every general election. This is a point which in my
view needs great emphasis. No Respect for the Consitution leads to No Basis for
the Rule of Law.
About the nature of government machinery - vitally important as that is to
the maintenance (or establishment) of peace, justice, and the people's
well-being - I need say little. A number of the previously circulated papers
provide an excellent basis for serious consideration of this topic and its
manifold implications for good governance. I would, however, like to emphasise
one or two related points.
Costs of Democracy
All the institutions and processes of democracy and democratic administration
cost a great deal of money to establish, to maintain, and to operate. That
applies equally to official and spontaneous unofficial institutions - and to
cooperation among them.
Further, to be effective all such structures rely heavily upon the existence
of a politically conscious civil society, which is active, organised and alert.
Such a civil society will have a good understanding about the existence and
functions of the different institutions, and about both their powers and the
constitutional limits to their power. Dictators generally prefer an ignorant and
passive or malleable population. It is easier to manipulate such a population
and parade the result as Peoples' Participation.
Yet Africa is at present poverty-stricken. I am the first to admit that a
country does not have to be rich in order to be democratic. But a minimum amount
of resources is needed in order to meet some minimum requirements of good
governance. In Africa today, even the high echelons of the civil service receive
salaries inadequate to keep a family for a month, and the minimum wage is
derisory; and all salaries (especially of teachers and health workers) are
frequently delayed. Nor have the people in general been the beneficiaries at any
time of a well-organised education system directed at enlarging public
understanding of and active participation in modern democratic institutions and
processes.
Poverty is an enemy of good governance, for persistent poverty is a
destabiliser, especially if such poverty is shared in a grossly unequal manner,
or is widely regarded as being unfairly distributed as the few who are
relatively rich indulge in conspicuous consumption. Known or suspected
corruption among the political leaders often makes the problem worse - and
corruption throughout the society more difficult to overcome. Good wages or
salaries will not stop bad people from being corrupt; but miserable wages and
salaries are not conducive to rectitude. Political instability, real or
imagined, can be a source, and is often used as an excuse, for bad governance.
Corruption
But to say this is very different from saying that because Africa is poor,
Africans do not deserve good governance. This continent is not distinguished for
its good governance of the peoples of Africa. But without good governance, we
cannot eradicate poverty; for no corrupt government is interested in the
eradication of poverty; on the contrary, and as we have seen in many parts of
Africa and elsewhere, widespread corruption in high places breed poverty.
Nor in saying this am I asking readers to accept the widespread belief that
Africa has more corrupt, tyrannical, and power-hungry elites, than have other
continents either now or historically. While avoiding the living and naming only
a few of the dead, it is surely easy to see, in the past 75 years alone, our
Mobutus, Iddi Amins, Bokassas, and military juntas, of Europe and elsewhere.
In all European countries where the term of office is not limited by the
constitution, my fellow politicians there pride themselves on how long or how
short they remain in power. The trouble is that our Amins and Bokassas and
Mobutus are Africans; but the Francos, Hitlers and Mussolinis are Spanish,
Germans or Italians; and Africa played no role in putting them in power.
Rather than conduct a post-mortem, we should try to help Africa and African
countries to move forward from where we are now by addressing the central issue
of building and strengthening the institutional framework of our continent and
its countries. In doing so, to face the realities of Africa - all of them.
Those internal, where our theoretically sovereign nations find their freedom
to act is obstructed by the depth of our poverty and technological backwardness.
And those realities external to us and beyond our control, in relation to which
we are like a collection of pygmies in a world where giants stalk, and from
where modern and constantly changing technology floods outwards over the world
like an irresistible tide.
The Ignored Truth
Most countries of Africa are now once again 'coping' with the worst of their
economic problems, and some are making well-based progress towards better living
conditions for their people. We hear little about such difficult triumphs over
adversity in the context of such things as international recessions and violent
changes in primary commodity prices.
Most of our countries are now living in a state of internal peace, and a
peace which is deepening; we do not hear such peace unless it is broken. Despite
the artificial and often unclear national borders of Africa, our States have
very largely avoided violent conflict among themselves. Despite the histories of
other continents, that accomplishment is ignored - even within Africa.
And although this important success has been achieved largely through the
work of the Organisation of African Unity (which African States themselves
established), the media and the international community generally refer to the
OAU with derision - if at all. Our children's expectation of life, and all that
those statistics imply, has greatly improved - except where countries became the
direct or indirect surrogates in Cold War conflicts, or were for other special
reasons among the countries involved in prolonged civil strife.
Africa does now have a core of highly educated and internationally recognised
experts in different fields. Given the number of technicallyand professionally
educated Africans in our countries at independence, and the paucity of secondary
or tertiary educational institutions at that time, the number of high-calibre
experts in Africa is now much larger than could reasonably have been expected
after this lapse of time. Perhaps we are misusing them, but they are there now.
At independence, some of our countries had no trained people at all.
Finally, good or bad, the first generation of our leaders is fast being
replaced by the second or even the third; most of these are better-educated,
relatively free from the mental hang-overs of colonialism, and have had the
opportunity to learn from the mistakes and the successes of their predecessors.
With the help of work done at different fora, I am confident that African
States, individually and in cooperation with one another, can step by step and
in an ordered fashion, move towards Good Governance.
The OAU exists and assists in the maintenance or restoration of peace and
cooperation within Africa, even if it too is severely weakened in action and
capacity by its lack of resources. Some sub-regional organisations are making
limited but useful contributions to stability, peace and economic progress in
their respective areas.
The machinery of government and of unofficial institutions within African
States can facilitate or hinder movement towards greater intra-African
cooperation. And in addition, the all-African institutions, as well as those
working on a sub-regional basis, may well be able to benefit by it - provided
the actors bear in mind the prospective importance of the role these
intra-African institutions can play in strengthening us all. - Third World
Network Features
Marxism in Africa |
Julius Nyerere
|
./articles/Secchia-Pietro/https:..www.marxists.org.archive.secchia.1944.our-war | <body>
<p class="title">Pietro Secchia 1944</p>
<h3>Our War</h3>
<hr class="end">
<p class="information"><span class="info">First published</span>: <em>Il Combattente</em>, January 1944, no. 5;<br>
<span class="info">Source</span>: <em>I Communisti e l’insurrezione</em>, 1943-45, Editori Riuniti, Roma, 1973;<br>
<span class="info">Translated</span>: by <a href="../../../admin/volunteers/biographies/mabidor.htm">Mitchell Abidor</a>;<br>
<span class="info">CopyLeft</span>: <a href="../../../admin/legal/cc/by-sa.htm">Creative Commons</a> (Attribute & ShareAlike) marxists.org 2007.</p>
<hr class="end">
<p>The fascist traitors, having put themselves at the service of the Germans, are emitting loud squeals for their sudden losses under the blows of the patriots. They speak of cowardly assassins, or horrible misdeeds, etc. What are the fascist hierarchs thinking? That they could betray the fatherland with impunity, place themselves openly in the service of the enemy without running any risk, without paying the price for their ignominious treason? Perhaps they thought they could make war against the Italians without their blood being spilled? What do all these wailings mean, these cries of indignation and fear on the part of the fascist hierarchs? Don’t they know that you go to war with two proverbial sacks, one for taking and one for giving?</p>
<p>The Italian people have declared war on Germany, and never has a war been more just or more sacred. The Italian government, the only legally existing government, interpreting the aspirations and e will of the entire Italian people, gave a legal dressing to this popular declaration of war. From that moment it was the pressing duty of every Italian to fight with all his might and with all his means to chase the Germans from our soil. </p>
<p>However, at that moment hordes of degenerate Italians, calling themselves republican-fascists, betraying as they have always betrayed the interests of the fatherland, aligned themselves with the Germans and are carrying out, at their service, the fight against the Italians, against the fatherland. </p>
<p>There has never been a more infamous betrayal, a betrayal that so cries to heaven for revenge; one which has kindled the most violent reaction on the part of the healthy portion of the Italian people which, despite all they suffered from the fascist regime, was so generous after July 24 as to spare the lives of all the fascist hierarchs. At the time there was no vengeance, no reprisals, no killings. </p>
<p>But after Italy’s declaration of war on Germany, from the moment this horde of traitors placed themselves at the service of the Germans, any consideration became a crime, any toleration a betrayal. From that moment the Italian patriots justly considered and treated as traitors to the fatherland the fascists in service to the Germans. </p>
<p>War is war. If you don’t want to be killed don’t go to war. He who doesn’t want to die by lead shouldn’t betray the fatherland. But these traitors still dare to accuse the patriots of cruelty and cowardice. The entire Italian people know the infamous crimes perpetrated for twenty years by the fascists, know how their German bosses conducted themselves in conquered nations. We are in open war, declared against Nazism and fascism, but the Nazi and fascist canaille doesn’t treat the patriots and partisans like soldiers, like combatants, but make them suffer unheard of tortures and sufferings. And then they have the shamelessness to cry out and get indignant, to try to move public opinion when the hierarchs responsible for so many infamies fall to the lead of a few popular avengers. They fall fulminating, but they fall the way one does in war, without torture, without being the object of cruelty and suffering. </p>
<p>Till now the partisans and the patriots have carried out the war like loyal and strong combatants, without abandoning themselves to the baseness and cruelty that only the fascist hyenas are capable of. But these people should know that if they continue to fail to treat the partisans and patriots as combatants, if they continue to arrest as hostages the family members of those who refuse to serve the Germans, if they continue to massacre innocent citizens in reprisal, well then, the patriots will know how to respond in the same way, to render blow for blow. The patriots, too, have fascist and German prisoners. The patriots, too, could begin to arrest family members of Messrs. Hierarchs and Messrs. Industrialists who collaborate with the Germans. Attention, Messrs Hierarchs and Messrs. Industrialists: don’t complain if your crimes and misdeeds were to fall upon your heads and those of your loved ones. Don’t cry out abut cowardice: you will have willed it. </p>
<p class="skip"> </p>
<hr class="end">
<p class="footer">
<a href="../index.htm"> Pietro Secchia Archive</a>
</p>
</body> |
Pietro Secchia 1944
Our War
First published: Il Combattente, January 1944, no. 5;
Source: I Communisti e l’insurrezione, 1943-45, Editori Riuniti, Roma, 1973;
Translated: by Mitchell Abidor;
CopyLeft: Creative Commons (Attribute & ShareAlike) marxists.org 2007.
The fascist traitors, having put themselves at the service of the Germans, are emitting loud squeals for their sudden losses under the blows of the patriots. They speak of cowardly assassins, or horrible misdeeds, etc. What are the fascist hierarchs thinking? That they could betray the fatherland with impunity, place themselves openly in the service of the enemy without running any risk, without paying the price for their ignominious treason? Perhaps they thought they could make war against the Italians without their blood being spilled? What do all these wailings mean, these cries of indignation and fear on the part of the fascist hierarchs? Don’t they know that you go to war with two proverbial sacks, one for taking and one for giving?
The Italian people have declared war on Germany, and never has a war been more just or more sacred. The Italian government, the only legally existing government, interpreting the aspirations and e will of the entire Italian people, gave a legal dressing to this popular declaration of war. From that moment it was the pressing duty of every Italian to fight with all his might and with all his means to chase the Germans from our soil.
However, at that moment hordes of degenerate Italians, calling themselves republican-fascists, betraying as they have always betrayed the interests of the fatherland, aligned themselves with the Germans and are carrying out, at their service, the fight against the Italians, against the fatherland.
There has never been a more infamous betrayal, a betrayal that so cries to heaven for revenge; one which has kindled the most violent reaction on the part of the healthy portion of the Italian people which, despite all they suffered from the fascist regime, was so generous after July 24 as to spare the lives of all the fascist hierarchs. At the time there was no vengeance, no reprisals, no killings.
But after Italy’s declaration of war on Germany, from the moment this horde of traitors placed themselves at the service of the Germans, any consideration became a crime, any toleration a betrayal. From that moment the Italian patriots justly considered and treated as traitors to the fatherland the fascists in service to the Germans.
War is war. If you don’t want to be killed don’t go to war. He who doesn’t want to die by lead shouldn’t betray the fatherland. But these traitors still dare to accuse the patriots of cruelty and cowardice. The entire Italian people know the infamous crimes perpetrated for twenty years by the fascists, know how their German bosses conducted themselves in conquered nations. We are in open war, declared against Nazism and fascism, but the Nazi and fascist canaille doesn’t treat the patriots and partisans like soldiers, like combatants, but make them suffer unheard of tortures and sufferings. And then they have the shamelessness to cry out and get indignant, to try to move public opinion when the hierarchs responsible for so many infamies fall to the lead of a few popular avengers. They fall fulminating, but they fall the way one does in war, without torture, without being the object of cruelty and suffering.
Till now the partisans and the patriots have carried out the war like loyal and strong combatants, without abandoning themselves to the baseness and cruelty that only the fascist hyenas are capable of. But these people should know that if they continue to fail to treat the partisans and patriots as combatants, if they continue to arrest as hostages the family members of those who refuse to serve the Germans, if they continue to massacre innocent citizens in reprisal, well then, the patriots will know how to respond in the same way, to render blow for blow. The patriots, too, have fascist and German prisoners. The patriots, too, could begin to arrest family members of Messrs. Hierarchs and Messrs. Industrialists who collaborate with the Germans. Attention, Messrs Hierarchs and Messrs. Industrialists: don’t complain if your crimes and misdeeds were to fall upon your heads and those of your loved ones. Don’t cry out abut cowardice: you will have willed it.
Pietro Secchia Archive
|
./articles/Secchia-Pietro/https:..www.marxists.org.archive.secchia.1948.italian-people | <body>
<p class="title">Pietro Secchia 1948</p>
<h3>Italian People in New Phase of Struggle</h3>
<hr>
<p class="information">
<span class="info">Written:</span> By Pietro Secchia, 1948;<br>
<span class="info">Source:</span> <i>For a Lasting Peace, for a People's Democracy!</i> Vol. 2, no. 12; June 15, 1948;<br>
<span class="info">Transcribed:</span> David Adams, March 2022.</p>
<hr>
<p>The result of the April general election did not demoralise the
mass of the working people of Italy. If anything, the May
strikes and discontent, which involved hundreds of thousands
of workers and peasants, demonstrated the strength and
fighting spirit of the forward elements of the Italian people.
The election struggle was but a phase, a very important phase,
it is true, in the life of the working people. And those who had
calculated on burying the Communist Party, the Popular
Democratic front and eight million Italians under the piles of
voting papers, appear ludicrous indeed. The press of the Italian
plutocracy and of American imperialism were somewhat rash
in proclaiming victory. The battle which the Popular Front
withstood during the election campaign, is being fought out in
the form of the democratic struggle and actions of the people.
In this struggle for its vital demands and wider political and
social aims, the working class is displaying its growing
strength.</p>
<p>The experience of the struggle during the recent weeks and
months is making it increasingly clear to millions of working
people that recovery cannot be brought about merely by
parliamentary action and by struggles of an economic
character. The election campaign helped shatter certain
illusions about quick and easy victories without struggle and
casualties—illusions of which the Party had warned
Communists and all the democratic forces. The draconic
repressions and blackmail which the Government and ruling
classes applied to achieve their victory revealed to the broad
masses of Italy the true colours of bourgeois pseudo-
democracy.</p>
<p>It has been said that in the course of a conversation with his
colleagues, the Minister of Police, Scelba, made this valuable
admission: “A ruling party which decides to hold an election
and then proves incapable of winning, is not a party but a
gathering of fools”. In this “Christian” fashion Scelba admitted
the colossal fraud practiced according to the American
prescription.</p>
<p>But constitutional and pacifist illusions have suffered yet
another blow. The police and military are being used in the
growing struggle between labour and capital.</p>
<p>With the intention of cashing in on their election “victory” the
big industrialists and landowners, supported by the
Government, have launched an offensive against the working
people.</p>
<p>This offensive aims to abolish or, at any rate, drastically to
curtail the gains won by the people since July 1943, to isolate
the working class, break working-class unity and split the trade
unions; it aims to secure additional profits at the expense of the
people and to force them to bear the brunt of foreign
imperialism. The recent strikes showed how vigorously the
working people are combating the offensive of reaction and
how they are preparing for the battle ahead.</p>
<h4>Growth of the Strike Movement</h4>
<p>As enumeration of the more important strikes and actions that
have taken place since polling day, April 18, reveals on the one
hand, the tense nature of the struggle and the militant spirit of
the workers.</p>
<p><b>April 25</b>—Notwithstanding the attempt of the Government to
prohibit all celebrations on the anniversary of the national
liberation, partisans and the people held big demonstrations. In
Milan, squads of police armoured cars and tanks failed to
disperse the demonstrators. Twenty workers were wounded by
the police.</p>
<p><b>April 30</b>—Discontent and lockouts at the Falc works in Milan.</p>
<p><b>May 1</b>—For the first time since the overthrow of fascism. May
Day was a day of celebration and struggle and nation-wide
stoppage of work. Monster demonstrations were held
throughout the country against the Government’s policy and in
support of trade union unity.</p>
<p><b>May 9, 10</b>—Demonstrations in Naples and Genoa, Questions
in the Senate, The General Confederation of Labour and the
Popular Front insist on the right of asylum for 35 Greek
patriots who had arrived from the Argentine and whom Scelba
wanted to hand over to Tsaldaris.</p>
<p><b>May 10</b>—General strike in Turin in protest against police raids
on local Communist Party organisations.
The beginning of the big agricultural labourers’ strike in the
Rome province, which lasted several days and ended in
complete victory.</p>
<p><b>May 11</b>—Strike of 50,000 agricultural labourers in Mantua
Province.</p>
<p><b>May 12</b>—Strike spreads to the Rovigo, Udine and Modena
provinces embracing 120,000 agricultural labourers who struck
work because of the violation of agreements by landowners
and Government, and who insisted on new collective
agreements.</p>
<p><b>May 16</b>—2,000 workers in the Upper Flumendosa Basin
(Sardinia) go on strike. Strike continued for more than a
fortnight.</p>
<p><b>May 17</b>—Gas workers win their demands. Strike of municipal
employees in Taranto.</p>
<p><b>May 19</b>—University students in Palermo protest against
increased fees and occupy the university premises.</p>
<p><b>May 20</b>—Workers of the SIMA works in Iesi (Ancona) occupy
premises to prevent dismantling equipment.</p>
<p><b>May 21</b>—After a 16-day strike the agricultural labourers of
Polesini win complete victory after smashing combined front
of the landlords.
Thousands of spinners in Cremona province go on strike,
demanding observance of labour agreement and payment of
deferred earnings. Many mills occupied by women operatives.
After several days, strike ends in complete victory.</p>
<p><b>May 22</b>—General protest strike declared in the provinces of
Venezia, Padua and Rovigo in reply to the police murder of a
strikers in Trecenta.
Agricultural labourers’ strike in Pisa province.
General strike of agricultural labourers in Bologna. Strike lasts
15 days.</p>
<p><b>May 23</b>—Students strike at Bari.</p>
<p><b>May 24</b>—Big demonstration in Milan in solidarity with the
people of Greece.
General strike in Modena province against police violation of
democratic liberties.</p>
<p><b>May 25</b>—General strike of auto-transport workers to win their
demands and recognition of their factory committees.</p>
<p><b>May 26</b>—Strike of 25,000 agricultural labourers in Cremona.</p>
<p><b>May 27</b>—Discontent among 60,000 tobacco workers in
Salento (Apulia). The factory committees decide to continue
the struggle until complete victory.</p>
<p><b>May 28</b>—Agricultural labourers in Milan area join the general
strike which has been in progress for several days already in
the Mantua, Bologna, Reggio Emilia, and Cremona provinces
and in different parts of Venezia. Total of 300,000 peasants on
strike.
On the same day general protest strike is declared in Cosenza
province against police persecution and in defence of
democratic liberties.
Workers declare a strike in the Ducati plant in Bazzano
(Bologna).</p>
<p><b>May 29</b>—General strike in Placenza.</p>
<p><b>May 30—</b>Strike of marker gardeners and horticulturists in
the Naples province.</p>
<p><b>May 31</b>—Monster demonstration of building workers,
unemployed and homeless in Bologna. Strikes of iron and steel
workers in Naples, electrical workers in the province of Reggio
Calabria and agricultural workers in the province of Cagliari.
The miners of Aragona (Sicily) occupy the pits in Enna and
remain underground for four days with little food or water.</p>
<p><b>June 1</b>—Mineworkers’ strike in Carbonia (Sardinia).</p>
<p><b>June 2</b>—Big demonstrations in all cities celebrate the
anniversary of the Republic. The demonstrations take the form
of protests against the Government’s violation of the
Republican Constitution.
Sharecroppers in Pesaro province demand more favourable
distribution of the harvest.</p>
<p><b>June 3</b>—Mineworkers declare a general strike in protest
against the closing down of industry miners in Valdarno,
Ragusa, Foggia, Aragona (Sicily).
Shipbuilding workers in Palermo who a month ago seized
shipyards declare a general strike in support of the iron and
steel workers.</p>
<p><b>June 4</b>—General strike in Bologna province in protest
against the arrest of four trade union officials and against
police persecution.</p>
<p>The above list refers only to the principal actions of Italy
since election day, April 18.</p>
<p>While these actions were, in the main, of an economic
character, they are important politically, from the point of view
of character, scale and duration, and because in the present
situation, they take on an altogether new aspect.</p>
<h4>Against the Marshall Plan</h4>
<p>Special note should be made of the action taken by the Palermo
shipbuilding workers. When the owners of the shipyard
decided to get rid of 78 workers, the other shipyard men
protested. The management of the shipyard walked out and the
workers took over and continued to run the yard. The
significance of this incident goes beyond the framework of
ordinary class solidarity.</p>
<p>Behind these events in the Palermo shipyard stood the Marshall
Plan, threatening Italy’s industry and the lives of her people.
In his message to Congress on December 20, last year, on the
Marshall Plan legislation, Truman said that United States
interests would be safeguarded better if commercial shipping
built during the war was leased or sold to Marshall countries.
Due to the steel shortage, the sale or leasing of these ships
would be related to the cutting of shipbuilding programmes in
the participating countries.</p>
<p>This explains why the Palermo shipyard was closed down. The
same thing applies to the unrest among mineworkers, the first
to feel the effects of the Marshall Plan. In Terni, Grosseto and
Sicily, they took action against the mines being closed. Like the
Palermo shipyard men, the mine-workers are fighting not only
for bread and work, but also to save Italy’s baste industry and
for the country’s economic and political independence. Once
again they show that the interests of the working class are
identical with the interests of the nation as a whole.</p>
<p>The students’ strikes are a new and important factor.
Undoubtedly they indicate a democratic and progressive
awakening of Italian students. The students are beginning to
protest at the clerical attacks against education and culture and
see for themselves that the Popular Democratic Front is
capable of breaking this reactionary onslaught.</p>
<h4>New Character of the Struggle</h4>
<p>The open interference by the government and the armed forces
on the side of the big industrialists and landowners are
changing the situation. The struggle of the working class is
taking on a new and sharper character.</p>
<p>All over the country the police are violating the people’s rights.
The fierce attacks on strikers, the atrocities of the carabinieri,
the arrests of strikers and trade union leaders are becoming the
order of the day.</p>
<p>Carabinieri and police continually open fire on demonstrators.
Today the police are doing the same job that the fascist mobs
did in 1921-22. In rural districts the and carabinieri are acting
as strike-breakers. In the south, police are actually besieging
towns and are conducting hundreds of unauthorised searches
and arrests.</p>
<p>The police state which has been created by de Gasperi,
supported by, Saragat’s “third force”, is turning the Italian
Republic—which, according to the Constitution, should be
“based on labour”—into a clerical republic based on machine-
guns and Scelba’s police clubs.</p>
<p>Because of the interference of the Government and the armed
forces, each strike becomes a pitched battle and each
demonstration a street fight. This year there is the danger that
even the fields may become battlefields.</p>
<p>However, the big capitalists, landowners and the gentlemen of
the Government are making a mistake if they think they can
smash the working class organisations with machine-guns.
Violence is encountering the vigorous resistance of the masses.
Every attack on the workers’ liberties, on their right to strike
and to organise, every violation of democratic liberties, will
only sharpen the struggle; economic strikes will develop into
political strikes, into the struggle for freedom and democracy.
The task of the Communists is to strengthen and consolidate
the Popular Democratic Front which should become even more
strongly the leading force in the broad mass movement.</p>
<p>For this it is necessary to maintain unity of action with the
Socialist Party, the basis on which the Popular Democratic
Front can, be strengthened and extended. We must prevent the
vanguard forces of the working class from becoming isolated.
The struggle for radical reforms, for freedom, peace and
independence can be successful only if the broad masses of the
people, and not just the vanguard, take part in this struggle. The
strikes must not be restricted to isolated actions, not even to
mass actions of a defensive and economic character. The task
of the Communist Party, of the trade unions and of the Popular
Democratic Front is to coordinate and lead these actions, and to
combine the struggle for day to day demands with the struggle
for structural and social reforms, to develop economic strikes
into political ones.</p>
<p>Our task is to guide the struggle throughout the country,
advance correct economic and political aims, take into account
the new character of the struggle, so that the solidarity and
alliance of the vanguard with the working people is
strengthened and ever broader sections of the population are
brought into the struggle.</p>
<p>There must be no concessions to illusions, to the hopes of any
“miracle” and to revolutionary phrase-mongering; no
concessions to those who advocate that “the worse things get,
the better it will be for us”, but a resolute struggle against the
opportunist influences of Social-Democracy. The entire party
must be mobilised to strengthen the unity and improve the
work of the trade unions!</p>
<p>Today not only the day to day interests of the workers,
agricultural labourers and peasants but also freedom, peace and
the future of the Italian people are menaced.</p>
<p>The working people of Italy, rallied around the Popular
Democratic Front, will be able to remove this threat and win a
better future for themselves. In this struggle for progress and
democracy the Communists will remain in the forefront.</p>
<p> </p>
<hr>
<p class="footer">
<a href="../index.htm">Secchia Archive</a></p>
</body> |
Pietro Secchia 1948
Italian People in New Phase of Struggle
Written: By Pietro Secchia, 1948;
Source: For a Lasting Peace, for a People's Democracy! Vol. 2, no. 12; June 15, 1948;
Transcribed: David Adams, March 2022.
The result of the April general election did not demoralise the
mass of the working people of Italy. If anything, the May
strikes and discontent, which involved hundreds of thousands
of workers and peasants, demonstrated the strength and
fighting spirit of the forward elements of the Italian people.
The election struggle was but a phase, a very important phase,
it is true, in the life of the working people. And those who had
calculated on burying the Communist Party, the Popular
Democratic front and eight million Italians under the piles of
voting papers, appear ludicrous indeed. The press of the Italian
plutocracy and of American imperialism were somewhat rash
in proclaiming victory. The battle which the Popular Front
withstood during the election campaign, is being fought out in
the form of the democratic struggle and actions of the people.
In this struggle for its vital demands and wider political and
social aims, the working class is displaying its growing
strength.
The experience of the struggle during the recent weeks and
months is making it increasingly clear to millions of working
people that recovery cannot be brought about merely by
parliamentary action and by struggles of an economic
character. The election campaign helped shatter certain
illusions about quick and easy victories without struggle and
casualties—illusions of which the Party had warned
Communists and all the democratic forces. The draconic
repressions and blackmail which the Government and ruling
classes applied to achieve their victory revealed to the broad
masses of Italy the true colours of bourgeois pseudo-
democracy.
It has been said that in the course of a conversation with his
colleagues, the Minister of Police, Scelba, made this valuable
admission: “A ruling party which decides to hold an election
and then proves incapable of winning, is not a party but a
gathering of fools”. In this “Christian” fashion Scelba admitted
the colossal fraud practiced according to the American
prescription.
But constitutional and pacifist illusions have suffered yet
another blow. The police and military are being used in the
growing struggle between labour and capital.
With the intention of cashing in on their election “victory” the
big industrialists and landowners, supported by the
Government, have launched an offensive against the working
people.
This offensive aims to abolish or, at any rate, drastically to
curtail the gains won by the people since July 1943, to isolate
the working class, break working-class unity and split the trade
unions; it aims to secure additional profits at the expense of the
people and to force them to bear the brunt of foreign
imperialism. The recent strikes showed how vigorously the
working people are combating the offensive of reaction and
how they are preparing for the battle ahead.
Growth of the Strike Movement
As enumeration of the more important strikes and actions that
have taken place since polling day, April 18, reveals on the one
hand, the tense nature of the struggle and the militant spirit of
the workers.
April 25—Notwithstanding the attempt of the Government to
prohibit all celebrations on the anniversary of the national
liberation, partisans and the people held big demonstrations. In
Milan, squads of police armoured cars and tanks failed to
disperse the demonstrators. Twenty workers were wounded by
the police.
April 30—Discontent and lockouts at the Falc works in Milan.
May 1—For the first time since the overthrow of fascism. May
Day was a day of celebration and struggle and nation-wide
stoppage of work. Monster demonstrations were held
throughout the country against the Government’s policy and in
support of trade union unity.
May 9, 10—Demonstrations in Naples and Genoa, Questions
in the Senate, The General Confederation of Labour and the
Popular Front insist on the right of asylum for 35 Greek
patriots who had arrived from the Argentine and whom Scelba
wanted to hand over to Tsaldaris.
May 10—General strike in Turin in protest against police raids
on local Communist Party organisations.
The beginning of the big agricultural labourers’ strike in the
Rome province, which lasted several days and ended in
complete victory.
May 11—Strike of 50,000 agricultural labourers in Mantua
Province.
May 12—Strike spreads to the Rovigo, Udine and Modena
provinces embracing 120,000 agricultural labourers who struck
work because of the violation of agreements by landowners
and Government, and who insisted on new collective
agreements.
May 16—2,000 workers in the Upper Flumendosa Basin
(Sardinia) go on strike. Strike continued for more than a
fortnight.
May 17—Gas workers win their demands. Strike of municipal
employees in Taranto.
May 19—University students in Palermo protest against
increased fees and occupy the university premises.
May 20—Workers of the SIMA works in Iesi (Ancona) occupy
premises to prevent dismantling equipment.
May 21—After a 16-day strike the agricultural labourers of
Polesini win complete victory after smashing combined front
of the landlords.
Thousands of spinners in Cremona province go on strike,
demanding observance of labour agreement and payment of
deferred earnings. Many mills occupied by women operatives.
After several days, strike ends in complete victory.
May 22—General protest strike declared in the provinces of
Venezia, Padua and Rovigo in reply to the police murder of a
strikers in Trecenta.
Agricultural labourers’ strike in Pisa province.
General strike of agricultural labourers in Bologna. Strike lasts
15 days.
May 23—Students strike at Bari.
May 24—Big demonstration in Milan in solidarity with the
people of Greece.
General strike in Modena province against police violation of
democratic liberties.
May 25—General strike of auto-transport workers to win their
demands and recognition of their factory committees.
May 26—Strike of 25,000 agricultural labourers in Cremona.
May 27—Discontent among 60,000 tobacco workers in
Salento (Apulia). The factory committees decide to continue
the struggle until complete victory.
May 28—Agricultural labourers in Milan area join the general
strike which has been in progress for several days already in
the Mantua, Bologna, Reggio Emilia, and Cremona provinces
and in different parts of Venezia. Total of 300,000 peasants on
strike.
On the same day general protest strike is declared in Cosenza
province against police persecution and in defence of
democratic liberties.
Workers declare a strike in the Ducati plant in Bazzano
(Bologna).
May 29—General strike in Placenza.
May 30—Strike of marker gardeners and horticulturists in
the Naples province.
May 31—Monster demonstration of building workers,
unemployed and homeless in Bologna. Strikes of iron and steel
workers in Naples, electrical workers in the province of Reggio
Calabria and agricultural workers in the province of Cagliari.
The miners of Aragona (Sicily) occupy the pits in Enna and
remain underground for four days with little food or water.
June 1—Mineworkers’ strike in Carbonia (Sardinia).
June 2—Big demonstrations in all cities celebrate the
anniversary of the Republic. The demonstrations take the form
of protests against the Government’s violation of the
Republican Constitution.
Sharecroppers in Pesaro province demand more favourable
distribution of the harvest.
June 3—Mineworkers declare a general strike in protest
against the closing down of industry miners in Valdarno,
Ragusa, Foggia, Aragona (Sicily).
Shipbuilding workers in Palermo who a month ago seized
shipyards declare a general strike in support of the iron and
steel workers.
June 4—General strike in Bologna province in protest
against the arrest of four trade union officials and against
police persecution.
The above list refers only to the principal actions of Italy
since election day, April 18.
While these actions were, in the main, of an economic
character, they are important politically, from the point of view
of character, scale and duration, and because in the present
situation, they take on an altogether new aspect.
Against the Marshall Plan
Special note should be made of the action taken by the Palermo
shipbuilding workers. When the owners of the shipyard
decided to get rid of 78 workers, the other shipyard men
protested. The management of the shipyard walked out and the
workers took over and continued to run the yard. The
significance of this incident goes beyond the framework of
ordinary class solidarity.
Behind these events in the Palermo shipyard stood the Marshall
Plan, threatening Italy’s industry and the lives of her people.
In his message to Congress on December 20, last year, on the
Marshall Plan legislation, Truman said that United States
interests would be safeguarded better if commercial shipping
built during the war was leased or sold to Marshall countries.
Due to the steel shortage, the sale or leasing of these ships
would be related to the cutting of shipbuilding programmes in
the participating countries.
This explains why the Palermo shipyard was closed down. The
same thing applies to the unrest among mineworkers, the first
to feel the effects of the Marshall Plan. In Terni, Grosseto and
Sicily, they took action against the mines being closed. Like the
Palermo shipyard men, the mine-workers are fighting not only
for bread and work, but also to save Italy’s baste industry and
for the country’s economic and political independence. Once
again they show that the interests of the working class are
identical with the interests of the nation as a whole.
The students’ strikes are a new and important factor.
Undoubtedly they indicate a democratic and progressive
awakening of Italian students. The students are beginning to
protest at the clerical attacks against education and culture and
see for themselves that the Popular Democratic Front is
capable of breaking this reactionary onslaught.
New Character of the Struggle
The open interference by the government and the armed forces
on the side of the big industrialists and landowners are
changing the situation. The struggle of the working class is
taking on a new and sharper character.
All over the country the police are violating the people’s rights.
The fierce attacks on strikers, the atrocities of the carabinieri,
the arrests of strikers and trade union leaders are becoming the
order of the day.
Carabinieri and police continually open fire on demonstrators.
Today the police are doing the same job that the fascist mobs
did in 1921-22. In rural districts the and carabinieri are acting
as strike-breakers. In the south, police are actually besieging
towns and are conducting hundreds of unauthorised searches
and arrests.
The police state which has been created by de Gasperi,
supported by, Saragat’s “third force”, is turning the Italian
Republic—which, according to the Constitution, should be
“based on labour”—into a clerical republic based on machine-
guns and Scelba’s police clubs.
Because of the interference of the Government and the armed
forces, each strike becomes a pitched battle and each
demonstration a street fight. This year there is the danger that
even the fields may become battlefields.
However, the big capitalists, landowners and the gentlemen of
the Government are making a mistake if they think they can
smash the working class organisations with machine-guns.
Violence is encountering the vigorous resistance of the masses.
Every attack on the workers’ liberties, on their right to strike
and to organise, every violation of democratic liberties, will
only sharpen the struggle; economic strikes will develop into
political strikes, into the struggle for freedom and democracy.
The task of the Communists is to strengthen and consolidate
the Popular Democratic Front which should become even more
strongly the leading force in the broad mass movement.
For this it is necessary to maintain unity of action with the
Socialist Party, the basis on which the Popular Democratic
Front can, be strengthened and extended. We must prevent the
vanguard forces of the working class from becoming isolated.
The struggle for radical reforms, for freedom, peace and
independence can be successful only if the broad masses of the
people, and not just the vanguard, take part in this struggle. The
strikes must not be restricted to isolated actions, not even to
mass actions of a defensive and economic character. The task
of the Communist Party, of the trade unions and of the Popular
Democratic Front is to coordinate and lead these actions, and to
combine the struggle for day to day demands with the struggle
for structural and social reforms, to develop economic strikes
into political ones.
Our task is to guide the struggle throughout the country,
advance correct economic and political aims, take into account
the new character of the struggle, so that the solidarity and
alliance of the vanguard with the working people is
strengthened and ever broader sections of the population are
brought into the struggle.
There must be no concessions to illusions, to the hopes of any
“miracle” and to revolutionary phrase-mongering; no
concessions to those who advocate that “the worse things get,
the better it will be for us”, but a resolute struggle against the
opportunist influences of Social-Democracy. The entire party
must be mobilised to strengthen the unity and improve the
work of the trade unions!
Today not only the day to day interests of the workers,
agricultural labourers and peasants but also freedom, peace and
the future of the Italian people are menaced.
The working people of Italy, rallied around the Popular
Democratic Front, will be able to remove this threat and win a
better future for themselves. In this struggle for progress and
democracy the Communists will remain in the forefront.
Secchia Archive
|
./articles/Secchia-Pietro/https:..www.marxists.org.archive.secchia.1973.masses-join | <body>
<p class="title">Pietro Secchia 1973</p>
<h3>The Masses Join in the Struggle</h3>
<hr class="end">
<p class="information"><span class="info">Source</span>: <em>Il partito communista e la guerra di Liberazione</em>. Feltrinelli, Milan, 1975;<br>
<span class="info">Translated</span>: by <a href="../../../admin/volunteers/biographies/mabidor.htm">Mitchell Abidor</a>;<br>
<span class="info">CopyLeft</span>: <a href="../../../admin/legal/cc/by-sa.htm">Creative Commons</a> (Attribute & ShareAlike) marxists.org 2008.</p>
<hr class="end">
<p>On November 15 1943, in all of the metallurgical factories of Turin the first general strike under the German occupation occurred. There then followed others in Genoa, in Milan and many other locales during the winter and until the end of the war of independence, until the April insurrection.</p>
<p>The Italian Resistance, unlike that of other countries, was characterized by the combining of the working masses with the military action of the partisans. The one supported and was presupposed by the development of the other. </p>
<p>The class struggle was a key propelling element that gave impulse to the development of the fight for national liberation. In every era the national struggle has had a class character, and in every historical period there were determined men, determined social classes that represented the interests of the nation. </p>
<p>There were men and political groups, also within the CLN (Committee for National Liberation) who had doubts about the possibility of successfully conducting the fight for national liberation if, at the same time, the parties of the workers favored and gave impulse to the developing of the class struggle, to the organization of strikes and to agitation in factories and fields. </p>
<p>On the contrary, we Communists thought it was possible to give a just start and give a powerful impulse to the fight for national liberation only if at the same time there the defense of immediate, economic and social interests, as well as the more general ones of the working classes were brought to the forefront. We never contented ourselves with or underestimated the class struggle, (which in any case would have been impossible); this was expressed not only in the actions against the German occupier, but against the big Nazi-fascist collaborationist industrialists. This was the political line, the constant goal of the leadership of the PCI in upper Italy, profoundly persuaded as we were that the interests of the working class were not in contrast with those of the nation. </p>
<p>All of the political strikes organized during the Resistance had economic demands as their point of departure and foundation. These were directed against the Nazi-fascists and the big collaborationist industrialists. The struggle for bread, for wages, against exploitation, in defense of dignity became at the same time national struggles for the chasing out of the German invader and the defeat of fascism. The workers were stimulated to action by the very conditions of their existence, but in its turn the thrust of the class struggle every day impelled and carried along an ever larger number of men to participate in the fight for liberation.</p>
<p>Economic demands were placed to the forefront either to “cover” as far as possible the strikers from German-fascist reaction, or because they touched all strata of the workers, from those who were in the vanguard to those who were most backwards, less evolved and who weren’t interested in politics but wanted to defend their own right to live.</p>
<p>But it would be a mistake to say that since economic demands were at the base of the agitation and propaganda for the strikes, the workers were led to act mainly because they were moved by economic interests. Most workers knew full well the risks they were running striking and sabotaging production. German and fascist terrorism made their weight felt and exerted their influence, even if in different amounts, throughout the period of the war of liberation. Wages, piece work, working hours, a greater amount of food and fuel were important things, but not to the point to drive the most advanced part of the workers to jeopardize their lives, to risk deportation in order to obtain an increase in their salary of a few liras or a slightly larger ration of awful olive oil. If they did this it was because they were moved not only by economic necessity but by idealist, social and national motives, by profound sentiments of hatred of fascism, of love of liberty and the conquest of independence; in many cases it was the aspiration for socialism, economic, political and idealist motives intermingled and were melded into one sole thrust in the same way that many streams debouch into one great river.</p>
<p>The fact that the working class managed to exercise its leading function in the struggle for national liberation, taking as its starting point the defense of its interests and aspirations, demonstrates the way the national struggle was something profoundly real, inseparable from the very conditions of the workers’ existence. In defending its own positions and affirming itself, the working class, at the head of the laboring masses, affirmed the interests of the people and the entire nation. This gave the Italian Resistance not only a mighty verve, but a progressive imprint that characterized it and distinguished it in a more marked way than that of other countries. </p>
<p>In Italy the Resistance was antifascist, and more than elsewhere fought against those groups of big capital that gave birth to fascism, supported its policies, and led the country to wars of aggression and catastrophe. And more than elsewhere the Resistance had a class character: there was at one and the same time a national and a social struggle both because of its content and because the working class was the main leading force. </p>
<p>And it was from the working class, from the parties and men who represented it, that there came the most advanced watchwords, proposals, the most correct indications and solutions, those which best corresponded to the interests of the whole people and the nation. During the Resistance as well the laboring classes fought against the groups of finance capital, against big capital, fought to conquer liberty for all citizens, for the workers, the peasants, for the oppressed classes; fought to give birth to a new political and social regime that would realize profound structural reforms and a true, effective, new democracy. </p>
<p>They fought to extirpate the roots of fascism, to liquidate the most iniquitous privileges of capital and large landowners. They were the representatives of the working class and laborers who, within the CLN, proposed and supported those programmatic demands that expressed profound popular aspirations; aspirations and objectives that, to be sure, didn’t correspond to the will and the designs of all the movements that more or less directly participated in the Resistance. Aspirations for a profound, radical economic and social renewal for which the workers, the most advanced sectors of the peasantry, of laborers, of progressive intellectuals fought that , to be sure, didn’t constitute the whole of Italian reality. Other classes, other parties acted in this situation within and outside the Resistance, and fought with varying and contrasting objectives for liberation solely through the work of the Anglo-Americans, aiming at the restoration of capitalism, the return to a regime of conservative democracy. From which came the discord in unity, and the continuous struggle within the CLN to have determined solutions and carry the movement as far forward as possible.</p>
<p>Initially the CLN was indifferent to the strike front, failing to assume a position of active solidarity and support; such an attitude corresponded to a different conception of the action to be carried out in order to reinforce the Resistance and the war of liberation. </p>
<p>The CLNAI indeed voted an order for a day of solidarity with the powerful movement pf the workers of Turin of November to December 1943, but did nothing to give concrete assistance to the movement itself and its development. </p>
<p>The representatives of some of the parties within the CLN maintained that the strikes touched on and hurt certain interests, weakened national unity and alienated from the CLN certain capitalist forces which at that moment were disposed to assist the war of national liberation.</p>
<p>Decisively rejecting these arguments, and maintaining that instead of braking we had the obligation to encourage the organization of the strikes , up to the general political strike in all of German-occupied Italy, up to an insurrectional strike. </p>
<p>We openly criticized the position of certain members of the CLN: for us unity was not a holy arc, an altar before which the interests of the working class and laborers must be sacrificed. </p>
<p>The CLN, if it really wanted to be the leading center of the war for national liberation had to be able not only to be in solidarity with, but had to also organize, assist, support, and strengthen to the highest degree the fight of the working class; had to be able to extend this struggle and other strata of the population participate in it...It was necessary that the CLN become a true combat organization, a truly leading organization of the war of national liberation. </p>
<p>Without denying that here and there were strikes that were relatively spontaneous, the majority of the strikes and agitation were organized. </p>
<p>Initially the Germans allowed the internal commissions to continue to exist; in this way they attempted to keep in their hands the means to control and put a brake on the working masses. The directive was given to all Communists and workers to hinder the internal commissions, to refuse to participate in them and not to participate in their elections. It was obvious that the Germans and the fascists, recognizing the internal commissions, held the workers participating in them responsible for all that occurred in the factories, the production rhythm, for the workers’ protests, for sabotage. The internal commissions were obliged to be true “collaborationist” organisms with the bosses and the Nazi-fascists. </p>
<p>We proposed to the workers to instead name in every factory a secret agitation committee of a unitary character. The task of every agitation committee was to see to the needs and demands of the workers, to organize agitation, to lead strikes, and to strengthen the struggle against the collaborationist industrialists and the Germans and fascists.</p>
<p>In the face of this just position, here and there we found opportunist attitudes which, under the mask of intransigent and extremist positions, claimed that the internal commissions should continue to exist because “’they represented a conquest of the working class.” We decisively rejected such positions; these were conquests which at a given moment had a progressive and revolutionary character, but susceptible in a different situation to being transformed into instruments of collaboration with the class enemy. </p>
<p>In their overwhelming majority the workers understood the directive of the PCI. After just a few days the internal commissions, despite the enticements and threats of the Germans and fascists, resigned. In the main factories there arose secret agitation committees, unitary organisms which at that moment took as their principal task the organization of strikes and agitation against the German invaders and the fascist traitors.</p>
<p>Our directive said that it was expected of Communists to promote the formation of these committees of clandestine agitation and to be their animators, to have them supported by all the workers so they be up to their tasks, which went from immediate, daily demands to the supreme political duty: the preparation of armed action for the driving out of the Germans, for the radical elimination of fascism. </p>
<p>The strikes moved quickly, growing day by day until they reached the general strike in Upper Italy of March 8, 1944 and the days of national insurrection of April 18-25, 1945 ...</p>
<p>We repeat: the strikes were not, except for a few exceptions, “spontaneous.” On the contrary, a great amount of energy was invested in organizing them. The fantasist picture put forth by those who didn’t know the period or participate in the struggle that it was the working class and the masses who from the base called for the continuous struggle at the front against a Communist leadership that intervened to brake, limit, and derail the struggle, does not correspond to reality. </p>
<p>It is precisely the contrary that is true, which is obvious and natural. For us it was relatively easy to elaborate political and organizational directives for the preparation of strikes, attacked by the armed partisan groups of the GAP, for the development of the great mass struggle and larger scale partisan battles. Much more arduous and difficult were the tasks to which these directives applied, translated into action. The workers, and in the first place our comrades, who in the cities and the factories had to apply our directives, knew full well that every strike, even when it was victorious, was followed by arrests, deportations, and executions; they knew they would have to pay, and pay dearly. </p>
<p>In this mass struggle, as in the conduct of the partisan guerrilla war, we certainly made mistakes; there were weaknesses, hesitations even among the most advanced parties in the democratic ranks who had always to confront opposing forces, even within the CLN, and with a complex, harsh and difficult reality. But we never found ourselves following the masses, we never committed the error of being a brake; we only took into account the difficulties the working masses would encounter in applying each of our directives for a bolder, broader and more advanced action. To be sure, we didn’t close our eyes to objections, to observations coming from the base; we weren’t indifferent to the cost, to losses. All of which led us to elaborate directives for actions that corresponded to their possibility of being realized, and not castles in the air. The impression shouldn’t be given that they were elaborated by incompetents or visionaries. The directives were always an incentive to do more, to move ever forward. </p>
<p class="skip"> </p>
<hr class="end">
<p class="footer">
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Pietro Secchia 1973
The Masses Join in the Struggle
Source: Il partito communista e la guerra di Liberazione. Feltrinelli, Milan, 1975;
Translated: by Mitchell Abidor;
CopyLeft: Creative Commons (Attribute & ShareAlike) marxists.org 2008.
On November 15 1943, in all of the metallurgical factories of Turin the first general strike under the German occupation occurred. There then followed others in Genoa, in Milan and many other locales during the winter and until the end of the war of independence, until the April insurrection.
The Italian Resistance, unlike that of other countries, was characterized by the combining of the working masses with the military action of the partisans. The one supported and was presupposed by the development of the other.
The class struggle was a key propelling element that gave impulse to the development of the fight for national liberation. In every era the national struggle has had a class character, and in every historical period there were determined men, determined social classes that represented the interests of the nation.
There were men and political groups, also within the CLN (Committee for National Liberation) who had doubts about the possibility of successfully conducting the fight for national liberation if, at the same time, the parties of the workers favored and gave impulse to the developing of the class struggle, to the organization of strikes and to agitation in factories and fields.
On the contrary, we Communists thought it was possible to give a just start and give a powerful impulse to the fight for national liberation only if at the same time there the defense of immediate, economic and social interests, as well as the more general ones of the working classes were brought to the forefront. We never contented ourselves with or underestimated the class struggle, (which in any case would have been impossible); this was expressed not only in the actions against the German occupier, but against the big Nazi-fascist collaborationist industrialists. This was the political line, the constant goal of the leadership of the PCI in upper Italy, profoundly persuaded as we were that the interests of the working class were not in contrast with those of the nation.
All of the political strikes organized during the Resistance had economic demands as their point of departure and foundation. These were directed against the Nazi-fascists and the big collaborationist industrialists. The struggle for bread, for wages, against exploitation, in defense of dignity became at the same time national struggles for the chasing out of the German invader and the defeat of fascism. The workers were stimulated to action by the very conditions of their existence, but in its turn the thrust of the class struggle every day impelled and carried along an ever larger number of men to participate in the fight for liberation.
Economic demands were placed to the forefront either to “cover” as far as possible the strikers from German-fascist reaction, or because they touched all strata of the workers, from those who were in the vanguard to those who were most backwards, less evolved and who weren’t interested in politics but wanted to defend their own right to live.
But it would be a mistake to say that since economic demands were at the base of the agitation and propaganda for the strikes, the workers were led to act mainly because they were moved by economic interests. Most workers knew full well the risks they were running striking and sabotaging production. German and fascist terrorism made their weight felt and exerted their influence, even if in different amounts, throughout the period of the war of liberation. Wages, piece work, working hours, a greater amount of food and fuel were important things, but not to the point to drive the most advanced part of the workers to jeopardize their lives, to risk deportation in order to obtain an increase in their salary of a few liras or a slightly larger ration of awful olive oil. If they did this it was because they were moved not only by economic necessity but by idealist, social and national motives, by profound sentiments of hatred of fascism, of love of liberty and the conquest of independence; in many cases it was the aspiration for socialism, economic, political and idealist motives intermingled and were melded into one sole thrust in the same way that many streams debouch into one great river.
The fact that the working class managed to exercise its leading function in the struggle for national liberation, taking as its starting point the defense of its interests and aspirations, demonstrates the way the national struggle was something profoundly real, inseparable from the very conditions of the workers’ existence. In defending its own positions and affirming itself, the working class, at the head of the laboring masses, affirmed the interests of the people and the entire nation. This gave the Italian Resistance not only a mighty verve, but a progressive imprint that characterized it and distinguished it in a more marked way than that of other countries.
In Italy the Resistance was antifascist, and more than elsewhere fought against those groups of big capital that gave birth to fascism, supported its policies, and led the country to wars of aggression and catastrophe. And more than elsewhere the Resistance had a class character: there was at one and the same time a national and a social struggle both because of its content and because the working class was the main leading force.
And it was from the working class, from the parties and men who represented it, that there came the most advanced watchwords, proposals, the most correct indications and solutions, those which best corresponded to the interests of the whole people and the nation. During the Resistance as well the laboring classes fought against the groups of finance capital, against big capital, fought to conquer liberty for all citizens, for the workers, the peasants, for the oppressed classes; fought to give birth to a new political and social regime that would realize profound structural reforms and a true, effective, new democracy.
They fought to extirpate the roots of fascism, to liquidate the most iniquitous privileges of capital and large landowners. They were the representatives of the working class and laborers who, within the CLN, proposed and supported those programmatic demands that expressed profound popular aspirations; aspirations and objectives that, to be sure, didn’t correspond to the will and the designs of all the movements that more or less directly participated in the Resistance. Aspirations for a profound, radical economic and social renewal for which the workers, the most advanced sectors of the peasantry, of laborers, of progressive intellectuals fought that , to be sure, didn’t constitute the whole of Italian reality. Other classes, other parties acted in this situation within and outside the Resistance, and fought with varying and contrasting objectives for liberation solely through the work of the Anglo-Americans, aiming at the restoration of capitalism, the return to a regime of conservative democracy. From which came the discord in unity, and the continuous struggle within the CLN to have determined solutions and carry the movement as far forward as possible.
Initially the CLN was indifferent to the strike front, failing to assume a position of active solidarity and support; such an attitude corresponded to a different conception of the action to be carried out in order to reinforce the Resistance and the war of liberation.
The CLNAI indeed voted an order for a day of solidarity with the powerful movement pf the workers of Turin of November to December 1943, but did nothing to give concrete assistance to the movement itself and its development.
The representatives of some of the parties within the CLN maintained that the strikes touched on and hurt certain interests, weakened national unity and alienated from the CLN certain capitalist forces which at that moment were disposed to assist the war of national liberation.
Decisively rejecting these arguments, and maintaining that instead of braking we had the obligation to encourage the organization of the strikes , up to the general political strike in all of German-occupied Italy, up to an insurrectional strike.
We openly criticized the position of certain members of the CLN: for us unity was not a holy arc, an altar before which the interests of the working class and laborers must be sacrificed.
The CLN, if it really wanted to be the leading center of the war for national liberation had to be able not only to be in solidarity with, but had to also organize, assist, support, and strengthen to the highest degree the fight of the working class; had to be able to extend this struggle and other strata of the population participate in it...It was necessary that the CLN become a true combat organization, a truly leading organization of the war of national liberation.
Without denying that here and there were strikes that were relatively spontaneous, the majority of the strikes and agitation were organized.
Initially the Germans allowed the internal commissions to continue to exist; in this way they attempted to keep in their hands the means to control and put a brake on the working masses. The directive was given to all Communists and workers to hinder the internal commissions, to refuse to participate in them and not to participate in their elections. It was obvious that the Germans and the fascists, recognizing the internal commissions, held the workers participating in them responsible for all that occurred in the factories, the production rhythm, for the workers’ protests, for sabotage. The internal commissions were obliged to be true “collaborationist” organisms with the bosses and the Nazi-fascists.
We proposed to the workers to instead name in every factory a secret agitation committee of a unitary character. The task of every agitation committee was to see to the needs and demands of the workers, to organize agitation, to lead strikes, and to strengthen the struggle against the collaborationist industrialists and the Germans and fascists.
In the face of this just position, here and there we found opportunist attitudes which, under the mask of intransigent and extremist positions, claimed that the internal commissions should continue to exist because “’they represented a conquest of the working class.” We decisively rejected such positions; these were conquests which at a given moment had a progressive and revolutionary character, but susceptible in a different situation to being transformed into instruments of collaboration with the class enemy.
In their overwhelming majority the workers understood the directive of the PCI. After just a few days the internal commissions, despite the enticements and threats of the Germans and fascists, resigned. In the main factories there arose secret agitation committees, unitary organisms which at that moment took as their principal task the organization of strikes and agitation against the German invaders and the fascist traitors.
Our directive said that it was expected of Communists to promote the formation of these committees of clandestine agitation and to be their animators, to have them supported by all the workers so they be up to their tasks, which went from immediate, daily demands to the supreme political duty: the preparation of armed action for the driving out of the Germans, for the radical elimination of fascism.
The strikes moved quickly, growing day by day until they reached the general strike in Upper Italy of March 8, 1944 and the days of national insurrection of April 18-25, 1945 ...
We repeat: the strikes were not, except for a few exceptions, “spontaneous.” On the contrary, a great amount of energy was invested in organizing them. The fantasist picture put forth by those who didn’t know the period or participate in the struggle that it was the working class and the masses who from the base called for the continuous struggle at the front against a Communist leadership that intervened to brake, limit, and derail the struggle, does not correspond to reality.
It is precisely the contrary that is true, which is obvious and natural. For us it was relatively easy to elaborate political and organizational directives for the preparation of strikes, attacked by the armed partisan groups of the GAP, for the development of the great mass struggle and larger scale partisan battles. Much more arduous and difficult were the tasks to which these directives applied, translated into action. The workers, and in the first place our comrades, who in the cities and the factories had to apply our directives, knew full well that every strike, even when it was victorious, was followed by arrests, deportations, and executions; they knew they would have to pay, and pay dearly.
In this mass struggle, as in the conduct of the partisan guerrilla war, we certainly made mistakes; there were weaknesses, hesitations even among the most advanced parties in the democratic ranks who had always to confront opposing forces, even within the CLN, and with a complex, harsh and difficult reality. But we never found ourselves following the masses, we never committed the error of being a brake; we only took into account the difficulties the working masses would encounter in applying each of our directives for a bolder, broader and more advanced action. To be sure, we didn’t close our eyes to objections, to observations coming from the base; we weren’t indifferent to the cost, to losses. All of which led us to elaborate directives for actions that corresponded to their possibility of being realized, and not castles in the air. The impression shouldn’t be given that they were elaborated by incompetents or visionaries. The directives were always an incentive to do more, to move ever forward.
Pietro Secchia Archive
|
./articles/Secchia-Pietro/https:..www.marxists.org.archive.secchia.1973.preparations | <body>
<p class="title">Pietro Secchia 1973</p>
<h3>The Politico-Military Preparations</h3>
<hr class="end">
<p class="information">
<span class="info">Source</span>: <em>Cronistoria del 25 aprile 1945</em>. Feltrinelli, Milan, 1973;<br>
<span class="info">Translated</span>: by <a href="../../../admin/volunteers/biographies/mabidor.htm">Mitchell Abidor</a>;<br>
<span class="info">CopyLeft</span>: <a href="../../../admin/legal/cc/by-sa.htm">Creative Commons</a> (Attribute & ShareAlike) marxists.org 2019.</p>
<hr class="end">
<p class="fst">June 4, 1944 the Allies entered Rome, the first European capital liberated. June 6 they landed successfully in Normandy, the largest amphibious military action that had ever taken place.</p>
<p class="indentb">“The history of war has never known its like in its proportions, the vastness of conception and its magisterial execution.” (Winston Churchill)</p>
<p>The Anglo-Americans had employed 11,000 fighter planes, 4,000 warships and thousands of smaller vessels, sent 20,000 parachutists behind enemy lines; during the 24 hours they landed 250,000 men and air-transported three divisions onto the French coast. The Second Front was finally a reality. </p>
<p>June 23, in accordance with the Teheran Agreements, the Red Army began its sweeping offensive, smashing the German front in Finland and breaking through the center at Vitebsk and Gomel. Thirty German divisions were cut off in the Baltic countries. In July the press of events became precipitous. While the Anglo-American armies cleaned out Cherbourg on June 26 and liberated Caen July 9 and headed rapidly towards Paris, the Soviet army shattered Von Model’s lines, liberated Minsk July 5, Vilna the 13th and Grodno the 17th, bursting through to the western the borders of East Prussia. </p>
<p>On July 20 the attempt on Hitler’s life laid bare to the world the end of another myth. The unity of the German leading groups and the tightness of the internal front were collapsing under the overwhelming weight of the defeat. A plot organized and led by a group of generals from headquarters, in attempting to physically liquidate the dictator, had sought to save what could still be saved. The hour so long awaited by the oppressed and martyred peoples of Europe, the hour of the concentric general offensive, from the east, the west, the north and the south, had arrived. A tremor of general revolt ran through the European resistance: the final battle had begun. </p>
<p>From the very beginning of the partisan war the objective of national insurrection was present in the thoughts and the actions of the Italian anti-Fascist parties; and in particular the insurrection was the object of serious and constant preparation on the part of the Communist Party, the Action Party, and the Socialist Party. But the development of events imposed the necessity to accelerate its organization. </p>
<p>All the anti-Fascist parties and movements were in agreement on the principle of the insurrection (this was the objective that the CLNAI as a whole put forth). But as the hour to set it in motion approached it was inevitable that the divergences among them would appear concerning what they considered indispensable to the success of the war of liberation but which that they nevertheless feared as a great danger; divergences that manifested themselves in the various commitments that the parties in the CLN made for preparing and organizing it. </p>
<p>The insurrection, though it had a largely national and patriotic character, was no longer a purely military operation, but was above all a powerful fight of the popular masses, and for this very reason was a revolutionary movement: the conservative classes could not but be frightened. </p>
<p>In the first months of the partisan struggle the Communists had already openly and clearly posed the problem of the national insurrection:</p>
<p>“The political strike, the national insurrection cannot simply be simple watchwords for purposes of agitation: they must already be concrete tasks of organization and preparation. We must continue, expand, and make general the armed struggle for national liberation that has already begun; the partisan struggle in the first place but also the mass resistance to Fascist and Nazi orders as well as the protest movement of the masses against their oppressors and exploiters. Through this struggle the framework and the organisms of the insurrection will be created, training the masses for the final attack and the victorious insurrection.” (L'Unit�, Dec 24, 1943, Northern edition)</p>
<p>This would be matured through the development of multifaceted partisan actions, workers struggles in the factories, and peasant movements in the countryside. With these concepts as our starting point, from the very first months of the partisan war we had precise directions for the creation of Agitation Committees in the factories and the objectives that the general political strike could pose.</p>
<p class="indentb">“In the insurrectional strike we must occupy the factories, not to barricade ourselves inside, but to make fortresses of them, points of support for armed insurrectional actions to be conducted outside against the enemy’s strongholds and his vital points.” (L'Unit�, Dec 24, 1943, Northern edition)</p>
<p>Orders were given to the railway workers that on a given day it would be their duty to take over the most important railway centers by force; to stop enemy transport; and to put themselves at the disposition of the insurrectionary centers, in the same way that it would be the duty of the postal and telegraph workers to occupy the telegraph and telephone centers and the radio stations.</p>
<p>It was a question of tasks that were serious and indispensable for the preparation of a victorious national insurrection which could not be improvised at the last minute; it was necessary to make prior arrangements for their realization.</p>
<p>Insisting on these arguments from the first months of the partisan struggle was politically and militarily correct, but didn’t fail to also provoke some erroneous interpretations which had to be clarified in order to avoid grave consequences for the victorious development of the struggle. </p>
<p>Especially in the course of the general strike of March 1944 there came to light an opinion quite widespread among the working masses and the population of the industrial centers, that is, that the strike had an insurrectional character and that the moment had come to finish off the Germans and the Fascists. In the popular quarters in particular the rumors were rampant that thousands of partisans had come down from the mountains and had occupied the city. </p>
<p>The objective situation itself had created certain illusions and led to the circulating of the most sensational rumors (the workers understood full well that the essential problem wasn’t that of the improving of economic conditions, but rather that of driving out the Germans.. They understood that there could be no real solution to the problem of living conditions if we didn’t have done with the Nazi-Fascists), but in part there were also some defects in our press and the erroneous interpretation of some watchwords, for example the one that said , “Prepare for the national insurrection.”</p>
<p>Having insisted on this in articles and directives on this theme, while at the same time preparing the general protest and political strike of March 1944, contributed to creating a certain confusion. “Prepare for the national insurrection” was here and there interpreted as an immediate watchword.</p>
<p>After the March general strike they continued to hammer away at the need to “prepare the national insurrection in every detail” but at the same time stressed that they weren’t joking about insurrection (we wanted a victorious insurrection and not an adventure), that this could only be unleashed when the force of the Italian people would be ready to strike and bring down the enemy: “therefore the moment and the hour of the national insurrection will be chosen by the Italian people and not by the enemy.”</p>
<p>The beginning of the battle for Europe announced that it was time to prepare the insurrection, not only on the political but also on the military plane. June 28, 1944 the General Command of the <em>Corpo Volontari della liberta</em> sent directive no. 5 to all the regional commands, having as its objective “the examination of the objectives” of the insurrection in the cities, the situation of effectives, and the elaboration of plans for insurrection and the systematic acts of sabotage. </p>
<p>Such directives consisted in a series of instructions concerning the tasks that every partisan commando had the duty to propose in order to accurately know the topography of the city and the surrounding territory (factories, barracks, rail lines, seats of the enemy command, etc), the strength of the enemy and that of the patriots, their effective efficiency, and for the intensification of attacks and acts of sabotage against the enemy. </p>
<p>Every peripheral command was assigned the task of elaborating a concrete insurrectional plan within the scope of its area of competency, which was to reflect the immediate objectives and actions for the systematic development of military action, up to and including the driving out of the enemy and the occupation of the zone by the patriotic formations. </p>
<p>For their part the leaders of the Action Party insisted that; “It is very true, and will become ever more obvious, that our people, along with the other oppressed peoples, are leading an untiring insurrectionary struggle against those who have profited from this war, against those who enslaved them, against Nazism and Fascism. We are on the road to the anti-Hitlerite national insurrection of the European continent. And this is the problem: don’t allow the struggle to be derailed or falsified. Don’t allow the fruits of our victorious rescue to escape us.” (L'Italia Libera, no. 9,July 10, 1944)</p>
<p>Even after the liberation of Rome and the opening of the Second Front there were those who thought, the Liberals and the Christian Democrats among them, that there was nothing else to do but to carry on with our every day routine. Their representatives within the CVL approved the directives, but in the underground press of their parties “insurrection” was never spoken of; the word was strictly avoided, and this wasn’t accidental. </p>
<p>In issue no. 5 of <em>Risorgimento Liberale</em> of May 1944, on the eve of the liberation of Rome, while the partisan struggle raged in all the valleys, there was not one single word inciting to armed struggle, and in an article entitled “Look ahead” they limited themselves to saying, “ Today this alone must we urge our readers: Don’t be discouraged. Don’t believe the pessimists and the spreaders of doubt. Continue to put up with things and you will see that the future will be peaceful. We will again take up our trade.”</p>
<p><em>Democrazia Cristiana</em>, in issue no 2 as well as in the following issues, published in bold letters an article with the title: “What should the Christian Democrats do? In this hour of waiting every good Christian Democrat, convinced of the rightness of the cause, should not remain inert, but should carry out with prudent courage an active propaganda for our ideas, should make known our program, should distribute our leaflets and <em>Democrazia.</em>”</p>
<p>Some called to continue to put up with things and to already look forward to the “taking up of trade,” others spoke of “this hour of waiting.” It was certainly not with the spirit of prudent courage that the insurrection could be prepared. The Communist party responded to all of them with open criticism, inviting them to greater combativeness and to put in practice the decisions that had been taken in common in the CLN.</p>
<p class="indentb">“It isn’t enough to decide, to accept, to approve. It is necessary to execute; it is necessary to honor one’s own signature. It’s not enough to pronounce against a wait and see attitude and to allow the partisan formations that you say you direct and control to not show any sign of life through concrete actions against the German and the Fascists. We are above all speaking to our Liberal friends, our Christian Democratic friends. It’s not enough to say that one is against every form of pacification, of non-belligerency with the enemy and then allow that negotiations in this sense be begun with the Germans and the Fascists. It’s not enough to say that you are for the general strike, to sign to this effect – as the Socialist Party has done – a common appeal with our party and then allow organizations to refuse to march, as occurred in Florence and Padua. And it’s even worse to allow the Turin organization to issue during the strike, on its own initiative, a tract that ordered the return to work without party measures being taken” (La Nostra Lotta, March 5-6, 1944)</p>
<p>These parties, though, were very busy preparing names and lists of the men who, when the liberation occurred, would be appointed to head prefectures, communes, and public administration. Instead of working to prepare the insurrection, they were intent on preparing the plan for afterwards, having in view putting the old structures of the state back in place; not, to be sure, democratic, but pre-Fascist. It never occurred to the authors of these plans that the organized and triumphant national insurrection would create on its own its own organs of power and order, and that these organs had to be the Committees of National Liberation. </p>
<p class="indentb">“The new order that will issue from the insurrection,” we wrote, “if it wants to be vital and not betray popular aspirations, can only be democratic in the widest meaning of the term, can only base itself on the same organs that have today already marshaled the national masses and lead them in the struggle, and which will tomorrow lead them to the insurrection and to victory. These organs are the Committees of National Liberation and the formations that belong to it; factory agitation committees, peasant committees, village committees, partisan formations. Preparing plans for after the insurrection, based on prefects, police supervisors, and mayors, along with <em>carabinieri</em> and policemen formed by twenty years of Fascism, means preparing the stifling of the insurrection itself in the more or less short term. Behind these plans are hiding the same anti-popular and reactionary forces who we have already found behind the attempts to stifle the partisan struggle and the protest struggles of the workers.” (La Nostra Lotta, March 5-6, 1944)</p>
<p>With this as the starting point, obviously the varying viewpoints of the forces united within the CLN against the common enemy were divided by class interests that led them to act in different ways.</p>
<p>Organizing the insurrection and the post-insurrectionary period by the truly democratic forces had the very precise meaning of reinforcing and strengthening all the organs that led the struggle against the Germans and the Fascists, transforming them into ever larger mass organisms, and converted the Committees of National Liberation the future organs of government.</p>
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Pietro Secchia 1973
The Politico-Military Preparations
Source: Cronistoria del 25 aprile 1945. Feltrinelli, Milan, 1973;
Translated: by Mitchell Abidor;
CopyLeft: Creative Commons (Attribute & ShareAlike) marxists.org 2019.
June 4, 1944 the Allies entered Rome, the first European capital liberated. June 6 they landed successfully in Normandy, the largest amphibious military action that had ever taken place.
“The history of war has never known its like in its proportions, the vastness of conception and its magisterial execution.” (Winston Churchill)
The Anglo-Americans had employed 11,000 fighter planes, 4,000 warships and thousands of smaller vessels, sent 20,000 parachutists behind enemy lines; during the 24 hours they landed 250,000 men and air-transported three divisions onto the French coast. The Second Front was finally a reality.
June 23, in accordance with the Teheran Agreements, the Red Army began its sweeping offensive, smashing the German front in Finland and breaking through the center at Vitebsk and Gomel. Thirty German divisions were cut off in the Baltic countries. In July the press of events became precipitous. While the Anglo-American armies cleaned out Cherbourg on June 26 and liberated Caen July 9 and headed rapidly towards Paris, the Soviet army shattered Von Model’s lines, liberated Minsk July 5, Vilna the 13th and Grodno the 17th, bursting through to the western the borders of East Prussia.
On July 20 the attempt on Hitler’s life laid bare to the world the end of another myth. The unity of the German leading groups and the tightness of the internal front were collapsing under the overwhelming weight of the defeat. A plot organized and led by a group of generals from headquarters, in attempting to physically liquidate the dictator, had sought to save what could still be saved. The hour so long awaited by the oppressed and martyred peoples of Europe, the hour of the concentric general offensive, from the east, the west, the north and the south, had arrived. A tremor of general revolt ran through the European resistance: the final battle had begun.
From the very beginning of the partisan war the objective of national insurrection was present in the thoughts and the actions of the Italian anti-Fascist parties; and in particular the insurrection was the object of serious and constant preparation on the part of the Communist Party, the Action Party, and the Socialist Party. But the development of events imposed the necessity to accelerate its organization.
All the anti-Fascist parties and movements were in agreement on the principle of the insurrection (this was the objective that the CLNAI as a whole put forth). But as the hour to set it in motion approached it was inevitable that the divergences among them would appear concerning what they considered indispensable to the success of the war of liberation but which that they nevertheless feared as a great danger; divergences that manifested themselves in the various commitments that the parties in the CLN made for preparing and organizing it.
The insurrection, though it had a largely national and patriotic character, was no longer a purely military operation, but was above all a powerful fight of the popular masses, and for this very reason was a revolutionary movement: the conservative classes could not but be frightened.
In the first months of the partisan struggle the Communists had already openly and clearly posed the problem of the national insurrection:
“The political strike, the national insurrection cannot simply be simple watchwords for purposes of agitation: they must already be concrete tasks of organization and preparation. We must continue, expand, and make general the armed struggle for national liberation that has already begun; the partisan struggle in the first place but also the mass resistance to Fascist and Nazi orders as well as the protest movement of the masses against their oppressors and exploiters. Through this struggle the framework and the organisms of the insurrection will be created, training the masses for the final attack and the victorious insurrection.” (L'Unit�, Dec 24, 1943, Northern edition)
This would be matured through the development of multifaceted partisan actions, workers struggles in the factories, and peasant movements in the countryside. With these concepts as our starting point, from the very first months of the partisan war we had precise directions for the creation of Agitation Committees in the factories and the objectives that the general political strike could pose.
“In the insurrectional strike we must occupy the factories, not to barricade ourselves inside, but to make fortresses of them, points of support for armed insurrectional actions to be conducted outside against the enemy’s strongholds and his vital points.” (L'Unit�, Dec 24, 1943, Northern edition)
Orders were given to the railway workers that on a given day it would be their duty to take over the most important railway centers by force; to stop enemy transport; and to put themselves at the disposition of the insurrectionary centers, in the same way that it would be the duty of the postal and telegraph workers to occupy the telegraph and telephone centers and the radio stations.
It was a question of tasks that were serious and indispensable for the preparation of a victorious national insurrection which could not be improvised at the last minute; it was necessary to make prior arrangements for their realization.
Insisting on these arguments from the first months of the partisan struggle was politically and militarily correct, but didn’t fail to also provoke some erroneous interpretations which had to be clarified in order to avoid grave consequences for the victorious development of the struggle.
Especially in the course of the general strike of March 1944 there came to light an opinion quite widespread among the working masses and the population of the industrial centers, that is, that the strike had an insurrectional character and that the moment had come to finish off the Germans and the Fascists. In the popular quarters in particular the rumors were rampant that thousands of partisans had come down from the mountains and had occupied the city.
The objective situation itself had created certain illusions and led to the circulating of the most sensational rumors (the workers understood full well that the essential problem wasn’t that of the improving of economic conditions, but rather that of driving out the Germans.. They understood that there could be no real solution to the problem of living conditions if we didn’t have done with the Nazi-Fascists), but in part there were also some defects in our press and the erroneous interpretation of some watchwords, for example the one that said , “Prepare for the national insurrection.”
Having insisted on this in articles and directives on this theme, while at the same time preparing the general protest and political strike of March 1944, contributed to creating a certain confusion. “Prepare for the national insurrection” was here and there interpreted as an immediate watchword.
After the March general strike they continued to hammer away at the need to “prepare the national insurrection in every detail” but at the same time stressed that they weren’t joking about insurrection (we wanted a victorious insurrection and not an adventure), that this could only be unleashed when the force of the Italian people would be ready to strike and bring down the enemy: “therefore the moment and the hour of the national insurrection will be chosen by the Italian people and not by the enemy.”
The beginning of the battle for Europe announced that it was time to prepare the insurrection, not only on the political but also on the military plane. June 28, 1944 the General Command of the Corpo Volontari della liberta sent directive no. 5 to all the regional commands, having as its objective “the examination of the objectives” of the insurrection in the cities, the situation of effectives, and the elaboration of plans for insurrection and the systematic acts of sabotage.
Such directives consisted in a series of instructions concerning the tasks that every partisan commando had the duty to propose in order to accurately know the topography of the city and the surrounding territory (factories, barracks, rail lines, seats of the enemy command, etc), the strength of the enemy and that of the patriots, their effective efficiency, and for the intensification of attacks and acts of sabotage against the enemy.
Every peripheral command was assigned the task of elaborating a concrete insurrectional plan within the scope of its area of competency, which was to reflect the immediate objectives and actions for the systematic development of military action, up to and including the driving out of the enemy and the occupation of the zone by the patriotic formations.
For their part the leaders of the Action Party insisted that; “It is very true, and will become ever more obvious, that our people, along with the other oppressed peoples, are leading an untiring insurrectionary struggle against those who have profited from this war, against those who enslaved them, against Nazism and Fascism. We are on the road to the anti-Hitlerite national insurrection of the European continent. And this is the problem: don’t allow the struggle to be derailed or falsified. Don’t allow the fruits of our victorious rescue to escape us.” (L'Italia Libera, no. 9,July 10, 1944)
Even after the liberation of Rome and the opening of the Second Front there were those who thought, the Liberals and the Christian Democrats among them, that there was nothing else to do but to carry on with our every day routine. Their representatives within the CVL approved the directives, but in the underground press of their parties “insurrection” was never spoken of; the word was strictly avoided, and this wasn’t accidental.
In issue no. 5 of Risorgimento Liberale of May 1944, on the eve of the liberation of Rome, while the partisan struggle raged in all the valleys, there was not one single word inciting to armed struggle, and in an article entitled “Look ahead” they limited themselves to saying, “ Today this alone must we urge our readers: Don’t be discouraged. Don’t believe the pessimists and the spreaders of doubt. Continue to put up with things and you will see that the future will be peaceful. We will again take up our trade.”
Democrazia Cristiana, in issue no 2 as well as in the following issues, published in bold letters an article with the title: “What should the Christian Democrats do? In this hour of waiting every good Christian Democrat, convinced of the rightness of the cause, should not remain inert, but should carry out with prudent courage an active propaganda for our ideas, should make known our program, should distribute our leaflets and Democrazia.”
Some called to continue to put up with things and to already look forward to the “taking up of trade,” others spoke of “this hour of waiting.” It was certainly not with the spirit of prudent courage that the insurrection could be prepared. The Communist party responded to all of them with open criticism, inviting them to greater combativeness and to put in practice the decisions that had been taken in common in the CLN.
“It isn’t enough to decide, to accept, to approve. It is necessary to execute; it is necessary to honor one’s own signature. It’s not enough to pronounce against a wait and see attitude and to allow the partisan formations that you say you direct and control to not show any sign of life through concrete actions against the German and the Fascists. We are above all speaking to our Liberal friends, our Christian Democratic friends. It’s not enough to say that one is against every form of pacification, of non-belligerency with the enemy and then allow that negotiations in this sense be begun with the Germans and the Fascists. It’s not enough to say that you are for the general strike, to sign to this effect – as the Socialist Party has done – a common appeal with our party and then allow organizations to refuse to march, as occurred in Florence and Padua. And it’s even worse to allow the Turin organization to issue during the strike, on its own initiative, a tract that ordered the return to work without party measures being taken” (La Nostra Lotta, March 5-6, 1944)
These parties, though, were very busy preparing names and lists of the men who, when the liberation occurred, would be appointed to head prefectures, communes, and public administration. Instead of working to prepare the insurrection, they were intent on preparing the plan for afterwards, having in view putting the old structures of the state back in place; not, to be sure, democratic, but pre-Fascist. It never occurred to the authors of these plans that the organized and triumphant national insurrection would create on its own its own organs of power and order, and that these organs had to be the Committees of National Liberation.
“The new order that will issue from the insurrection,” we wrote, “if it wants to be vital and not betray popular aspirations, can only be democratic in the widest meaning of the term, can only base itself on the same organs that have today already marshaled the national masses and lead them in the struggle, and which will tomorrow lead them to the insurrection and to victory. These organs are the Committees of National Liberation and the formations that belong to it; factory agitation committees, peasant committees, village committees, partisan formations. Preparing plans for after the insurrection, based on prefects, police supervisors, and mayors, along with carabinieri and policemen formed by twenty years of Fascism, means preparing the stifling of the insurrection itself in the more or less short term. Behind these plans are hiding the same anti-popular and reactionary forces who we have already found behind the attempts to stifle the partisan struggle and the protest struggles of the workers.” (La Nostra Lotta, March 5-6, 1944)
With this as the starting point, obviously the varying viewpoints of the forces united within the CLN against the common enemy were divided by class interests that led them to act in different ways.
Organizing the insurrection and the post-insurrectionary period by the truly democratic forces had the very precise meaning of reinforcing and strengthening all the organs that led the struggle against the Germans and the Fascists, transforming them into ever larger mass organisms, and converted the Committees of National Liberation the future organs of government.
Pietro Secchia Archive
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<p class="title">Pietro Secchia 1958</p>
<h3>Women Partisans</h3>
<hr class="end">
<p class="information"><span class="info">Source</span>: <em>Il Monterosa � sceso a Milano</em>. G. Einaudi Editore, Turin, 1958;<br>
<span class="info">Translated</span>: by <a href="../../../admin/volunteers/biographies/mabidor.htm">Mitchell Abidor</a>;<br>
<span class="info">CopyLeft</span>: <a href="../../../admin/legal/cc/by-sa.htm">Creative Commons</a> (Attribute & ShareAlike) marxists.org 2009.</p>
<hr class="end">
<p>As the war of liberation draws to its victorious conclusion, our chronicle would be incomplete if we were to remain silent about the functions carried out by a brigade that didn’t fight, but which nevertheless participated in all the combats, that was ever-present, worked everywhere without firing noisy shots, but whose action was even so as effective and necessary as that of the more perfected arms: we’re talking about the nursing, courier, and intelligence women partisans. </p>
<p>The Resistance, however great might have been the courage of the men, would not have been possible without women: their functions were less flashy, but no less essential. There is no comparison between the participation of women in the fight for the Risorgimento and that for national liberation. It was then a matter, except for the insurrectional days in the cities and the popular revolts, of a few chosen ones, of shining examples, but not of mass phenomena. </p>
<p>“A fundamental characteristic of the women in the Resistance, which was one of the most vital elements of the war of liberation, is precisely its collective, almost anonymous character; its having as protagonist not some exceptional beings, but the wide masses, belonging to the most varied strata of the population; its being born, not from the will of a few, but from the spontaneous initiative of the many.” <sup class="enote"><a href="#n1">[1]</a></sup></p>
<p>The first partisan couriers and spies were women. Initially they brought, along with assistance in the form of food and clothing, news from home and information on enemy movements. Quite quickly this spontaneous work became organized, and every detachment created its own couriers, which specialized in shuttling between the city centers and the command of the partisan units. </p>
<p>The couriers constituted an important gear in the complex machinery of the partisan army. Without the secure liaison carried out by the couriers, directives would have remained a dead letter; assistance, orders, and information would not have arrived in the various zones. Their work was delicate, difficult, and almost always dangerous. Even when they didn’t cross the lines during combat under enemy fire, they had to pass through the steep slopes of mountains, in pouring rain with dangerous, cumbersome material, covering hundreds of kilometers on bicycle or truck, often on foot, in the rain and the fury of the wind. Crushed in trains, squeezed against the disconnected axis of a cattle car, the couriers passed long hours, often forced to pass a night in a station or in an open field, facing the dangers of bombardments or a German ambush.</p>
<p>They often had to precede the fascists who were climbing behind them in order to warn our people in time, and many times they were involved in the subsequent roundup. After the combats, the retreating partisans were not always able to take those seriously wounded with them. If there were too wounded to hide, the couriers remained to watch them, to give them the necessary treatment, to seek medical help, to organize their recovery in a clinic. It often happened that after the battle the courier remained at her post in the occupied country in order to learn the enemy movements and to get the information to the partisan command. During the transfer marches they were in the vanguard: when the partisan unit arrived near a town the courier was the first to enter in order to find out if there were enemy forces and how many there were, and if it was possible for the partisan column to continue on. </p>
<p>During the overnight and rest halts the couriers went about the town in search of food, of medicines, and of whatever else was needed. Indefatigable, constantly in motion day and night in order to establish a liaison, to seek information, to deliver an order, to transmit a directive; often in the tiny envelope that the courier hid in her breast was the salvation, the life or the death of hundreds of men.</p>
<p>Many couriers fell in combat or in the course of their dangerous missions. Among others there was: Giuseppina Canna at Premosello August 29, 1944, Erminia Casinghino at Varallo April 24, 1945, Ermelinda Cerruti at Feriolo di Baveno November 19, 1944, Alda Genolle at Cavaglio d’Agnona April 4, 1945, Rosanna Re at Orio Mosso October 4, 1944, Ceonice Tommasetti at Fondotoce June 20, 1944, Fiorina Gottico at Varalla Pombia april 26, 1945, Veronica Ottone at Gravellona Toce November 1, 1944, Maria Mariotti May 16, 1944 at Novara, Anna Rossetti February 22, 1945, Maria Luisa Minardi, Maria Ubezio. </p>
<p>The Valsesian and Ossolan formations had as their main collaborators and couriers: Teresa Mondini, attach� in the liaison service, the sisters Dina, Lina and Tersilia Mambrini of Borgosesia, the sisters Maria and Wanda Manfredi of Valduggia, the sisters Wanda and Emiluccia Cann of Borgosesia, the sisters Vitto, Jucci, and Rosetta Caula of Varallo Sesia (nurses as well as fighters); the sisters Caterina, Angela, and Maria Zanotti of Valduggia, Angelo Zenotti’s mamma, and that of Giacomino Barbaglia; Stellina Vecchio of the general command of the Garibaldi Brigades; the schoolteacher of Rimasco Biancaneve di Boleto, Mariuccia of Varallo Pombia, Bianca of Montrigione, Fina Rizzio and her daughter Maria of Praveri, Maria Rioloio of Lebbia, Mariuccia of Cellio and Liliana Fantini of Borgomasero, Maria Teresa of Maggiora, the daughters Rasario and mamma Comoli of Raschetto, Lina of Varallo Sessio and many others. <sup class="enote"><a href="#n2">[2]</a></sup> </p>
<p>Particularly precious were the labors of Mariola and Marcella Balconi, indefatigable and courageous sanitary inspectors of the general command of the Garibaldi Brigades. </p>
<p>The Garibaldian Command in the Belliese was essentially served by the labor of Lilliana Rosetti for liaison between the zone and regional commands; of Bianca Diodati, Vinca berti, Anna Cinanni and Alba Ferrari for liaison with the general command of the Garibaldi Brigades which had its seat in Milan; of Nella Zaninetti, Aurora Rossetti, Giovanna Vanucci, Terseina Comini, Rita Gallo, Nara Bertotti, Luisa Giacchini, Ughetta Bozzalla, Mercedes Fall, Bruna Giva, Marai lastella, Eva Anselmetti, Bettina Zanotti, Ortensia Nicol�, Maddalena Curtis, Amata Casale, Silvia Berbero, Scintilla Robbioli, Marai Teresa Curnic, Alba Bischetto, for the various units of the Fifth and Twelfth Divisions, Lina Antonietti ensured the liaison with the National Liberation Committee and the civilian authorities. We must also remember Catarina Negro, the old “aunt” of the partisans, who despite her advanced age spared nothing in order to in every way assist the patriots who found in her welcoming home rest, liaison, and deliveries. Alba Spina and Ergenite Gili, among the mist active and daring, first worked with the Biellesa partisan formations, and later passed over to the regional military command. </p>
<p>It’s impossible to cite and recall all of their names. We needed the assistance of hundreds and hundreds of them, their initiative, their care and their courage. Medals were given to partisans and fighters, and to intriguers as well; but little or nothing was given to the women of the Resistance. But all those who know them will forever carry in their hearts the memory of what they were; to the couriers, to the nurses, to all the female partisans goes the imperishable affection of the Garibaldini. </p>
<hr class="end">
<p class="information"><a name="n1"><span class="info">1.</span></a> A. Marchesini Gobetti, Donne piemontesi nella lotta di liberazione, Torino.</p>
<p class="information"><a name="n2"><span class="info">2.</span></a> I ask for pardon from the many brave and deserving ones whose names I’ve forgotten.</p>
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Pietro Secchia 1958
Women Partisans
Source: Il Monterosa � sceso a Milano. G. Einaudi Editore, Turin, 1958;
Translated: by Mitchell Abidor;
CopyLeft: Creative Commons (Attribute & ShareAlike) marxists.org 2009.
As the war of liberation draws to its victorious conclusion, our chronicle would be incomplete if we were to remain silent about the functions carried out by a brigade that didn’t fight, but which nevertheless participated in all the combats, that was ever-present, worked everywhere without firing noisy shots, but whose action was even so as effective and necessary as that of the more perfected arms: we’re talking about the nursing, courier, and intelligence women partisans.
The Resistance, however great might have been the courage of the men, would not have been possible without women: their functions were less flashy, but no less essential. There is no comparison between the participation of women in the fight for the Risorgimento and that for national liberation. It was then a matter, except for the insurrectional days in the cities and the popular revolts, of a few chosen ones, of shining examples, but not of mass phenomena.
“A fundamental characteristic of the women in the Resistance, which was one of the most vital elements of the war of liberation, is precisely its collective, almost anonymous character; its having as protagonist not some exceptional beings, but the wide masses, belonging to the most varied strata of the population; its being born, not from the will of a few, but from the spontaneous initiative of the many.” [1]
The first partisan couriers and spies were women. Initially they brought, along with assistance in the form of food and clothing, news from home and information on enemy movements. Quite quickly this spontaneous work became organized, and every detachment created its own couriers, which specialized in shuttling between the city centers and the command of the partisan units.
The couriers constituted an important gear in the complex machinery of the partisan army. Without the secure liaison carried out by the couriers, directives would have remained a dead letter; assistance, orders, and information would not have arrived in the various zones. Their work was delicate, difficult, and almost always dangerous. Even when they didn’t cross the lines during combat under enemy fire, they had to pass through the steep slopes of mountains, in pouring rain with dangerous, cumbersome material, covering hundreds of kilometers on bicycle or truck, often on foot, in the rain and the fury of the wind. Crushed in trains, squeezed against the disconnected axis of a cattle car, the couriers passed long hours, often forced to pass a night in a station or in an open field, facing the dangers of bombardments or a German ambush.
They often had to precede the fascists who were climbing behind them in order to warn our people in time, and many times they were involved in the subsequent roundup. After the combats, the retreating partisans were not always able to take those seriously wounded with them. If there were too wounded to hide, the couriers remained to watch them, to give them the necessary treatment, to seek medical help, to organize their recovery in a clinic. It often happened that after the battle the courier remained at her post in the occupied country in order to learn the enemy movements and to get the information to the partisan command. During the transfer marches they were in the vanguard: when the partisan unit arrived near a town the courier was the first to enter in order to find out if there were enemy forces and how many there were, and if it was possible for the partisan column to continue on.
During the overnight and rest halts the couriers went about the town in search of food, of medicines, and of whatever else was needed. Indefatigable, constantly in motion day and night in order to establish a liaison, to seek information, to deliver an order, to transmit a directive; often in the tiny envelope that the courier hid in her breast was the salvation, the life or the death of hundreds of men.
Many couriers fell in combat or in the course of their dangerous missions. Among others there was: Giuseppina Canna at Premosello August 29, 1944, Erminia Casinghino at Varallo April 24, 1945, Ermelinda Cerruti at Feriolo di Baveno November 19, 1944, Alda Genolle at Cavaglio d’Agnona April 4, 1945, Rosanna Re at Orio Mosso October 4, 1944, Ceonice Tommasetti at Fondotoce June 20, 1944, Fiorina Gottico at Varalla Pombia april 26, 1945, Veronica Ottone at Gravellona Toce November 1, 1944, Maria Mariotti May 16, 1944 at Novara, Anna Rossetti February 22, 1945, Maria Luisa Minardi, Maria Ubezio.
The Valsesian and Ossolan formations had as their main collaborators and couriers: Teresa Mondini, attach� in the liaison service, the sisters Dina, Lina and Tersilia Mambrini of Borgosesia, the sisters Maria and Wanda Manfredi of Valduggia, the sisters Wanda and Emiluccia Cann of Borgosesia, the sisters Vitto, Jucci, and Rosetta Caula of Varallo Sesia (nurses as well as fighters); the sisters Caterina, Angela, and Maria Zanotti of Valduggia, Angelo Zenotti’s mamma, and that of Giacomino Barbaglia; Stellina Vecchio of the general command of the Garibaldi Brigades; the schoolteacher of Rimasco Biancaneve di Boleto, Mariuccia of Varallo Pombia, Bianca of Montrigione, Fina Rizzio and her daughter Maria of Praveri, Maria Rioloio of Lebbia, Mariuccia of Cellio and Liliana Fantini of Borgomasero, Maria Teresa of Maggiora, the daughters Rasario and mamma Comoli of Raschetto, Lina of Varallo Sessio and many others. [2]
Particularly precious were the labors of Mariola and Marcella Balconi, indefatigable and courageous sanitary inspectors of the general command of the Garibaldi Brigades.
The Garibaldian Command in the Belliese was essentially served by the labor of Lilliana Rosetti for liaison between the zone and regional commands; of Bianca Diodati, Vinca berti, Anna Cinanni and Alba Ferrari for liaison with the general command of the Garibaldi Brigades which had its seat in Milan; of Nella Zaninetti, Aurora Rossetti, Giovanna Vanucci, Terseina Comini, Rita Gallo, Nara Bertotti, Luisa Giacchini, Ughetta Bozzalla, Mercedes Fall, Bruna Giva, Marai lastella, Eva Anselmetti, Bettina Zanotti, Ortensia Nicol�, Maddalena Curtis, Amata Casale, Silvia Berbero, Scintilla Robbioli, Marai Teresa Curnic, Alba Bischetto, for the various units of the Fifth and Twelfth Divisions, Lina Antonietti ensured the liaison with the National Liberation Committee and the civilian authorities. We must also remember Catarina Negro, the old “aunt” of the partisans, who despite her advanced age spared nothing in order to in every way assist the patriots who found in her welcoming home rest, liaison, and deliveries. Alba Spina and Ergenite Gili, among the mist active and daring, first worked with the Biellesa partisan formations, and later passed over to the regional military command.
It’s impossible to cite and recall all of their names. We needed the assistance of hundreds and hundreds of them, their initiative, their care and their courage. Medals were given to partisans and fighters, and to intriguers as well; but little or nothing was given to the women of the Resistance. But all those who know them will forever carry in their hearts the memory of what they were; to the couriers, to the nurses, to all the female partisans goes the imperishable affection of the Garibaldini.
1. A. Marchesini Gobetti, Donne piemontesi nella lotta di liberazione, Torino.
2. I ask for pardon from the many brave and deserving ones whose names I’ve forgotten.
Pietro Secchia Archive
|
./articles/Secchia-Pietro/https:..www.marxists.org.archive.secchia.1948.vatican-bulwark | <body>
<p class="title">Pietro Secchia 1948</p>
<h3>The Vatican—Bulwark of Imperialism</h3>
<hr>
<p class="information">
<span class="info">Written:</span> By Pietro Secchia, 1948;<br>
<span class="info">Source:</span> <i>For a Lasting Peace, for a People's Democracy!</i> Vol. 2, no. 4; February 15, 1948;<br>
<span class="info">Transcribed:</span> David Adams, March 2022.</p>
<hr>
<p>In all capitalist countries the Vatican and the upper ranks of the
clergy invariably sided with the conservative and reactionary
ruling classes, with the big industrialists, landlords and
bankers.</p>
<p>The church leaders were always closely associated with
fascism in the countries where the terrorist dictatorship of
fascism held sway and fully supported and abetted its policy.
The Vatican supported Mussolini in Italy, Hitler in Germany,
Dolfuss and Schuschnigg in Austria; it supported the fascist
aggression against the Spanish people and to this day actively
supports Franco’s terrorist regime.</p>
<p>From the very birth of the fascist movement in Italy and
throughout the twenty years of its domination the Vatican
preached obedience to fascism. The Pope hailed Mussolini as
“the man, sent by Providence,” gave his blessing to the
adventures and criminal aggression of fascism against other
nations.</p>
<p>It was only when the military defeat of fascism became an
obvious and inevitable fact that the Vatican made shift to
change its policy, sought to forget its recent past, started
looking around for new points of support and depicted itself as
a champion of democracy.</p>
<p>The double-dealing policy pursued by the top circles of finance
capital during the Nazi occupation found apt disciples among
the princes of the Church.</p>
<p>Until the very last minute the Vatican tried to save fascism
from defeat, and upon meeting with failure it did everything
possible to secure a compromise peace.</p>
<p>After the overthrow of fascism in Italy the Vatican set in
motion all levers, material and ecclesiastical, in an endeavour
to save the monarchy.</p>
<p>Today the entire activities of the Vatican are directed against
the popular democratic forces, towards bolstering up the power
of the oligarchy of Italy’s industrialists and landlords, towards
the realisation of the predatory plans of American imperialism.
The Vatican is bitterly hostile to the countries of the new
democracy and lends every support to any campaign and
provocation against the USSR.</p>
<p>What is the explanation for the Vatican’s traditional anti-
democratic and reactionary policy? It would be wrong to
ascribe it to purely ideological, religious and clerical reasons.
The present-day Vatican is, above all, a big financial power.
The Pope and the princes are closely linked with the leading
capitalist circles throughout the world. Their ties with finance
capital, with the banks and the great capitalist powers are so
obvious that they cannot be concealed. Nor does the Vatican
make any pretence at concealment.</p>
<p>“Italia”, the weekly journal of the “Catholic Action”
organisation, commenting on the expose of the Church tie-up
with industrial and finance companies, contained in Comrade
Togliatti’s report to the Sixth Congress of the Italian
Communist Party, said:
</p><blockquote>“We fail to understand how the possession of economic wealth
can be taken to mean a conjugal union with capitalism? In
society, where private property is juridically recognised it is the
duty or a juridical body like the Church to possess property in
order to realise its aims. The Church and its organisations have
concrete problems which are linked with their outer life and
which call for a solution ..."</blockquote><p></p>
<p>This is a frank confession by the hierarchy that the Vatican
today represents a powerful financial force. Nor is it surprising
therefore that this force is actively collaborating in the
reactionary policy of big capital and, in particular, in carrying
out the expansionist and aggressive policy of American
imperialism.</p>
<p>The Vatican is a huge International financial trust. It is well-
nigh impossible to assess the exact extent of its investments,
especially abroad, since both its real estate and stockholding
are in the names of trusted individuals. But Italian economists
and financial institutions have collated considerable, although
far from complete, data on this question. And the journal,
“Herald of Economic Policy”, organ of the Institute of Social
Problems, recently published some of the data.</p>
<p>In France the “French-Italian Bank for South America,” which
prior to the war had a capital of 50 million francs, is the
property of the Vatican The bank’s board of directors is in
Paris. It has branches in Holland and is one of the bulwarks of
fascism in the Argentine. The director of the ”French ,Italian
Bank” is the general governor, or more correctly speaking, the
minister of finance of the Vatican-Baron Bernardino Nogara
who, in his day represented Mussolini in Berlin at the
discussions on the Dawes Plan.</p>
<p>The Vatican holds 70 per cent of the capital in the Societe
Textiles du Nord and a large part of the capital in the Banca
Galicienne Manant, not to mention one-third of the shares in
the Worms Bank, the leaders of which collaborated with the
Germans. It is estimated that the Vatican has a capital of 200
million pre-war francs in the various joint-stock companies in
France.</p>
<p>In Spain the Church which gives whole-hearted support to
fascism, is itself, the biggest feudal-capitalist undertaking. The
Jesuits possess vast real estate, especially in Barcelona,
Madrid, Santandero and Seville. In Portugal they control the
Lisbon Banco Ultramarino which, in its turn, controls
concessions and plantations in the Portuguese colonies of
Mozambique and Angola.</p>
<p>The Vatican’s biggest investments are in America, and
especially in the United States.</p>
<p>In Buenos Aires the Vatican holds shares the tramway, electric
power, gas and water supply companies is a shareholder in the
“Mihanovich” steamship company, which has the monopoly of
shipping on the River Plate.</p>
<p>It controls the Spanish-American Bank, with headquarters in
Madrid and branches in the Argentine, Brazil and Bolivia.
In Bolivia the Vatican owns tin mines, which are exploited by
the Guggenheim Trust of New York. (This financial operation
was engineered in 1938 by Myron Taylor, at present Truman’s
representative to the Vatican.)</p>
<p>In Brazil the Jesuits control the main rubber and textile
enterprises as well as several weaving and flour mills.
In the United States the Vatican has shares or big capital
investments in Sinclair Oil, Anaconda Cooper and in a number
of other ore mining industries. In the US its interests are mainly
represented by the Morgan Bank.</p>
<p>Of the religious orders connected with the Vatican, the Jesuits
possess vast estates and considerable joint stock capital.</p>
<p>From their stronghold in Switzerland, the Jesuits exercise
control over the world’s largest electrical enterprises and over
the bank of the electrical industry. It has been estimated that the
total Vatican joint stock capital in different countries amounts
to 3,000 million pre-war lira or the equivalent of 300,000
million post-war lira. But these figures are incomplete.</p>
<p>While it is difficult to give an exact estimate of’ the capital
investments and the financial connections of the Vatican
abroad, its share and that of other church bodies in the general
joint-stock capital in Italy has been estimated precisely enough.
This is manifested in two forms: a.) control (possession of
majority of shares), and b.) participation without control. At the
present time the Vatican controls 30 Italian joint-stock
companies with a nominal capital of 300 million pre-war lira.
These companies include among others the biggest credit
companies. By means of its capital investments the Vatican has
a finger, in practically every Italian industry, particularly in the
electrical, chemical, “metallurgical, textile” and food industries
and also in transport. land and insurance societies. Vatican
holdings in the second group of enterprises are estimated at
more than 250 million pre-war lira.</p>
<p>To a considerable extent the economic life of Italy is controlled
by the Vatican through some 40 Catholic
banks and a hundred “popular banks”, whose total deposits on
December 31, 1946 exceeded 400,000 million lira, or
considerably more than half of the total national savings.</p>
<p>Moreover, as is the case abroad, the Vatican and religious
bodies dispose of vast estates in Italy. The value of immovable
property in Italy is estimated at 380,000 million lira.</p>
<p>The financial might of the Vatican and its links with the world’s
biggest companies is proof positive of its connections with the
capitalist world. These concrete worldly interests explain the
stubborn resistance of the Catholic church to reforms and to
any transformation of present-day capitalist society. They are
also the real motive of the struggle waged by the Vatican
against democracy and against the advance of the popular
forces.</p>
<p>The Vatican masks its struggle against democracy with the
slogan of anti-Communism and the “struggle for peace”. But
no amount of camouflage can conceal the real aim of this
struggle, the desire to smash the democratic forces, defeat the
popular movement, facilitate the return to power of the
reactionary, fascist regimes, accelerate the establishment in
Europe of a bloc of American satellites, who would be willing
toots for provocations against the Soviet Union and the new
democracies.</p>
<p>Commenting on the danger of a new world war the “France
Catholique” magazine stated:
</p><blockquote>“To avoid this conflict it is necessary, above all, to transform
Europe into an economic unit and to bring it into an
international economic organisation.”</blockquote><p></p>
<p>The Vatican and the entire church hierarchy gave wholehearted
support to the “Marshall Plan” and to similar US imperialist
schemes for enslaving Europe and provoking war.</p>
<p>Ordinary Catholics do not, and cannot, support this policy of
the princes of the Catholic church who are hand in glove with
big capital and the ruling clique of American imperialists.
Exploited and oppressed by capitalism, the Catholic workers,
who bore the brunt of sacrifices and hardships of war, and who
were active fighters for freedom and national independence,
are conscious of the need to unite with all working people in
the united front of peace and democracy. Today, more than ever
before, they are conscious that they must struggle for liberation
from capitalist bondage and exploitation. They know that the
only way they can prevent a return of the fascist past, is by
fighting for the new socialist society.</p>
<p> </p>
<hr>
<p class="footer">
<a href="../index.htm">Secchia Archive</a></p>
</body> |
Pietro Secchia 1948
The Vatican—Bulwark of Imperialism
Written: By Pietro Secchia, 1948;
Source: For a Lasting Peace, for a People's Democracy! Vol. 2, no. 4; February 15, 1948;
Transcribed: David Adams, March 2022.
In all capitalist countries the Vatican and the upper ranks of the
clergy invariably sided with the conservative and reactionary
ruling classes, with the big industrialists, landlords and
bankers.
The church leaders were always closely associated with
fascism in the countries where the terrorist dictatorship of
fascism held sway and fully supported and abetted its policy.
The Vatican supported Mussolini in Italy, Hitler in Germany,
Dolfuss and Schuschnigg in Austria; it supported the fascist
aggression against the Spanish people and to this day actively
supports Franco’s terrorist regime.
From the very birth of the fascist movement in Italy and
throughout the twenty years of its domination the Vatican
preached obedience to fascism. The Pope hailed Mussolini as
“the man, sent by Providence,” gave his blessing to the
adventures and criminal aggression of fascism against other
nations.
It was only when the military defeat of fascism became an
obvious and inevitable fact that the Vatican made shift to
change its policy, sought to forget its recent past, started
looking around for new points of support and depicted itself as
a champion of democracy.
The double-dealing policy pursued by the top circles of finance
capital during the Nazi occupation found apt disciples among
the princes of the Church.
Until the very last minute the Vatican tried to save fascism
from defeat, and upon meeting with failure it did everything
possible to secure a compromise peace.
After the overthrow of fascism in Italy the Vatican set in
motion all levers, material and ecclesiastical, in an endeavour
to save the monarchy.
Today the entire activities of the Vatican are directed against
the popular democratic forces, towards bolstering up the power
of the oligarchy of Italy’s industrialists and landlords, towards
the realisation of the predatory plans of American imperialism.
The Vatican is bitterly hostile to the countries of the new
democracy and lends every support to any campaign and
provocation against the USSR.
What is the explanation for the Vatican’s traditional anti-
democratic and reactionary policy? It would be wrong to
ascribe it to purely ideological, religious and clerical reasons.
The present-day Vatican is, above all, a big financial power.
The Pope and the princes are closely linked with the leading
capitalist circles throughout the world. Their ties with finance
capital, with the banks and the great capitalist powers are so
obvious that they cannot be concealed. Nor does the Vatican
make any pretence at concealment.
“Italia”, the weekly journal of the “Catholic Action”
organisation, commenting on the expose of the Church tie-up
with industrial and finance companies, contained in Comrade
Togliatti’s report to the Sixth Congress of the Italian
Communist Party, said:
“We fail to understand how the possession of economic wealth
can be taken to mean a conjugal union with capitalism? In
society, where private property is juridically recognised it is the
duty or a juridical body like the Church to possess property in
order to realise its aims. The Church and its organisations have
concrete problems which are linked with their outer life and
which call for a solution ..."
This is a frank confession by the hierarchy that the Vatican
today represents a powerful financial force. Nor is it surprising
therefore that this force is actively collaborating in the
reactionary policy of big capital and, in particular, in carrying
out the expansionist and aggressive policy of American
imperialism.
The Vatican is a huge International financial trust. It is well-
nigh impossible to assess the exact extent of its investments,
especially abroad, since both its real estate and stockholding
are in the names of trusted individuals. But Italian economists
and financial institutions have collated considerable, although
far from complete, data on this question. And the journal,
“Herald of Economic Policy”, organ of the Institute of Social
Problems, recently published some of the data.
In France the “French-Italian Bank for South America,” which
prior to the war had a capital of 50 million francs, is the
property of the Vatican The bank’s board of directors is in
Paris. It has branches in Holland and is one of the bulwarks of
fascism in the Argentine. The director of the ”French ,Italian
Bank” is the general governor, or more correctly speaking, the
minister of finance of the Vatican-Baron Bernardino Nogara
who, in his day represented Mussolini in Berlin at the
discussions on the Dawes Plan.
The Vatican holds 70 per cent of the capital in the Societe
Textiles du Nord and a large part of the capital in the Banca
Galicienne Manant, not to mention one-third of the shares in
the Worms Bank, the leaders of which collaborated with the
Germans. It is estimated that the Vatican has a capital of 200
million pre-war francs in the various joint-stock companies in
France.
In Spain the Church which gives whole-hearted support to
fascism, is itself, the biggest feudal-capitalist undertaking. The
Jesuits possess vast real estate, especially in Barcelona,
Madrid, Santandero and Seville. In Portugal they control the
Lisbon Banco Ultramarino which, in its turn, controls
concessions and plantations in the Portuguese colonies of
Mozambique and Angola.
The Vatican’s biggest investments are in America, and
especially in the United States.
In Buenos Aires the Vatican holds shares the tramway, electric
power, gas and water supply companies is a shareholder in the
“Mihanovich” steamship company, which has the monopoly of
shipping on the River Plate.
It controls the Spanish-American Bank, with headquarters in
Madrid and branches in the Argentine, Brazil and Bolivia.
In Bolivia the Vatican owns tin mines, which are exploited by
the Guggenheim Trust of New York. (This financial operation
was engineered in 1938 by Myron Taylor, at present Truman’s
representative to the Vatican.)
In Brazil the Jesuits control the main rubber and textile
enterprises as well as several weaving and flour mills.
In the United States the Vatican has shares or big capital
investments in Sinclair Oil, Anaconda Cooper and in a number
of other ore mining industries. In the US its interests are mainly
represented by the Morgan Bank.
Of the religious orders connected with the Vatican, the Jesuits
possess vast estates and considerable joint stock capital.
From their stronghold in Switzerland, the Jesuits exercise
control over the world’s largest electrical enterprises and over
the bank of the electrical industry. It has been estimated that the
total Vatican joint stock capital in different countries amounts
to 3,000 million pre-war lira or the equivalent of 300,000
million post-war lira. But these figures are incomplete.
While it is difficult to give an exact estimate of’ the capital
investments and the financial connections of the Vatican
abroad, its share and that of other church bodies in the general
joint-stock capital in Italy has been estimated precisely enough.
This is manifested in two forms: a.) control (possession of
majority of shares), and b.) participation without control. At the
present time the Vatican controls 30 Italian joint-stock
companies with a nominal capital of 300 million pre-war lira.
These companies include among others the biggest credit
companies. By means of its capital investments the Vatican has
a finger, in practically every Italian industry, particularly in the
electrical, chemical, “metallurgical, textile” and food industries
and also in transport. land and insurance societies. Vatican
holdings in the second group of enterprises are estimated at
more than 250 million pre-war lira.
To a considerable extent the economic life of Italy is controlled
by the Vatican through some 40 Catholic
banks and a hundred “popular banks”, whose total deposits on
December 31, 1946 exceeded 400,000 million lira, or
considerably more than half of the total national savings.
Moreover, as is the case abroad, the Vatican and religious
bodies dispose of vast estates in Italy. The value of immovable
property in Italy is estimated at 380,000 million lira.
The financial might of the Vatican and its links with the world’s
biggest companies is proof positive of its connections with the
capitalist world. These concrete worldly interests explain the
stubborn resistance of the Catholic church to reforms and to
any transformation of present-day capitalist society. They are
also the real motive of the struggle waged by the Vatican
against democracy and against the advance of the popular
forces.
The Vatican masks its struggle against democracy with the
slogan of anti-Communism and the “struggle for peace”. But
no amount of camouflage can conceal the real aim of this
struggle, the desire to smash the democratic forces, defeat the
popular movement, facilitate the return to power of the
reactionary, fascist regimes, accelerate the establishment in
Europe of a bloc of American satellites, who would be willing
toots for provocations against the Soviet Union and the new
democracies.
Commenting on the danger of a new world war the “France
Catholique” magazine stated:
“To avoid this conflict it is necessary, above all, to transform
Europe into an economic unit and to bring it into an
international economic organisation.”
The Vatican and the entire church hierarchy gave wholehearted
support to the “Marshall Plan” and to similar US imperialist
schemes for enslaving Europe and provoking war.
Ordinary Catholics do not, and cannot, support this policy of
the princes of the Catholic church who are hand in glove with
big capital and the ruling clique of American imperialists.
Exploited and oppressed by capitalism, the Catholic workers,
who bore the brunt of sacrifices and hardships of war, and who
were active fighters for freedom and national independence,
are conscious of the need to unite with all working people in
the united front of peace and democracy. Today, more than ever
before, they are conscious that they must struggle for liberation
from capitalist bondage and exploitation. They know that the
only way they can prevent a return of the fascist past, is by
fighting for the new socialist society.
Secchia Archive
|
./articles/Secchia-Pietro/https:..www.marxists.org.archive.secchia.1944.garibaldini | <body>
<p class="title">Pietro Secchia 1944 </p>
<h3>The Garibaldini Pass to the Offensive</h3>
<hr class="end">
<p class="information"><span class="info">First published</span>: <em>La Nostra Lotta</em>, June 1944;<br>
<span class="info">Source</span>: <em>I Communisti e l’insurrezione, 1943-45</em>, Editori Riuniti, Roma, 1973;<br>
<span class="info">Translated</span>: by <a href="../../../admin/volunteers/biographies/mabidor.htm">Mitchell Abidor</a>;<br>
<span class="info">CopyLeft</span>: <a href="../../../admin/legal/cc/by-sa.htm">Creative Commons</a> (Attribute & ShareAlike) marxists.org 2007.</p>
<p class="information">The Garibaldini were the Italian partisans affiliated with the Italian Communist Party.</p>
<hr class="end">
<p>The liberation of Rome and the Allied landing in France signal the beginning of the decisive phase of the war. The hour of the end for Nazi-fascism has sounded.</p>
<p>To the great offensives of the Soviet and Allied armies must correspond the daring and impetuous offensive of the Italian people. It is highly probable that in the coming weeks other regions of Italy will be the object of military operations of great importance.</p>
<p>It is necessary that every Communist be at the head of the struggle. It is necessary that every Communist be ready to cope with the developments of the situation . It is necessary that the Communist organizations know how to resolve – even is they are temporarily cut off from the party center – the problems that the rapid development of such a situation pose and will pose. One sole objective must guide us: passing to the offensive in order to prepare within the struggle the conditions for the national popular insurrection.</p>
<p>This means that we want and must develop and activate as much as possible the partisan front; that we must organize large scale systematic sabotage of production, the interrupting of lines of communication, the distribution of the means of transport, of arms deposits, of supplies and fuels for the enemy.</p>
<p>This means that agitation, demonstrations, strikes against hunger and deportations must be multiplied and follow one on another in a growing and ever-stronger wave, must uninterruptedly explode, must assume an ever more violent and mass character, must unite in a great general movement so as to lead to the popular insurrection.</p>
<p>What counts now is action. It’s not a matter of writing and distributing tracts, of hoisting flags, of holding meetings and making propaganda. Agitation is useful and necessary insofar as it serves to mobilize the Italian people for the insurrection; agitation is useful insofar as it serves to bring ever larger masses to the fight for the liberation of our country and for victory.</p>
<p>What counts today is action. It is absolutely necessary that every comrade realize that the essential task today of every Communist and patriot is that of, using all means, attacking the Germans; to attack him from the rear, to break up the railroad lines, to destroy machinery, to sidetrack the trains that transport German troops and material, to delay their arrival. Today the essential task of Communists and patriots is that of impeding the transport of the Nazi-fascist enemy’s troops and arms, of destroying his paths of communication, to blow up his depots. It’s a matter of systematically, at an increasing rhythm, the sabotaging of the enemy’s production. Blow upon blow must rain down from everywhere on the nazi-fascist enemy, to make life impossible for him in our country.</p>
<p>These, today, are our tasks if we want to hasten the hour of the liberation of our fatherland, the hour of victory. These are the tasks to be discussed and resolved these days in our cells if we Communists truly want to be at the head of the Italian people in struggle. No, we can’t limit ourselves to applauding and demonstrating for the liberation of Rome, to rejoice at the opening of the second front. The moment has not yet come for demonstrations of jubilation: now is the hour of struggle, the hour of action. We must facilitate, with all our force, with all our means the military actions of the Allies who have come to liberate our territory from the invader. It is our duty, our task to do all we can to see to it that the Allies succeed. These today are the tasks of the Communists, of patriots, and they are truly new tasks.</p>
<p>These new tasks, which don’t allow for delay, can only be confronted with a combatant’s spirit, with revolutionary enthusiasm. It is necessary that all comrades, those at the base as well as in positions of responsibility, break with the traditional, bureaucratic, <em>routinier</em> work of every day. It is necessary that all of us feel that there is something new in the world, that the decisive hour has come. </p>
<p>The liberation of Rome and the realization of the second front must also signify a turn in our work, must also mean for us the deployment of all our energy. We can’t continue in the humdrum of daily activity, of daily meetings, of the usual weekly cell meetings, of union discussions, of the distribution of newspapers, of the collecting of quotas, of chatting with comrades at work, of eight hours at the factory every day from Monday to Saturday, one week after the other, as if there was nothing new under the sun. No, working in this spirit means working with a wait-and-see spirit, even if you’re against waiting-and -seeing; means doing nothing differently today from what was done yesterday; means ‘waiting’ for the Allies to arrive and liberate us; means abandoning oneself to spontaneity, waiting for things to happen on their own. </p>
<p>Today the duty of every Communist and patriot is to abandon the factory, the office, the fields; to take up the gun against the German invader. Today it is the duty of Communists and Italians to plan and organize the interruption of the railway and communication lines of the enemy, to impede, hinder, delay its transport of arms and troops. Today it is the duty of every Communist and every Italian to organize and carry out in the factories, the construction sites and the offices the sabotage of production for the enemy.</p>
<p>Every day, every hour, in every factory, in every village, in every neighborhood of the city, in every path of communication something must be done that damages the Nazi-fascist enemy. Today it is the duty of every Communist to work with the sprit that animates the revolutionary combatant, who completely gives his all, without limits, for the reaching of this objective.</p>
<p>Above familiar concerns, above work issues, above personal demands, today the duty is to the fight for victory, the fight to destroy Nazi-fascism as quickly as possible. Not everyone can leave for the front, but the entire national territory should be considered one great front. Every Communist must feel the necessity of the task that he has to perform; whatever task the party has assigned him he should consider it necessary to contribute to defeating the enemy. We must work with the same enthusiasm, with the same spirit of sacrifice, with the same contempt for danger, with complete dedication, deploying all our energy, as if we were at the front. </p>
<p>If there are comrades who sleep eight hours a day, they’re sleeping too much; if there are comrades who work punctually and hard eight hours a day behind their machines, who work and produce well for war production, these comrades are not Communists, they aren’t fulfilling their duties; if there are comrades who today find too much time to rest and amuse themselves, these are not soldiers, they aren’t combatants.</p>
<p>Those comrades who work in a way as if today were yesterday are not combatants; who pass their lives as if they were in time of “peace,” and not on the eve of the national popular insurrection; who pass their lives at the workshop, the evening with the family, chatting in cafes with friends and then to bed with the wife.</p>
<p>Today the supreme duty of a Communist, of an Italian is that of being a combatant at the front and behind the lines, in front of and behind the enemy, in the mountains and in the cities, in the trenches and in the factories. </p>
<p>It is absolutely necessary that every day at day’s end every comrade be able to see that he has worked another eight hours to earn his daily bread and enrich his exploiters, but can also say: “ Today I did something to destroy Nazi-fascism, to conquer liberty. Today I dealt a blow to my mortal enemy.”</p>
<p>And so work hard, with enthusiasm, feverishly, without bureaucratic delays. Above all have present the tasks which we must today confront. In the current situation it is the task of our organisms to reduce bureaucracy, paperwork, archives, collections of documents to a minimum.</p>
<p>Become accustomed to working quickly and resolving problems promptly and not get lost in long discussions. This is not the moment for great discussions, meetings, congresses. Arriving hurriedly at the right moment with a tract, an appeal, a directive, also written rapidly, is better than arriving late with a carefully styled document. Derailing a train of German men and material tonight is worth more than passing the night making up grand projects, fantastic plans to be realized in who knows what future. </p>
<p>In particular the most qualified comrades must seek to be ready in the same way as is a combatant before the attack. They must seek to relieve themselves of all ties that are a weight and an obstacle to their action. They must organize their work in such a way as not to be tied to their technical and organizational posts. The must be in a position to be able to leave their cities from one moment to another, to go from one locality to another where their work is necessary; they must be in a position to be able to pass from political work to military work, from agitational and propaganda work to that of commanding a detachment or vice versa, according to the circumstances. </p>
<p>It is only by working with a truly practical and revolutionary spirit, only with the dedication of all our forces, of all our physical and moral energies, that we will be able to acquit our tasks of today, that we can maintain the offensive, that we can lead the national insurrection.</p>
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Pietro Secchia 1944
The Garibaldini Pass to the Offensive
First published: La Nostra Lotta, June 1944;
Source: I Communisti e l’insurrezione, 1943-45, Editori Riuniti, Roma, 1973;
Translated: by Mitchell Abidor;
CopyLeft: Creative Commons (Attribute & ShareAlike) marxists.org 2007.
The Garibaldini were the Italian partisans affiliated with the Italian Communist Party.
The liberation of Rome and the Allied landing in France signal the beginning of the decisive phase of the war. The hour of the end for Nazi-fascism has sounded.
To the great offensives of the Soviet and Allied armies must correspond the daring and impetuous offensive of the Italian people. It is highly probable that in the coming weeks other regions of Italy will be the object of military operations of great importance.
It is necessary that every Communist be at the head of the struggle. It is necessary that every Communist be ready to cope with the developments of the situation . It is necessary that the Communist organizations know how to resolve – even is they are temporarily cut off from the party center – the problems that the rapid development of such a situation pose and will pose. One sole objective must guide us: passing to the offensive in order to prepare within the struggle the conditions for the national popular insurrection.
This means that we want and must develop and activate as much as possible the partisan front; that we must organize large scale systematic sabotage of production, the interrupting of lines of communication, the distribution of the means of transport, of arms deposits, of supplies and fuels for the enemy.
This means that agitation, demonstrations, strikes against hunger and deportations must be multiplied and follow one on another in a growing and ever-stronger wave, must uninterruptedly explode, must assume an ever more violent and mass character, must unite in a great general movement so as to lead to the popular insurrection.
What counts now is action. It’s not a matter of writing and distributing tracts, of hoisting flags, of holding meetings and making propaganda. Agitation is useful and necessary insofar as it serves to mobilize the Italian people for the insurrection; agitation is useful insofar as it serves to bring ever larger masses to the fight for the liberation of our country and for victory.
What counts today is action. It is absolutely necessary that every comrade realize that the essential task today of every Communist and patriot is that of, using all means, attacking the Germans; to attack him from the rear, to break up the railroad lines, to destroy machinery, to sidetrack the trains that transport German troops and material, to delay their arrival. Today the essential task of Communists and patriots is that of impeding the transport of the Nazi-fascist enemy’s troops and arms, of destroying his paths of communication, to blow up his depots. It’s a matter of systematically, at an increasing rhythm, the sabotaging of the enemy’s production. Blow upon blow must rain down from everywhere on the nazi-fascist enemy, to make life impossible for him in our country.
These, today, are our tasks if we want to hasten the hour of the liberation of our fatherland, the hour of victory. These are the tasks to be discussed and resolved these days in our cells if we Communists truly want to be at the head of the Italian people in struggle. No, we can’t limit ourselves to applauding and demonstrating for the liberation of Rome, to rejoice at the opening of the second front. The moment has not yet come for demonstrations of jubilation: now is the hour of struggle, the hour of action. We must facilitate, with all our force, with all our means the military actions of the Allies who have come to liberate our territory from the invader. It is our duty, our task to do all we can to see to it that the Allies succeed. These today are the tasks of the Communists, of patriots, and they are truly new tasks.
These new tasks, which don’t allow for delay, can only be confronted with a combatant’s spirit, with revolutionary enthusiasm. It is necessary that all comrades, those at the base as well as in positions of responsibility, break with the traditional, bureaucratic, routinier work of every day. It is necessary that all of us feel that there is something new in the world, that the decisive hour has come.
The liberation of Rome and the realization of the second front must also signify a turn in our work, must also mean for us the deployment of all our energy. We can’t continue in the humdrum of daily activity, of daily meetings, of the usual weekly cell meetings, of union discussions, of the distribution of newspapers, of the collecting of quotas, of chatting with comrades at work, of eight hours at the factory every day from Monday to Saturday, one week after the other, as if there was nothing new under the sun. No, working in this spirit means working with a wait-and-see spirit, even if you’re against waiting-and -seeing; means doing nothing differently today from what was done yesterday; means ‘waiting’ for the Allies to arrive and liberate us; means abandoning oneself to spontaneity, waiting for things to happen on their own.
Today the duty of every Communist and patriot is to abandon the factory, the office, the fields; to take up the gun against the German invader. Today it is the duty of Communists and Italians to plan and organize the interruption of the railway and communication lines of the enemy, to impede, hinder, delay its transport of arms and troops. Today it is the duty of every Communist and every Italian to organize and carry out in the factories, the construction sites and the offices the sabotage of production for the enemy.
Every day, every hour, in every factory, in every village, in every neighborhood of the city, in every path of communication something must be done that damages the Nazi-fascist enemy. Today it is the duty of every Communist to work with the sprit that animates the revolutionary combatant, who completely gives his all, without limits, for the reaching of this objective.
Above familiar concerns, above work issues, above personal demands, today the duty is to the fight for victory, the fight to destroy Nazi-fascism as quickly as possible. Not everyone can leave for the front, but the entire national territory should be considered one great front. Every Communist must feel the necessity of the task that he has to perform; whatever task the party has assigned him he should consider it necessary to contribute to defeating the enemy. We must work with the same enthusiasm, with the same spirit of sacrifice, with the same contempt for danger, with complete dedication, deploying all our energy, as if we were at the front.
If there are comrades who sleep eight hours a day, they’re sleeping too much; if there are comrades who work punctually and hard eight hours a day behind their machines, who work and produce well for war production, these comrades are not Communists, they aren’t fulfilling their duties; if there are comrades who today find too much time to rest and amuse themselves, these are not soldiers, they aren’t combatants.
Those comrades who work in a way as if today were yesterday are not combatants; who pass their lives as if they were in time of “peace,” and not on the eve of the national popular insurrection; who pass their lives at the workshop, the evening with the family, chatting in cafes with friends and then to bed with the wife.
Today the supreme duty of a Communist, of an Italian is that of being a combatant at the front and behind the lines, in front of and behind the enemy, in the mountains and in the cities, in the trenches and in the factories.
It is absolutely necessary that every day at day’s end every comrade be able to see that he has worked another eight hours to earn his daily bread and enrich his exploiters, but can also say: “ Today I did something to destroy Nazi-fascism, to conquer liberty. Today I dealt a blow to my mortal enemy.”
And so work hard, with enthusiasm, feverishly, without bureaucratic delays. Above all have present the tasks which we must today confront. In the current situation it is the task of our organisms to reduce bureaucracy, paperwork, archives, collections of documents to a minimum.
Become accustomed to working quickly and resolving problems promptly and not get lost in long discussions. This is not the moment for great discussions, meetings, congresses. Arriving hurriedly at the right moment with a tract, an appeal, a directive, also written rapidly, is better than arriving late with a carefully styled document. Derailing a train of German men and material tonight is worth more than passing the night making up grand projects, fantastic plans to be realized in who knows what future.
In particular the most qualified comrades must seek to be ready in the same way as is a combatant before the attack. They must seek to relieve themselves of all ties that are a weight and an obstacle to their action. They must organize their work in such a way as not to be tied to their technical and organizational posts. The must be in a position to be able to leave their cities from one moment to another, to go from one locality to another where their work is necessary; they must be in a position to be able to pass from political work to military work, from agitational and propaganda work to that of commanding a detachment or vice versa, according to the circumstances.
It is only by working with a truly practical and revolutionary spirit, only with the dedication of all our forces, of all our physical and moral energies, that we will be able to acquit our tasks of today, that we can maintain the offensive, that we can lead the national insurrection.
Pietro Secchia Archive
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<h2>Frank Demby</h2>
<h4>You Had Better Read This</h4>
<h1>It Tells You How the War Is Going<br>
to Affect Your Pocketbook!</h1>
<h3>(December 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_51" target="new">Vol. 5 No. 51</a>, 22 December 1941, pp. 1 & 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">If you own an airplane factory or some other factory producing materials needed for the prosecution of war, you may make a lot of money. If you own a lot of stocks and bonds, you may also make a lot of money. If you own some choice real estate, you may find it going up in value. In short, if you are a capitalist you may find that war CAN be profitable to some. But you must be a big capitalist. The small capitalists – the little business men and farmers – probably are going to be wiped out. Since, however, the vast majority of the population of these United States are workers, people who work for a living, let us examine, on the basis of past experience, what has been happening in other countries and what seems most likely to happen here: how your pocketbook will be affected by the entry of America into World War II.</p>
<h4>*</h4>
<h4>Guns, Not Butter</h4>
<p class="fst">“Guns – not butter.” This is the slogan that Hitler used to launch his so-called four-year plan in 1936. This was, in reality, his declaration of war to the world – a declaration that German imperialism was dissatisfied with its secondary position and was going to demand its “real place in the sun.” For the German workers, who already had had their trade unions smashed, their democratic rights violated, their leaders slaughtered and tortured in the concentration camps, there now began a period of unimaginable slavery. Hours of work were lengthened to at least 10 hours a day, and in many armament industries to 14 hours a day.</p>
<p>Wages remained stationary while prices began to creep up – not very much because the totalitarian government controlled them, but still enough in the case of essential products, like potatoes, to hurt. Then came the taxes and the “voluntary” contributions. On top of these came the ration cards, which meant one egg a week, when you were lucky, a half pound of meat and similar starvation rations. To make matters worse, most of the commodities that could be obtained were more and more of the “ersatz” variety – miserable substitutes that didn’t even take away the pangs of hunger or protect the body or the home against cold winters.<br>
</p>
<h4>Labor Conscripted</h4>
<p class="fst">Malnutrition, disease, poverty became the daily lot of the German worker. Finally, the insatiable war machine demanded not only cannon fodder in various parts of Europe and Africa, but it demanded workers. Even Hitler, powerful as he is, cannot ignore the fact that without workers nothing can be produced – not even armaments. So the German workers were conscripted to work in any part of the country. And not only the German workers, but a recent estimate shows that at least 2,000,000 foreign workers, French, Spanish, Italian, etc., have been conscripted to work in German war factories. Forced labor is slavery, as the German workers and the workers of the countries conquered by Germany have discovered.</p>
<p>But war is still profitable for some. While the German workers have been starving, they have been watching the big bosses, the Nazi bureaucrats, government officials and leading manufacturers still getting fat on rich foods while the workers have been living in homes calculated to give pneumonia even to the strongest, they have had to watch their leaders living in palaces and thriving in relative opulence.</p>
<p>Pretty much the same story has been true in England. There the workers not only had to shiver in the subways during the air raids while the big bosses retired to well constructed bomb shelters that took on the appearance of night clubs, but they also had to suffer the indignity of working and slaving and starving while the rich lived off the fat of the land. Our returning travelers from England, the congressmen and college professors, love to expatiate on the new spirit of “equality” in England, of how everybody is made equal by the ration card and huge taxes, but they always forget to mention or slide over in silence the scandalous fact that if you have a large pocketbook, you can still get all the good things in life. For there still flourishes the “black market,” the illegal paradise of the speculator and profiteer, where, for a price, you can buy as many chickens as you want.<br>
</p>
<h4>Very Low Living Standards</h4>
<p class="fst">It has been estimated – and these are very, very conservative estimates – that the standard of living of the average German worker today is well below what it was in 1932 at the worst point of the depression. In England, it has been estimated that the standard of living of the average British worker has declined by one-third since the outbreak of the war. The chances are it is nearer one-half. This is the picture of every country at war. It is as true of Japan, or Russia as it is of Germany and England. Will it also be true of the United States?</p>
<p>Judging by what has happened under the defense program and by what the new Victory program calls for, there can be no doubt that the answer is “yes.” That is, as long as the industrialists and bankers are allowed to run the war, it is bound to be the same in this country as in every other country. The masses will suffer – a few will profit. After all, if everybody suffered from war, what sense would there be in having war? It is the fact that some profit and others hope to profit that makes war possible. Assuming, then, that the dollar-a-year men remain in charge of our war effort, that the brass hats keep making their incredibly stupid mistakes, let’s see how the picture shapes up.</p>
<p>First of all, this is going to be a long war. That we have already been warned about. Plans are now under way to build up an army of 7,500,000 men. It may easily reach 10,000,000 before the war is over. Fifty per cent of our production will go to the war. It may easily be 60 or 70 per cent before the war is over. All men between the ages of 18 and 64 are to be registered. This may easily be extended to include women. Shortages have already appeared in such key raw materials as rubber, tin, gasoline, etc. These will be rationed. It may be and will be extended to others. Prices in the vital wholesale markets have gone up more than 60 per cent since the beginning of the war. They will go up further.<br>
</p>
<h4>Cost of Living Jumps Here, Too!</h4>
<p class="fst">The cost of living has gone up, according to government estimates, 11 per cent since the outbreak of the war. It will go up much, much further. There is an acute shortage of labor, particularly semi-skilled and skilled labor for the war industries. Other countries have drafted labor. The probability is that along with the outlawing of strikes there will come the conscription of labor in the U.S. – in spite of the fact that conscripting labor to work for the gain of a private employer is outlawed by the 13th amendment to the Constitution as slavery.</p>
<p>Goods are being standardized. This will continue and be extended to everything – that is, to everything except war materials. People are being urged to buy defense bonds and stamps. Soon they will be forced to buy them, as is already happening in some cases, “in the best interests of the workers,” simply deducting a certain sum from each worker’s pay check to go for this or some other type of forced savings. Substitutes are being introduced. This will be extended.</p>
<p>This picture is hot that of an alarmist. It is a very sober picture based on historical fact. The picture could be extended almost indefinitely to cover every last detail. The broad outlines are quite clear for anyone with eyes to see. But while the workers and masses are suffering a steadily declining standard of living, the same picture of the rich profiting by the war as exists in other countries will be duplicated here, only more so. Profits have gone up tremendously. They will still go up.</p>
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Frank Demby
You Had Better Read This
It Tells You How the War Is Going
to Affect Your Pocketbook!
(December 1941)
From Labor Action, Vol. 5 No. 51, 22 December 1941, pp. 1 & 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
If you own an airplane factory or some other factory producing materials needed for the prosecution of war, you may make a lot of money. If you own a lot of stocks and bonds, you may also make a lot of money. If you own some choice real estate, you may find it going up in value. In short, if you are a capitalist you may find that war CAN be profitable to some. But you must be a big capitalist. The small capitalists – the little business men and farmers – probably are going to be wiped out. Since, however, the vast majority of the population of these United States are workers, people who work for a living, let us examine, on the basis of past experience, what has been happening in other countries and what seems most likely to happen here: how your pocketbook will be affected by the entry of America into World War II.
*
Guns, Not Butter
“Guns – not butter.” This is the slogan that Hitler used to launch his so-called four-year plan in 1936. This was, in reality, his declaration of war to the world – a declaration that German imperialism was dissatisfied with its secondary position and was going to demand its “real place in the sun.” For the German workers, who already had had their trade unions smashed, their democratic rights violated, their leaders slaughtered and tortured in the concentration camps, there now began a period of unimaginable slavery. Hours of work were lengthened to at least 10 hours a day, and in many armament industries to 14 hours a day.
Wages remained stationary while prices began to creep up – not very much because the totalitarian government controlled them, but still enough in the case of essential products, like potatoes, to hurt. Then came the taxes and the “voluntary” contributions. On top of these came the ration cards, which meant one egg a week, when you were lucky, a half pound of meat and similar starvation rations. To make matters worse, most of the commodities that could be obtained were more and more of the “ersatz” variety – miserable substitutes that didn’t even take away the pangs of hunger or protect the body or the home against cold winters.
Labor Conscripted
Malnutrition, disease, poverty became the daily lot of the German worker. Finally, the insatiable war machine demanded not only cannon fodder in various parts of Europe and Africa, but it demanded workers. Even Hitler, powerful as he is, cannot ignore the fact that without workers nothing can be produced – not even armaments. So the German workers were conscripted to work in any part of the country. And not only the German workers, but a recent estimate shows that at least 2,000,000 foreign workers, French, Spanish, Italian, etc., have been conscripted to work in German war factories. Forced labor is slavery, as the German workers and the workers of the countries conquered by Germany have discovered.
But war is still profitable for some. While the German workers have been starving, they have been watching the big bosses, the Nazi bureaucrats, government officials and leading manufacturers still getting fat on rich foods while the workers have been living in homes calculated to give pneumonia even to the strongest, they have had to watch their leaders living in palaces and thriving in relative opulence.
Pretty much the same story has been true in England. There the workers not only had to shiver in the subways during the air raids while the big bosses retired to well constructed bomb shelters that took on the appearance of night clubs, but they also had to suffer the indignity of working and slaving and starving while the rich lived off the fat of the land. Our returning travelers from England, the congressmen and college professors, love to expatiate on the new spirit of “equality” in England, of how everybody is made equal by the ration card and huge taxes, but they always forget to mention or slide over in silence the scandalous fact that if you have a large pocketbook, you can still get all the good things in life. For there still flourishes the “black market,” the illegal paradise of the speculator and profiteer, where, for a price, you can buy as many chickens as you want.
Very Low Living Standards
It has been estimated – and these are very, very conservative estimates – that the standard of living of the average German worker today is well below what it was in 1932 at the worst point of the depression. In England, it has been estimated that the standard of living of the average British worker has declined by one-third since the outbreak of the war. The chances are it is nearer one-half. This is the picture of every country at war. It is as true of Japan, or Russia as it is of Germany and England. Will it also be true of the United States?
Judging by what has happened under the defense program and by what the new Victory program calls for, there can be no doubt that the answer is “yes.” That is, as long as the industrialists and bankers are allowed to run the war, it is bound to be the same in this country as in every other country. The masses will suffer – a few will profit. After all, if everybody suffered from war, what sense would there be in having war? It is the fact that some profit and others hope to profit that makes war possible. Assuming, then, that the dollar-a-year men remain in charge of our war effort, that the brass hats keep making their incredibly stupid mistakes, let’s see how the picture shapes up.
First of all, this is going to be a long war. That we have already been warned about. Plans are now under way to build up an army of 7,500,000 men. It may easily reach 10,000,000 before the war is over. Fifty per cent of our production will go to the war. It may easily be 60 or 70 per cent before the war is over. All men between the ages of 18 and 64 are to be registered. This may easily be extended to include women. Shortages have already appeared in such key raw materials as rubber, tin, gasoline, etc. These will be rationed. It may be and will be extended to others. Prices in the vital wholesale markets have gone up more than 60 per cent since the beginning of the war. They will go up further.
Cost of Living Jumps Here, Too!
The cost of living has gone up, according to government estimates, 11 per cent since the outbreak of the war. It will go up much, much further. There is an acute shortage of labor, particularly semi-skilled and skilled labor for the war industries. Other countries have drafted labor. The probability is that along with the outlawing of strikes there will come the conscription of labor in the U.S. – in spite of the fact that conscripting labor to work for the gain of a private employer is outlawed by the 13th amendment to the Constitution as slavery.
Goods are being standardized. This will continue and be extended to everything – that is, to everything except war materials. People are being urged to buy defense bonds and stamps. Soon they will be forced to buy them, as is already happening in some cases, “in the best interests of the workers,” simply deducting a certain sum from each worker’s pay check to go for this or some other type of forced savings. Substitutes are being introduced. This will be extended.
This picture is hot that of an alarmist. It is a very sober picture based on historical fact. The picture could be extended almost indefinitely to cover every last detail. The broad outlines are quite clear for anyone with eyes to see. But while the workers and masses are suffering a steadily declining standard of living, the same picture of the rich profiting by the war as exists in other countries will be duplicated here, only more so. Profits have gone up tremendously. They will still go up.
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<h2>T.N. Vance</h2>
<h1>The Economic Outlook for 1954</h1>
<h4>The Administration’s Anti-Recession Program</h4>
<h3>(March 1954)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni54_01" target="new">Vol. XX No. 1</a>, January–February 1954, pp. 8–10.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">The economic outlook for 1954 has now become the dominant question, governing all political forecasts. While it is still eight months to the Congressional elections in November, there can be little doubt that the Republican politicians are worried lest an unfavorable economic outlook accentuate the normal loss of Congressional seats that the party in power must usually expect a non-presidential election year. The result could easily be that the Democrats will capture a solid majority in both Houses of Congress.</p>
<p>Certainly, if unemployment in November exceeds present levels – barring an all-out hot war – the Republicans will suffer a resounding defeat. Just what the present (March) level of unemployment is – the month Eisenhower stated would be decisive in determining whether the Government would intervene in the economy – is impossible to say. The January figure exceeded 3,000,000. The February figure should have been released on March 1st. Publication has been postponed until March 15th. Why? Ostensibly to permit checking of the new sample used to estimate the amount of unemployment. It might also be that the February figure shows unemployment to have risen sharply. Politically, it may be more convenient to announce a February unemployment figure of 4,000,000 or thereabouts at the end of March, while (the administration most hope) advance indications show a decline in unemployment for March.</p>
<p><em>The Economic Report of the President to Congress</em>, dated January 28, 1954, concludes its evaluation of the current economic outlook by stating: “Our economy today is highly prosperous, and enjoys great basic strength. <em>The minor readjustment underway since mid-1953 is likely soon to come to a close, especially if the recommendations of the Administration are adopted.</em>” (Italics mine – <em>T.N.V.</em>) Actually, the “minor readjustment” is a full-fledged recession, already amounting to a decline of approximately 10 per cent since it began in the second quarter of 1953. The overwhelming majority of economists attending the annual meetings of the American Economics Association and the American Statistical Association at the end of December is clearly of the opinion that “The United States economy already is in a downturn. It faces the prospect of an ‘orthodox recession’ in 1954 with total output down $10,000,000,000 to $18,000,000,000 from 1953’s extraordinarily high levels.” (<strong>The New York Times</strong>, Dec. 29, 1953.)</p>
<p>While the American economists do not share the opinion of Colin Clark, leading Australian economist, that the economy is heading for a severe depression, they do appear to expect the decline to last throughout 1954. In other words, the professional economists will be surprised if the “re-adjustment” ends “soon.” As a matter of record, the Joint Committee on the Economic Report (officially established by Congress to appraise the President’s Economic Report, and composed of a majority of Republicans) is quoted in the <strong>New York Times</strong> of February 27, 1951 as “not fully satisfied with the Government’s anti-recession program, and (it) finds the administration’s farm program particularly unsatisfactory.”</p>
<p>Just what is the administration’s “anti-recession” program? It was supposed to have been stated explicitly and at length in the President’s State of the Union Message, the Budget, and the Economic Report. By and large, the Eisenhower anti-recession program consists of three parts denial that a recession exists and one part piously wishing that it would go away – if it does exist. These three major policy documents can be searched from beginning to end, and any anti-recession program will he found conspicuous by its absence. There is discernible an anti-New Deal philosophy, typically expressed by the following paragraph from the Budget Message:</p>
<p class="quoteb">“This budget marks the beginning of a movement to shift to State and local government and to private enterprise Federal activities which can be more appropriately and more efficiently carried on in that way. The lending activities of the Reconstruction Finance Corporation; the services provided by the inland Waterways Corporation; certain agricultural activities; and some aspects of our health, education, and welfare programs are examples of this type of action.”</p>
<p class="fst">Nevertheless, there is an administration program. Officially, it can be summarised as providing tax incentives and other necessary stimuli to capital investment. Unofficially, it might he called Turning the Country Back to the Indians (read: Monopoly Capital) or How To Loot the Public Treasury in Three Easy Lessons. Whether it be reducing the taxes on dividends, or more rapid depreciation allowances, or other fiscal policy, the philosophy stems from the theory that what is good for big business (General Motors and its allies) is good for the country.</p>
<p>Much of the theoretical foundation for the administration’s program apparently originates with Arthur F. Burns, Chairman of the Council of Economic Advisers, who is interviewed in the <strong>New York Times</strong> of Feb. 22, 1951 by Joseph A. Loftus on the occasion of the publication of a collection of Burns’ essays. The heart of the Burns philosophy is revealed by the following exchange:</p>
<p>In an essay written in 1948, he made this observation about Government policy in the depression of the Nineteen Thirties:</p>
<p class="quoteb">“On the whole, consumer spending responded much better to the Governmental measures than private investment.”</p>
<p class="quote">How, then, could he justify an Administration tax policy now that puts emphasis on incentive to private investment rather than on consumer spending?</p>
<p class="quote">The circumstances were quite different then, he explained. The present tax program would have made no sense whatever in the early days of that depression. Business confidence was shattered. Now it is different. Stock prices are up, commodity prices are not down. Investment expenditures are being pretty well maintained. Business confidence is running high. There is a good chance of stimulating investment further.</p>
<p class="quote">As the question is being stated – “do you want to stimulate consumption or production?” – Dr. Burns continued, the “underconsumptionists” would win.</p>
<p class="quote">But, he said, that does not state the issue correctly. As the facts are now, he said, <em>if you cut a consumer’s tax $1, he may spend from zero to $1, no more. If you cut business taxes $1, business may spend as much as $50. A new environment for business spending is created</em>.</p>
<p class="fst">If business confidence is high, why is there need to stimulate it?</p>
<p class="quoteb"><em>There has been a decline, he said, adding that no responsible thinker can say positively it will be self-limiting. It could become a spiraling contraction</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Just what good it would do to stimulate capital expansion, when the source of the present recession is the crisis in agricultural production and in certain consumer durables, especially automobiles, is not explained by Dr. Burns, for he has yet to ask himself (publicly) what is the cause of the present decline? And yet, according to Loftus, in the above-quoted article: “This is some of the thinking of the man who probably does more to shape the economic policies of the Administration than any other individual except the President.”</p>
<p>Whether it is a better understanding of economics, or a keener political sense that is responsible, the Democrats have dramatically focused attention on the Administration’s pro-Big Business orientation by the proposal of Senator George that income tax exemption credit for dependents be increased from the present $600 to $800 and then, next year, to $1,000. Such a proposal, of course, would benefit the mass of the population and would serve to stimulate consumption.</p>
<p>Although the administration has officially come out against the George proposal, Congressional Republicans are uneasy about entering an election campaign with unemployment at the four or five million mark, and with the Democrats pushing tax relief for the masses while the Republicans are committed to tax relief for finance capital. That is why the Joint Committee on the Economic Report, mentioned above, is quoted as saying: “Tax relief for the middle and lower income brackets, to bolster consumer demand, might be desirable sooner than President Eisenhower has indicated.” And further: <em>“Better preparations for a public works program are necessary; there should be a public works administrator, responsible directly to the President,</em> and substantial credit should be available to local communities for such projects.” (Italics mine – <em>T.N.V.</em>) Shades of WPA and PWA!</p>
<p>The Loftus interview with Burns concludes by quoting from one of Burns’ essays: “Subtle understanding of economic change comes from a knowledge of history and large affairs, not from statistics or their processing alone – to which our disturbed age has turned so eagerly in its quest for certainty.” To which we say “Amen!” Such understanding, however, cannot be found in Burns or in the Eisenhower administration.</p>
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<p class="fst">T.N. Vance<br>
<em>March 7, 1951</em></p>
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T.N. Vance
The Economic Outlook for 1954
The Administration’s Anti-Recession Program
(March 1954)
From The New International, Vol. XX No. 1, January–February 1954, pp. 8–10.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The economic outlook for 1954 has now become the dominant question, governing all political forecasts. While it is still eight months to the Congressional elections in November, there can be little doubt that the Republican politicians are worried lest an unfavorable economic outlook accentuate the normal loss of Congressional seats that the party in power must usually expect a non-presidential election year. The result could easily be that the Democrats will capture a solid majority in both Houses of Congress.
Certainly, if unemployment in November exceeds present levels – barring an all-out hot war – the Republicans will suffer a resounding defeat. Just what the present (March) level of unemployment is – the month Eisenhower stated would be decisive in determining whether the Government would intervene in the economy – is impossible to say. The January figure exceeded 3,000,000. The February figure should have been released on March 1st. Publication has been postponed until March 15th. Why? Ostensibly to permit checking of the new sample used to estimate the amount of unemployment. It might also be that the February figure shows unemployment to have risen sharply. Politically, it may be more convenient to announce a February unemployment figure of 4,000,000 or thereabouts at the end of March, while (the administration most hope) advance indications show a decline in unemployment for March.
The Economic Report of the President to Congress, dated January 28, 1954, concludes its evaluation of the current economic outlook by stating: “Our economy today is highly prosperous, and enjoys great basic strength. The minor readjustment underway since mid-1953 is likely soon to come to a close, especially if the recommendations of the Administration are adopted.” (Italics mine – T.N.V.) Actually, the “minor readjustment” is a full-fledged recession, already amounting to a decline of approximately 10 per cent since it began in the second quarter of 1953. The overwhelming majority of economists attending the annual meetings of the American Economics Association and the American Statistical Association at the end of December is clearly of the opinion that “The United States economy already is in a downturn. It faces the prospect of an ‘orthodox recession’ in 1954 with total output down $10,000,000,000 to $18,000,000,000 from 1953’s extraordinarily high levels.” (The New York Times, Dec. 29, 1953.)
While the American economists do not share the opinion of Colin Clark, leading Australian economist, that the economy is heading for a severe depression, they do appear to expect the decline to last throughout 1954. In other words, the professional economists will be surprised if the “re-adjustment” ends “soon.” As a matter of record, the Joint Committee on the Economic Report (officially established by Congress to appraise the President’s Economic Report, and composed of a majority of Republicans) is quoted in the New York Times of February 27, 1951 as “not fully satisfied with the Government’s anti-recession program, and (it) finds the administration’s farm program particularly unsatisfactory.”
Just what is the administration’s “anti-recession” program? It was supposed to have been stated explicitly and at length in the President’s State of the Union Message, the Budget, and the Economic Report. By and large, the Eisenhower anti-recession program consists of three parts denial that a recession exists and one part piously wishing that it would go away – if it does exist. These three major policy documents can be searched from beginning to end, and any anti-recession program will he found conspicuous by its absence. There is discernible an anti-New Deal philosophy, typically expressed by the following paragraph from the Budget Message:
“This budget marks the beginning of a movement to shift to State and local government and to private enterprise Federal activities which can be more appropriately and more efficiently carried on in that way. The lending activities of the Reconstruction Finance Corporation; the services provided by the inland Waterways Corporation; certain agricultural activities; and some aspects of our health, education, and welfare programs are examples of this type of action.”
Nevertheless, there is an administration program. Officially, it can be summarised as providing tax incentives and other necessary stimuli to capital investment. Unofficially, it might he called Turning the Country Back to the Indians (read: Monopoly Capital) or How To Loot the Public Treasury in Three Easy Lessons. Whether it be reducing the taxes on dividends, or more rapid depreciation allowances, or other fiscal policy, the philosophy stems from the theory that what is good for big business (General Motors and its allies) is good for the country.
Much of the theoretical foundation for the administration’s program apparently originates with Arthur F. Burns, Chairman of the Council of Economic Advisers, who is interviewed in the New York Times of Feb. 22, 1951 by Joseph A. Loftus on the occasion of the publication of a collection of Burns’ essays. The heart of the Burns philosophy is revealed by the following exchange:
In an essay written in 1948, he made this observation about Government policy in the depression of the Nineteen Thirties:
“On the whole, consumer spending responded much better to the Governmental measures than private investment.”
How, then, could he justify an Administration tax policy now that puts emphasis on incentive to private investment rather than on consumer spending?
The circumstances were quite different then, he explained. The present tax program would have made no sense whatever in the early days of that depression. Business confidence was shattered. Now it is different. Stock prices are up, commodity prices are not down. Investment expenditures are being pretty well maintained. Business confidence is running high. There is a good chance of stimulating investment further.
As the question is being stated – “do you want to stimulate consumption or production?” – Dr. Burns continued, the “underconsumptionists” would win.
But, he said, that does not state the issue correctly. As the facts are now, he said, if you cut a consumer’s tax $1, he may spend from zero to $1, no more. If you cut business taxes $1, business may spend as much as $50. A new environment for business spending is created.
If business confidence is high, why is there need to stimulate it?
There has been a decline, he said, adding that no responsible thinker can say positively it will be self-limiting. It could become a spiraling contraction. (Italics mine – T.N.V.)
Just what good it would do to stimulate capital expansion, when the source of the present recession is the crisis in agricultural production and in certain consumer durables, especially automobiles, is not explained by Dr. Burns, for he has yet to ask himself (publicly) what is the cause of the present decline? And yet, according to Loftus, in the above-quoted article: “This is some of the thinking of the man who probably does more to shape the economic policies of the Administration than any other individual except the President.”
Whether it is a better understanding of economics, or a keener political sense that is responsible, the Democrats have dramatically focused attention on the Administration’s pro-Big Business orientation by the proposal of Senator George that income tax exemption credit for dependents be increased from the present $600 to $800 and then, next year, to $1,000. Such a proposal, of course, would benefit the mass of the population and would serve to stimulate consumption.
Although the administration has officially come out against the George proposal, Congressional Republicans are uneasy about entering an election campaign with unemployment at the four or five million mark, and with the Democrats pushing tax relief for the masses while the Republicans are committed to tax relief for finance capital. That is why the Joint Committee on the Economic Report, mentioned above, is quoted as saying: “Tax relief for the middle and lower income brackets, to bolster consumer demand, might be desirable sooner than President Eisenhower has indicated.” And further: “Better preparations for a public works program are necessary; there should be a public works administrator, responsible directly to the President, and substantial credit should be available to local communities for such projects.” (Italics mine – T.N.V.) Shades of WPA and PWA!
The Loftus interview with Burns concludes by quoting from one of Burns’ essays: “Subtle understanding of economic change comes from a knowledge of history and large affairs, not from statistics or their processing alone – to which our disturbed age has turned so eagerly in its quest for certainty.” To which we say “Amen!” Such understanding, however, cannot be found in Burns or in the Eisenhower administration.
T.N. Vance
March 7, 1951
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<hr width="100%" noshade="noshade" size="1">
<h2>Frank Demby</h2>
<h1>Arming for Boss War</h1>
<h3>(November 1940)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1940/index.htm#la04_22" target="new">Vol. 4 No. 32</a>, 18 November 1940, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<h3>Who Pays?</h3>
<p class="quoteb">“We have just begun to rearm. There must be a higher debt limit and new taxes.”</p>
<p class="fst">So said Secretary of Treasury, Mr. Morgenthau, two days after Roosevelt was re-elected for a third term. Conservative estimates indicate that the government will spend at least 20 billion dollars during the next year and a half. This is a lot of money, no matter how one looks at it. It amounts to about 30% of the of the current national income.</p>
<p>We know how Germany is financing the war – by increasing the working day to 12 and 14 hours, speeding up labor, higher taxes that fall most heavily on the masses of the people, by looting the occupied territories through a system of scientific stealing – in two words, by a system of <em>forced labor</em>. A totalitarian regime is well equipped for this method. The institution of an extremely rigid type of capitalist slavery is the fundamental reason why fascism came to power.<br>
</p>
<h4>The Lesson of England</h4>
<p class="fst">How is the war financed in England, a democratic capitalist country? Does England, which claims to be fighting a war for democracy, finance the war in a more democratic way possible, by having those most able to pay for themselves cost of the war (about 36 million dollars daily)? Are the standards of living of the English masses maintained? the answer is very definitely, no! The <strong>London Economist</strong>’s index of British prices on Nov. 5, 1940 was about 42% higher than at the outbreak of the war. In spite of higher taxes, the British capitalist is finding the war very profitable, aside from those whose plants have been destroyed by bombings – and these will probably be reimbursed by the government. Conservative bourgeois sources indicate that the average standard of living of the British worker (aside from those rendered homeless by bombings) has declined about one-third since the outbreak of the war. In both England and Germany, the masses are bearing the burden of World War II, thus destroying a lot of the fake pretexts given for the war. Must we expect the same sort of thing in this country? The opinion of London financial circles is very interesting, in view of the experience the British have had with this problem.</p>
<p class="quoteb">“It is felt,” says a dispatch to the <strong>New York Times</strong>, dated Nov. 10, “that the New Deal policies will be pushed into the background by more urgent requirements of rearmament and even larger United States backing for the British war effort. It is remarked by commentators in the financial press that the urgency of the production drive entails on Mr. Roosevelt the necessity of treating big business more gently than hitherto.”<br>
</p>
<h4>Workers Will Pay</h4>
<p class="fst">Comment on this is really superfluous. The British capitalists need not fear for their American brethren. Roosevelt does not need their advice. He has already taken the necessary steps to make sure that the American workers pay for the cost of rearmament. When the “defense” program was first projected earlier this year, Roosevelt indicated very clearly how he was going to handle the problem of paying for the cost of the program by broadening the base of the income tax, so that those in the lower income brackets, who have hitherto been exempt, will now pay an income tax. The rates have been stepped up so that the workers and lower middle classes will pay proportionately much more than previously. Special “national defense” taxes were levied on amusements, movies, gasoline, liquor and tobacco, which, of course, fall most heavily on the masses. Government employees will pay both a state and federal income tax.</p>
<p>Now that the election is over, the program is unfolded in all its reactionary splendor. Most of the money, it seems, is to be raised by increasing the national debt limit to $60,000,000,000 (it is now 45 billions). This, as Wall Street correctly interpreted, is a measure with inflationary tendencies. “I have no fear of inflation now that President Roosevelt is back,” says the eminent Secretary of Treasury, but just why Roosevelt should be any better able to prevent rising prices than Churchill, he does not indicate. Without the introduction of prices, which mean a lower standard of living for the masses, are inevitable.<br>
</p>
<h4>The Tax Swindle</h4>
<p class="fst">It is also indicated that a small portion of the money will be raised by new taxes. I have already indicated in a previous article, that the excess profits tax is a swindle and will raise very little. What new taxes are meant? The only one indicated is a proposal to tax government bonds, which are now tax exempt.</p>
<p>This explains why the banks and big corporations have been getting rid of their government bonds during the past few months. Some money will undoubtedly be raised by this method, but we can expect that it will be chiefly through another Liberty Loan campaign, which means that the lower middle classes and higher-paid workers will bear the brunt of the patriotic salesmanship pressure. Other taxes, since present measures are obviously inadequate to cover the cost of the program, will most likely be forthcoming. Our experiences to date, however, indicate that it is “we, the little people,” who will pay for them. Since the squeeze on the government’s finances will become tighter and tighter, no matter how much the normal revenue from taxation is increased due to a higher national income, we can expect also that very shortly Roosevelt will begin to listen to Senator Byrd and others who propose that “we should at once economize on non-essential peacetime spending.” By “non-essential” spending, these people, of course, mean WPA, slum-clearance and the like. As long as Roosevelt refuses to make those who can afford to pay for the “defense” program, it’s a cinch that the workers and broad masses will bear the brunt of the rearmament program. And why, indeed, should it be any different here than in England or Germany?</p>
<hr class="section" size="1" noshade="noshade">
<h3>Who Profits?</h3>
<p class="quoteb">“The profits of twenty-eight steel companies for the first nine months of 1940 were $169,919,408, compared with $54,606,254 in the same period in 1939, despite the fact that tax appropriations for the current year were virtually double those in the comparable period. The increase amounts to 211% for the nine months.”</p>
<p class="fst">The above quotation, from an article in the financial section of the <strong>New York Times</strong> on Nov. 10, gives the answer to our question. It merely gives actual figures for a generally-observed situation. Business is booming. Production levels will probably exceed 1929 levels for 1940. Profits will be very close to 1929 profits.</p>
<p>It is estimated that profits for all industry will reach the total of 10 billion dollars in 1940. (Why not just take all of this – if rearming is what the bosses want!) America has definitely entered upon an armaments boom, which will be much, much greater during 1941 than even during 1940. The only difference between the present boom and the 1929 boom, aside from the fact that an armaments boom is never very sound or lasting, is that most of the big profits are made by even fewer of the big corporations. In the case of the steel profits cited above, for example, 12 steel leaders made net profits of $157,341,000 during the first nine months of 1940. The other 16 steel companies made only 12½ millions – enough to keep the wolf away from the door, but chicken feed compared to the money made by U.S. Steel, Bethlehem, Republic, Weir’s National Steel, and the other big steel corporations.<br>
</p>
<h4>Prosperity for Rich</h4>
<p class="fst">The same story is true in auto, rubber, oil and the other mass production industries. Prosperity has arrived for America’s 60 families and their friends. Chemical, aviation, shipbuilding and munitions factories are working 24 hours a day. Orders are piled up for a year or two in advance. And most of this increase in production is being accomplished with relatively little increase in the number of workers hired. The investments in plant and equipment are so large that most of these industries will pay hardly and excess profits tax. Anti-trust laws and prosecutions against big business monopolies are being suspended in the interests of “national defense.”<br>
</p>
<h4>Labor’s Opportunity</h4>
<p class="fst">Here it would seem, lies the big opportunity for America’s trade unions, especially the CIO, which has most of the unions in the mass production industries, to demand substantial wage increases. Industry cannot justifiably raise the argument that it cannot “afford” higher wages and better working conditions. The figures show otherwise. Moreover, in spite of the organization drives of the CIO, these industries are still largely unorganized. Those that are organized, however, are making just as big profits as those that are unorganized. Just compare U.S. Steel, which is organized, with Bethlehem and Little Steel which are unorganized. Or, General Motors with Ford. Or, the independent oil companies with Standard Oil.</p>
<p>This is labor’s big opportunity. Failure to take advantage of it, however, will mean not only the death of certain unions, but it will mean that big business with its reactionary social program, will be more firmly in the saddle than ever. Wartime prosperity has, in the past, usually been accompanied by increased labor organization and the growth of the trade union movement. But that was in the period of expanding capitalism.</p>
<p>The present period, in spite of the war-time boom, is a period of declining capitalism. The bosses will fight even more desperately, therefore, against any attempts at organization by labor. The union movement, under pressure from the unorganized workers and the rank and file of labor, in general, will be compelled in the interests of self-preservation to widen and strengthen its efforts at organization. It will run smack up against the cry, “If you strike, you are interfering with national defense.” And this, at a time when big capital is writing its own ticket as to the terms on which it will cooperate with the rearmament program. The battle to organize the mass production industries, especially the key “defense” industries like aviation, chemicals, munitions and ship-building, will, through its outcome, determine in large part the future of this country.</p>
<p>If the unions fail to measure up to the responsibility that is theirs, even such labor standards and unions as exist now will be destroyed. If, on the other hand, the unions succeed in defending and advancing the basic economic rights of labor, then we will have taken a long step forward in the struggle to maintain our elementary rights, and, ultimately, to advance towards a socialist society.</p>
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Frank Demby
Arming for Boss War
(November 1940)
From Labor Action, Vol. 4 No. 32, 18 November 1940, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Who Pays?
“We have just begun to rearm. There must be a higher debt limit and new taxes.”
So said Secretary of Treasury, Mr. Morgenthau, two days after Roosevelt was re-elected for a third term. Conservative estimates indicate that the government will spend at least 20 billion dollars during the next year and a half. This is a lot of money, no matter how one looks at it. It amounts to about 30% of the of the current national income.
We know how Germany is financing the war – by increasing the working day to 12 and 14 hours, speeding up labor, higher taxes that fall most heavily on the masses of the people, by looting the occupied territories through a system of scientific stealing – in two words, by a system of forced labor. A totalitarian regime is well equipped for this method. The institution of an extremely rigid type of capitalist slavery is the fundamental reason why fascism came to power.
The Lesson of England
How is the war financed in England, a democratic capitalist country? Does England, which claims to be fighting a war for democracy, finance the war in a more democratic way possible, by having those most able to pay for themselves cost of the war (about 36 million dollars daily)? Are the standards of living of the English masses maintained? the answer is very definitely, no! The London Economist’s index of British prices on Nov. 5, 1940 was about 42% higher than at the outbreak of the war. In spite of higher taxes, the British capitalist is finding the war very profitable, aside from those whose plants have been destroyed by bombings – and these will probably be reimbursed by the government. Conservative bourgeois sources indicate that the average standard of living of the British worker (aside from those rendered homeless by bombings) has declined about one-third since the outbreak of the war. In both England and Germany, the masses are bearing the burden of World War II, thus destroying a lot of the fake pretexts given for the war. Must we expect the same sort of thing in this country? The opinion of London financial circles is very interesting, in view of the experience the British have had with this problem.
“It is felt,” says a dispatch to the New York Times, dated Nov. 10, “that the New Deal policies will be pushed into the background by more urgent requirements of rearmament and even larger United States backing for the British war effort. It is remarked by commentators in the financial press that the urgency of the production drive entails on Mr. Roosevelt the necessity of treating big business more gently than hitherto.”
Workers Will Pay
Comment on this is really superfluous. The British capitalists need not fear for their American brethren. Roosevelt does not need their advice. He has already taken the necessary steps to make sure that the American workers pay for the cost of rearmament. When the “defense” program was first projected earlier this year, Roosevelt indicated very clearly how he was going to handle the problem of paying for the cost of the program by broadening the base of the income tax, so that those in the lower income brackets, who have hitherto been exempt, will now pay an income tax. The rates have been stepped up so that the workers and lower middle classes will pay proportionately much more than previously. Special “national defense” taxes were levied on amusements, movies, gasoline, liquor and tobacco, which, of course, fall most heavily on the masses. Government employees will pay both a state and federal income tax.
Now that the election is over, the program is unfolded in all its reactionary splendor. Most of the money, it seems, is to be raised by increasing the national debt limit to $60,000,000,000 (it is now 45 billions). This, as Wall Street correctly interpreted, is a measure with inflationary tendencies. “I have no fear of inflation now that President Roosevelt is back,” says the eminent Secretary of Treasury, but just why Roosevelt should be any better able to prevent rising prices than Churchill, he does not indicate. Without the introduction of prices, which mean a lower standard of living for the masses, are inevitable.
The Tax Swindle
It is also indicated that a small portion of the money will be raised by new taxes. I have already indicated in a previous article, that the excess profits tax is a swindle and will raise very little. What new taxes are meant? The only one indicated is a proposal to tax government bonds, which are now tax exempt.
This explains why the banks and big corporations have been getting rid of their government bonds during the past few months. Some money will undoubtedly be raised by this method, but we can expect that it will be chiefly through another Liberty Loan campaign, which means that the lower middle classes and higher-paid workers will bear the brunt of the patriotic salesmanship pressure. Other taxes, since present measures are obviously inadequate to cover the cost of the program, will most likely be forthcoming. Our experiences to date, however, indicate that it is “we, the little people,” who will pay for them. Since the squeeze on the government’s finances will become tighter and tighter, no matter how much the normal revenue from taxation is increased due to a higher national income, we can expect also that very shortly Roosevelt will begin to listen to Senator Byrd and others who propose that “we should at once economize on non-essential peacetime spending.” By “non-essential” spending, these people, of course, mean WPA, slum-clearance and the like. As long as Roosevelt refuses to make those who can afford to pay for the “defense” program, it’s a cinch that the workers and broad masses will bear the brunt of the rearmament program. And why, indeed, should it be any different here than in England or Germany?
Who Profits?
“The profits of twenty-eight steel companies for the first nine months of 1940 were $169,919,408, compared with $54,606,254 in the same period in 1939, despite the fact that tax appropriations for the current year were virtually double those in the comparable period. The increase amounts to 211% for the nine months.”
The above quotation, from an article in the financial section of the New York Times on Nov. 10, gives the answer to our question. It merely gives actual figures for a generally-observed situation. Business is booming. Production levels will probably exceed 1929 levels for 1940. Profits will be very close to 1929 profits.
It is estimated that profits for all industry will reach the total of 10 billion dollars in 1940. (Why not just take all of this – if rearming is what the bosses want!) America has definitely entered upon an armaments boom, which will be much, much greater during 1941 than even during 1940. The only difference between the present boom and the 1929 boom, aside from the fact that an armaments boom is never very sound or lasting, is that most of the big profits are made by even fewer of the big corporations. In the case of the steel profits cited above, for example, 12 steel leaders made net profits of $157,341,000 during the first nine months of 1940. The other 16 steel companies made only 12½ millions – enough to keep the wolf away from the door, but chicken feed compared to the money made by U.S. Steel, Bethlehem, Republic, Weir’s National Steel, and the other big steel corporations.
Prosperity for Rich
The same story is true in auto, rubber, oil and the other mass production industries. Prosperity has arrived for America’s 60 families and their friends. Chemical, aviation, shipbuilding and munitions factories are working 24 hours a day. Orders are piled up for a year or two in advance. And most of this increase in production is being accomplished with relatively little increase in the number of workers hired. The investments in plant and equipment are so large that most of these industries will pay hardly and excess profits tax. Anti-trust laws and prosecutions against big business monopolies are being suspended in the interests of “national defense.”
Labor’s Opportunity
Here it would seem, lies the big opportunity for America’s trade unions, especially the CIO, which has most of the unions in the mass production industries, to demand substantial wage increases. Industry cannot justifiably raise the argument that it cannot “afford” higher wages and better working conditions. The figures show otherwise. Moreover, in spite of the organization drives of the CIO, these industries are still largely unorganized. Those that are organized, however, are making just as big profits as those that are unorganized. Just compare U.S. Steel, which is organized, with Bethlehem and Little Steel which are unorganized. Or, General Motors with Ford. Or, the independent oil companies with Standard Oil.
This is labor’s big opportunity. Failure to take advantage of it, however, will mean not only the death of certain unions, but it will mean that big business with its reactionary social program, will be more firmly in the saddle than ever. Wartime prosperity has, in the past, usually been accompanied by increased labor organization and the growth of the trade union movement. But that was in the period of expanding capitalism.
The present period, in spite of the war-time boom, is a period of declining capitalism. The bosses will fight even more desperately, therefore, against any attempts at organization by labor. The union movement, under pressure from the unorganized workers and the rank and file of labor, in general, will be compelled in the interests of self-preservation to widen and strengthen its efforts at organization. It will run smack up against the cry, “If you strike, you are interfering with national defense.” And this, at a time when big capital is writing its own ticket as to the terms on which it will cooperate with the rearmament program. The battle to organize the mass production industries, especially the key “defense” industries like aviation, chemicals, munitions and ship-building, will, through its outcome, determine in large part the future of this country.
If the unions fail to measure up to the responsibility that is theirs, even such labor standards and unions as exist now will be destroyed. If, on the other hand, the unions succeed in defending and advancing the basic economic rights of labor, then we will have taken a long step forward in the struggle to maintain our elementary rights, and, ultimately, to advance towards a socialist society.
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<h2>Kenneth MacKenzie & T.N. Vance</h2>
<h1>An Exchange on Nationalisation</h1>
<h4>A Discussion of Government Ownership of War Industries</h4>
<h3>(March 1952)</h3>
<hr noshade="noshade" size="1" width="100%">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni52_03" target="new">Vol. XVIII No. 2</a>, March–April 1952, pp. 108–111.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr noshade="noshade" size="1" width="100%">
<a name="km"></a>
<p class="fst">To the Editor:</p>
<p class="fst">Your publication continues to be one of the few things I read that consistently makes sense. It is only because I like you that I would venture a little disagreement.</p>
<p>T.N. Vance ends his brilliant series on the was economy with what seems to me too great an emphasis on the proposal – “Nationalize the War Industries.” He says this must now be the chief slogan of socialists, and gives it special place among the other transitional slogans as corresponding to the needs of the workers and the times. But how does it actually fit in with our other demands and our philosophy?</p>
<p>The paid thinkers of the rich like to equate socialism with any build-up in the authority of the state. But we have learned to our sorrow that the equation is false. The most nationalized state in existence is the least social, the least beneficial to man. There exists no economic law to guarantee that as economic power is taken from individual companies or combines of companies and put in the hands of a government, it thereby is any easier for the working class to control and apply to pro-human ends.</p>
<p>Many workers who now find it easier to deal with private employers would consider it is calamity for the government to operate all big industry.</p>
<p>If carried into effect, nationalization, unlike the other transitional demands, might not stimulate worker power as opposed to owner power. The sliding scale, though distorted by the employers, has raised a great issue and exposed the administration’s wage-price fakery. With the “books” once opened, things would never again be quite the same. Worker’s control, worker’s defense, these things build the confidence of the class and instruct and educate workers to take further responsibilities.</p>
<p>But putting all economic power in Washington, even under an administration of labor leaders, still leaves open the possibility of transition from a capitalist to a bureaucrat state. And compensation to former owners may eat up the economic benefits. So it seems to me that we should support nationalization if in time of crisis the American working class desires to take this road as have the English, Germans, etc., but not make it an unqualified fundamental issue at any and all times.</p>
<table width="100%">
<tbody>
<tr>
<td width="70%">
<p> </p>
</td>
<td>
<p class="fst">Sincerely yours,<br>
Kenneth MacKenzie</p>
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<p class="link"><a href="#top" target="_blank">Top of page</a></p>
<p> </p>
<a name="tnv"></a>
<h2>Reply by Vance</h2>
<p class="fst">Kenneth MacKenzie is, of course, absolutely correct when he observes that nationalization in and of itself is not necessarily progressive – and may well be reactionary in its impact on society. The lessons of Stalinism – not to mention other examples of nationalization – are too clear on this basic lesson of modern history.</p>
<p>Nevertheless, <em>nationalization of war industries</em> is the correct political slogan for socialists today. It is not put forward in the abstract, but could only become meaningful through mobilization of powerful class and social forces. It is not to be contrasted with Workers Control of Production; on the contrary, the latter supplements the former.</p>
<p>It was not possible at the conclusion of my last article on the Permanent War Economy to expand on the development and interrelationship of tactical political slogans. Nor was it necessary. The essential thought was contained in one sentence: <em>“Neither nationalization of war industries nor a capital levy are thinkable as realistic political slogans without the development of an independent labor party.”</em></p>
<p>In the political context of USA 1952, nationalization of war industries is the only economic slogan that corresponds to the objective needs of the political-social situation. The stretch-out in the “Defense Program” has dramatically revealed the weaknesses of the Permanent War Economy under capitalism. A process of atrophy, revealing an organic disease of the body economic, has set in. The ratio of war outlays to total production required to sustain the economy at full employment and high production levels is constantly under pressure of having to be increased. Immediately after World War II a 10 per cent ratio of war outlays sufficed to offset the natural tendencies of capitalism toward depression and crisis. After Korea, with its consequent acceleration in the accumulation of capital, a 15 per cent ratio of war outlays barely achieved a precarious equilibrium. Today it may well be that a 20 per cent ratio of war outlays (direct and indirect) to total output is needed to prevent a serious undermining of the economy.</p>
<p>On the economic front, war contracts become more and more desirable to the bourgeoisie. Production of the means of destruction. is now at least as important as production of the means of production in the capitalist process of production and accumulation of surplus values. And on the political front, the preparations for war against Stalinism dominate the international and American political scenes. Virtually every issue that arises is immediately related to the irrepressible conflict between Stalinist and American imperialisms, if indeed it does not arise out of this conflict.</p>
<p>One cannot imagine Eisenhower, Taft, Stevenson, Truman, or any spokesman for the Republican and Democratic parties favoring the nationalization of war industries. That would immediately generate fratricidal strife within the bourgeoisie. Nor, for that matter, can one readily picture Murray, Green or any other trade union defender of capitalism advocating taking the profit out of war through the nationalization of war industries. That would immediately lead to a split between organized labor and the capitalist political machines. The. trade union leaders would consider such action only if the ranks of organized labor make it unmistakably clear that they are for it.</p>
<p>An entire process of class struggle and education is therefore necessary before any but the most militant workers support the nationalization of war industries. In this struggle socialists must be in the forefront, for here in one, easily comprehensible slogan the evils and illnesses of capitalism are immediately laid bare. If the Permanent War Economy is to become our way of life indefinitely, as the leaders of the bourgeoisie openly state, then what is more logical than making the war industries serve the “interests” of all by making them the property of all? We do not have to belabor the advantages of the slogan, “nationalization of war industries” properly utilized.</p>
<p>Moreover, we may well be on the threshold of the long-heralded regroupment of American political forces. It is impossible indefinitely to maintain an archaic political set-up that no longer serves the needs of the ruling class and has long since lost any meaning for the mass of the population. The timid leaders of labor may well be immobilized by the shifting political forces. They may even be unaware that structural alterations are taking place in the body politic. But when they are, so to speak, “hit on the head” – as they must be in the course of the next few years – then they may awaken to the fact that the American political trend must either be in the direction of Bonapartism or independent labor political action. In such an objective situation (not “at any and all times”), the struggle to nationalize the war industries can play an important role in the political awakening of the American working class.</p>
<p>Socialists ought not to wait for the working class spontaneously to “desire to take this road (of nationalization of war industries).” They should and can lead the workers in a rapid and vast re-educational process. That is the real significance of putting forward the slogan “nationalization of war industries” <em>to-day</em>.</p>
<p class="author">T.N. Vance</p>
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Kenneth MacKenzie & T.N. Vance
An Exchange on Nationalisation
A Discussion of Government Ownership of War Industries
(March 1952)
From The New International, Vol. XVIII No. 2, March–April 1952, pp. 108–111.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
To the Editor:
Your publication continues to be one of the few things I read that consistently makes sense. It is only because I like you that I would venture a little disagreement.
T.N. Vance ends his brilliant series on the was economy with what seems to me too great an emphasis on the proposal – “Nationalize the War Industries.” He says this must now be the chief slogan of socialists, and gives it special place among the other transitional slogans as corresponding to the needs of the workers and the times. But how does it actually fit in with our other demands and our philosophy?
The paid thinkers of the rich like to equate socialism with any build-up in the authority of the state. But we have learned to our sorrow that the equation is false. The most nationalized state in existence is the least social, the least beneficial to man. There exists no economic law to guarantee that as economic power is taken from individual companies or combines of companies and put in the hands of a government, it thereby is any easier for the working class to control and apply to pro-human ends.
Many workers who now find it easier to deal with private employers would consider it is calamity for the government to operate all big industry.
If carried into effect, nationalization, unlike the other transitional demands, might not stimulate worker power as opposed to owner power. The sliding scale, though distorted by the employers, has raised a great issue and exposed the administration’s wage-price fakery. With the “books” once opened, things would never again be quite the same. Worker’s control, worker’s defense, these things build the confidence of the class and instruct and educate workers to take further responsibilities.
But putting all economic power in Washington, even under an administration of labor leaders, still leaves open the possibility of transition from a capitalist to a bureaucrat state. And compensation to former owners may eat up the economic benefits. So it seems to me that we should support nationalization if in time of crisis the American working class desires to take this road as have the English, Germans, etc., but not make it an unqualified fundamental issue at any and all times.
Sincerely yours,
Kenneth MacKenzie
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Reply by Vance
Kenneth MacKenzie is, of course, absolutely correct when he observes that nationalization in and of itself is not necessarily progressive – and may well be reactionary in its impact on society. The lessons of Stalinism – not to mention other examples of nationalization – are too clear on this basic lesson of modern history.
Nevertheless, nationalization of war industries is the correct political slogan for socialists today. It is not put forward in the abstract, but could only become meaningful through mobilization of powerful class and social forces. It is not to be contrasted with Workers Control of Production; on the contrary, the latter supplements the former.
It was not possible at the conclusion of my last article on the Permanent War Economy to expand on the development and interrelationship of tactical political slogans. Nor was it necessary. The essential thought was contained in one sentence: “Neither nationalization of war industries nor a capital levy are thinkable as realistic political slogans without the development of an independent labor party.”
In the political context of USA 1952, nationalization of war industries is the only economic slogan that corresponds to the objective needs of the political-social situation. The stretch-out in the “Defense Program” has dramatically revealed the weaknesses of the Permanent War Economy under capitalism. A process of atrophy, revealing an organic disease of the body economic, has set in. The ratio of war outlays to total production required to sustain the economy at full employment and high production levels is constantly under pressure of having to be increased. Immediately after World War II a 10 per cent ratio of war outlays sufficed to offset the natural tendencies of capitalism toward depression and crisis. After Korea, with its consequent acceleration in the accumulation of capital, a 15 per cent ratio of war outlays barely achieved a precarious equilibrium. Today it may well be that a 20 per cent ratio of war outlays (direct and indirect) to total output is needed to prevent a serious undermining of the economy.
On the economic front, war contracts become more and more desirable to the bourgeoisie. Production of the means of destruction. is now at least as important as production of the means of production in the capitalist process of production and accumulation of surplus values. And on the political front, the preparations for war against Stalinism dominate the international and American political scenes. Virtually every issue that arises is immediately related to the irrepressible conflict between Stalinist and American imperialisms, if indeed it does not arise out of this conflict.
One cannot imagine Eisenhower, Taft, Stevenson, Truman, or any spokesman for the Republican and Democratic parties favoring the nationalization of war industries. That would immediately generate fratricidal strife within the bourgeoisie. Nor, for that matter, can one readily picture Murray, Green or any other trade union defender of capitalism advocating taking the profit out of war through the nationalization of war industries. That would immediately lead to a split between organized labor and the capitalist political machines. The. trade union leaders would consider such action only if the ranks of organized labor make it unmistakably clear that they are for it.
An entire process of class struggle and education is therefore necessary before any but the most militant workers support the nationalization of war industries. In this struggle socialists must be in the forefront, for here in one, easily comprehensible slogan the evils and illnesses of capitalism are immediately laid bare. If the Permanent War Economy is to become our way of life indefinitely, as the leaders of the bourgeoisie openly state, then what is more logical than making the war industries serve the “interests” of all by making them the property of all? We do not have to belabor the advantages of the slogan, “nationalization of war industries” properly utilized.
Moreover, we may well be on the threshold of the long-heralded regroupment of American political forces. It is impossible indefinitely to maintain an archaic political set-up that no longer serves the needs of the ruling class and has long since lost any meaning for the mass of the population. The timid leaders of labor may well be immobilized by the shifting political forces. They may even be unaware that structural alterations are taking place in the body politic. But when they are, so to speak, “hit on the head” – as they must be in the course of the next few years – then they may awaken to the fact that the American political trend must either be in the direction of Bonapartism or independent labor political action. In such an objective situation (not “at any and all times”), the struggle to nationalize the war industries can play an important role in the political awakening of the American working class.
Socialists ought not to wait for the working class spontaneously to “desire to take this road (of nationalization of war industries).” They should and can lead the workers in a rapid and vast re-educational process. That is the real significance of putting forward the slogan “nationalization of war industries” to-day.
T.N. Vance
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<h2>T.N. Vance</h2>
<h1>The Permanent War Economy</h1>
<h3>(1951)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>New International</strong>, Vol. XVII Nos. 1–6, 1951.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="link"><big><a href="part1.htm">Part I – Its Basic Characteristics</a><br>
<br>
<a href="part2.htm">Part II – Declining Standards of Living</a><br>
<br>
<a href="part3.htm">Part III – Increasing State Intervention</a><br>
<br>
<a href="part4.htm">Part IV – Military-Economic Imperialism</a><br>
<br>
<a href="part5.htm">Part V – Some Significant Trends</a><br>
<br>
<a href="part6.htm">Part VI – Taxation and Class Struggle</a></big></p>
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T.N. Vance
The Permanent War Economy
(1951)
From New International, Vol. XVII Nos. 1–6, 1951.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Part I – Its Basic Characteristics
Part II – Declining Standards of Living
Part III – Increasing State Intervention
Part IV – Military-Economic Imperialism
Part V – Some Significant Trends
Part VI – Taxation and Class Struggle
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<h2>Frank Demby</h2>
<h1>And the Price of Food Will Go Up!</h1>
<h3>(August 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_33" target="new">Vol. 5 No. 33</a>, 18 August 1941, pp. 2 & 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">The first witness to testify before the House Banking and Currency Committee concerning the Price Control Bill was Leon Henderson, administrator of the Office of Price Administration and Civilian Supply. When Mr. Henderson got to the question of agricultural prices, he was questioned about the reason for the bill containing the provision that the ceiling on farm prices be 110 per cent of parity instead of the Administration’s long-sought goal of 100 per cent of parity.</p>
<p>While Mr. Henderson hesitated and looked toward Chairman Steagall, who took credit for this change in a press interview. Representative Ford of California interrupted: “I answer – votes.” Never was a truer word spoken by a congressman. All the legislation in regard to the economic controls to be established under the war economy has been subject to an old-fashioned log-rolling process. But the provision for 110 per cent of parity on farm prices represents one of the greatest triumphs the congressional farm bloc has ever scored in long years of pressure politics and, by the same token, a tremendous blow at the standard of living of the vast majority of the working population of this country.<br>
</p>
<h4>The Background</h4>
<p class="fst">To understand what is involved, we must first briefly consider the meaning of “parity” and the situation of the farm population, particularly as affected by World War II. Parity, according to the dictionary, means equality. The word first came into prominence during the 1920s when farm lobbyists and farmers’ organizations, especially the Farm Bureau, an organization representing the more well-to-do commercial farmers, used it to describe their goal for farm recovery.</p>
<p>The farmers of the United States, for a series of historical reasons, had entered into an era of permanent depression following World War I. The Armistice of 1918 left them with terrific surpluses on hand, particularly in the staple crops, wheat and cotton. The colonial areas of the world – Canada, Argentina, Australia, Brazil, India, Egypt – had greatly increased their production of these commodities under the stimulus of war-time demand. Cheaper production in these new territories and imperialist trade rivalries meant the steady loss of foreign markets for the American farmer. <em>While more clothing, bread and other necessities which are made from farm products could easily be used by the American population, this is not possible under capitalism to any great extent. For capitalism means an economy of scarcity and insufficient purchasing power in the hands of the vast majority who produce the wealth of this country – the workers.</em></p>
<p>Consequently, the prices of farm products began to decline. Meanwhile, the prices of industrial products (the things the farmer must buy) either remained high or went higher. As a result, the purchasing power of the farmer’s dollar went down steadily. The farmers wanted more purchasing power; that is, <em>they wanted higher prices for farm commodities in relation to the prices of industrial products which they had to buy</em>. They said they wanted equality between farm prices and industrial prices. Hence, the slogan of “parity.” But – and here is the vital question – what period should be selected as an example of parity, of the proper relationship between farm and industrial prices? The farm organizations examined the government’s statistics and selected the period from 1909–1914 as “normal” for the relationship between farm and industrial prices.<br>
</p>
<h4>“Normal” or “Abnormal”?</h4>
<p class="fst">What is meant by “normal” is always, of course, a difficult question to answer. The fact of the matter is, however, as any examination of price statistics will show, that the period from 1909–1914 represents the highest possible parity base which could be selected in the 20th century. It is distinctly an abnormal period, if by “normal” we mean what is most usual or typical. The period from 1909–1914 represents an extremely prosperous period for farmers. This applies, to be sure, only to the capitalist farmers; <em>but the whole discussion of parity prices is only concerned with the relatively well-to-do capitalist farmers, representing at the most some 35 per cent of the farm population who produce 89 per cent of the total value of all farm crops which are marketed. The majority of the farmers who live in real poverty and distress, the tenant farmers, share-croppers and agricultural laborers, are certainly not the concern of the congressional farm bloc, for parity cannot help them. Only a fundamental change in the economic system and a redistribution of the land can improve the status of these truly forgotten people of America.</em></p>
<p>The first attempts to achieve parity under Coolidge and Hoover were miserable failures. They are important only as confirmation of the necessity for government intervention in solving the problems created by a declining capitalist order. The onset of the great depression of 1929 only made matters worse tor the farmers.</p>
<p>In 1933 came the New Deal, promising all things to all men. Recognizing the strategic situation of the farm bloc in Congress and the great voting strength of the farm states, the New Deal political strategists promised parity to the farmers. Their first effort, the Agricultural Adjustment Act of 1933, was a colossal blunder and a crime against humanity. <em>They tried to raise the prices of farm products by ordering the farmers to plow under every third row of cotton and wheat – at a time when millions were going ragged for want of clothing and starving for want of food.</em> The slight increase in farm prices which followed was largely due to the subsequent droughts.</p>
<p>The only important result of this first New Deal attempt to solve the farm problem was to strengthen the farm bloc in Congress. The farm bloc was now in the position of being able to blackmail the Roosevelt Administration on any important measure that it wanted to pass. Time after time, the farm bloc, in return for votes supporting the general Roosevelt program, received important concessions in the form of desired subsidies to the CAPITALIST farmers. It has been horse trading on a grand scale.<br>
</p>
<h4>World War II</h4>
<p class="fst">The failure of the Roosevelt farm program was emphasized by the election of 1936, which showed the farm belt clearly swinging away from the Democratic Party back to its traditional Republican allegiance. This called for heroic measures, and finally resulted in the passage of the AAA of 1938, which incorporates the goal of parity into existing legislation. Nobody quite knew how this goal was to be achieved, but the act, sometimes referred to as the Omnibus Act, contained every possible scheme that capitalist politicians could think of. It was rapidly being demonstrated a failure, in spite of the addition of the Food Stamp Plan, when, in September 1939, World War II broke out.</p>
<p><em>The immediate effect of World War II on the farmers was the reverse of World War I. In World War I, when Europe turned its fields into human slaughter houses, the Allies bought huge quantities of farm products in the U.S. This time, however, the newly developed colonial areas of the world could more than supply the needs of England and France. Moreover, the Allies, particularly the English, found it necessary to conserve their cash for the purchase of American munitions and planes. England actually reduced its normal purchases of cotton and tobacco from the U.S. As a consequence, the government warehouses have accumulated huge surpluses of the staple crops. The situation has been farther aggravated by the so-called “Hemisphere Defense Policy.” In the long run, this means that American imperialism will import agricultural raw materials from Latin America (products like wheat, cotton, meat, hides and copper, which, far the most part, compete directly with the American farmer) in return for its exports of capital and industrial commodities.</em></p>
<p>The pressure from the farm states to relieve the situation grew tremendously. Every step of the Roosevelt war program, in order to pass Congress, has had to be accompanied by concessions to the farm bloc. Meanwhile, the expenditure of billions of dollars for war by the government has had an inflationary effect on all prices, particularly farm prices. Mr. Henderson, in his testimony, stated the following percentage relationship of farm prices to parity as of July 15: rice 102, cottonseed 120, butter fat 112, milk equivalent 102, chickens 111, eggs 100, hogs 106, beef cattle 127, veal calves 114, lamb 117, Maryland tobacco 188, wool 149, corn 81, wheat 73, oats 62, and cotton 87. THE WHOLESALE COMMODITY INDEX OF THE BUREAU OF LABOR STATISTICS SHOWS THAT FOOD PRICES ARE RISING EVEN FASTER THAN THE GENERAL LEVEL OF PRICES – WHOLESALE FOOD PRICES HAVING RISEN ABOUT 60 PER CENT SINCE THE OUTBREAK OF WORLD WAR II.<br>
</p>
<h4>Price Control Bill</h4>
<p class="fst">Under the terms of the Price Control Bill, as introduced in the House of Representatives, agricultural prices will have a ceiling 110 per cent of parity – that is, 10 per cent more than the farm propagandists ever dared to demand. From the figures quoted by Mr. Henderson, it will mean a tremendous increase in the price of most of the important food and clothing items in the worker’s budget. Moreover, those prices which are above parity as of July 29 will have this higher level maintained as an alternative price ceiling. The price of meats, for example, will remain at the present extremely high levels. <em>On the average, therefore, the workers are confronted with a bill whose avowed purpose is to prevent higher prices and inflation, but which will guarantee a 20 PER CENT INCREASE IN PRICES. Moreover, it is only the wealthy farmers and big middlemen who will benefit from this handout at the expense of the workers and the poor farmers. All of which only serves to emphasize once again the extreme injustices of the capitalist economic system, particularly in wartime, and the absolute necessity for workers’ control of price-fixing.</em></p>
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Frank Demby
And the Price of Food Will Go Up!
(August 1941)
From Labor Action, Vol. 5 No. 33, 18 August 1941, pp. 2 & 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The first witness to testify before the House Banking and Currency Committee concerning the Price Control Bill was Leon Henderson, administrator of the Office of Price Administration and Civilian Supply. When Mr. Henderson got to the question of agricultural prices, he was questioned about the reason for the bill containing the provision that the ceiling on farm prices be 110 per cent of parity instead of the Administration’s long-sought goal of 100 per cent of parity.
While Mr. Henderson hesitated and looked toward Chairman Steagall, who took credit for this change in a press interview. Representative Ford of California interrupted: “I answer – votes.” Never was a truer word spoken by a congressman. All the legislation in regard to the economic controls to be established under the war economy has been subject to an old-fashioned log-rolling process. But the provision for 110 per cent of parity on farm prices represents one of the greatest triumphs the congressional farm bloc has ever scored in long years of pressure politics and, by the same token, a tremendous blow at the standard of living of the vast majority of the working population of this country.
The Background
To understand what is involved, we must first briefly consider the meaning of “parity” and the situation of the farm population, particularly as affected by World War II. Parity, according to the dictionary, means equality. The word first came into prominence during the 1920s when farm lobbyists and farmers’ organizations, especially the Farm Bureau, an organization representing the more well-to-do commercial farmers, used it to describe their goal for farm recovery.
The farmers of the United States, for a series of historical reasons, had entered into an era of permanent depression following World War I. The Armistice of 1918 left them with terrific surpluses on hand, particularly in the staple crops, wheat and cotton. The colonial areas of the world – Canada, Argentina, Australia, Brazil, India, Egypt – had greatly increased their production of these commodities under the stimulus of war-time demand. Cheaper production in these new territories and imperialist trade rivalries meant the steady loss of foreign markets for the American farmer. While more clothing, bread and other necessities which are made from farm products could easily be used by the American population, this is not possible under capitalism to any great extent. For capitalism means an economy of scarcity and insufficient purchasing power in the hands of the vast majority who produce the wealth of this country – the workers.
Consequently, the prices of farm products began to decline. Meanwhile, the prices of industrial products (the things the farmer must buy) either remained high or went higher. As a result, the purchasing power of the farmer’s dollar went down steadily. The farmers wanted more purchasing power; that is, they wanted higher prices for farm commodities in relation to the prices of industrial products which they had to buy. They said they wanted equality between farm prices and industrial prices. Hence, the slogan of “parity.” But – and here is the vital question – what period should be selected as an example of parity, of the proper relationship between farm and industrial prices? The farm organizations examined the government’s statistics and selected the period from 1909–1914 as “normal” for the relationship between farm and industrial prices.
“Normal” or “Abnormal”?
What is meant by “normal” is always, of course, a difficult question to answer. The fact of the matter is, however, as any examination of price statistics will show, that the period from 1909–1914 represents the highest possible parity base which could be selected in the 20th century. It is distinctly an abnormal period, if by “normal” we mean what is most usual or typical. The period from 1909–1914 represents an extremely prosperous period for farmers. This applies, to be sure, only to the capitalist farmers; but the whole discussion of parity prices is only concerned with the relatively well-to-do capitalist farmers, representing at the most some 35 per cent of the farm population who produce 89 per cent of the total value of all farm crops which are marketed. The majority of the farmers who live in real poverty and distress, the tenant farmers, share-croppers and agricultural laborers, are certainly not the concern of the congressional farm bloc, for parity cannot help them. Only a fundamental change in the economic system and a redistribution of the land can improve the status of these truly forgotten people of America.
The first attempts to achieve parity under Coolidge and Hoover were miserable failures. They are important only as confirmation of the necessity for government intervention in solving the problems created by a declining capitalist order. The onset of the great depression of 1929 only made matters worse tor the farmers.
In 1933 came the New Deal, promising all things to all men. Recognizing the strategic situation of the farm bloc in Congress and the great voting strength of the farm states, the New Deal political strategists promised parity to the farmers. Their first effort, the Agricultural Adjustment Act of 1933, was a colossal blunder and a crime against humanity. They tried to raise the prices of farm products by ordering the farmers to plow under every third row of cotton and wheat – at a time when millions were going ragged for want of clothing and starving for want of food. The slight increase in farm prices which followed was largely due to the subsequent droughts.
The only important result of this first New Deal attempt to solve the farm problem was to strengthen the farm bloc in Congress. The farm bloc was now in the position of being able to blackmail the Roosevelt Administration on any important measure that it wanted to pass. Time after time, the farm bloc, in return for votes supporting the general Roosevelt program, received important concessions in the form of desired subsidies to the CAPITALIST farmers. It has been horse trading on a grand scale.
World War II
The failure of the Roosevelt farm program was emphasized by the election of 1936, which showed the farm belt clearly swinging away from the Democratic Party back to its traditional Republican allegiance. This called for heroic measures, and finally resulted in the passage of the AAA of 1938, which incorporates the goal of parity into existing legislation. Nobody quite knew how this goal was to be achieved, but the act, sometimes referred to as the Omnibus Act, contained every possible scheme that capitalist politicians could think of. It was rapidly being demonstrated a failure, in spite of the addition of the Food Stamp Plan, when, in September 1939, World War II broke out.
The immediate effect of World War II on the farmers was the reverse of World War I. In World War I, when Europe turned its fields into human slaughter houses, the Allies bought huge quantities of farm products in the U.S. This time, however, the newly developed colonial areas of the world could more than supply the needs of England and France. Moreover, the Allies, particularly the English, found it necessary to conserve their cash for the purchase of American munitions and planes. England actually reduced its normal purchases of cotton and tobacco from the U.S. As a consequence, the government warehouses have accumulated huge surpluses of the staple crops. The situation has been farther aggravated by the so-called “Hemisphere Defense Policy.” In the long run, this means that American imperialism will import agricultural raw materials from Latin America (products like wheat, cotton, meat, hides and copper, which, far the most part, compete directly with the American farmer) in return for its exports of capital and industrial commodities.
The pressure from the farm states to relieve the situation grew tremendously. Every step of the Roosevelt war program, in order to pass Congress, has had to be accompanied by concessions to the farm bloc. Meanwhile, the expenditure of billions of dollars for war by the government has had an inflationary effect on all prices, particularly farm prices. Mr. Henderson, in his testimony, stated the following percentage relationship of farm prices to parity as of July 15: rice 102, cottonseed 120, butter fat 112, milk equivalent 102, chickens 111, eggs 100, hogs 106, beef cattle 127, veal calves 114, lamb 117, Maryland tobacco 188, wool 149, corn 81, wheat 73, oats 62, and cotton 87. THE WHOLESALE COMMODITY INDEX OF THE BUREAU OF LABOR STATISTICS SHOWS THAT FOOD PRICES ARE RISING EVEN FASTER THAN THE GENERAL LEVEL OF PRICES – WHOLESALE FOOD PRICES HAVING RISEN ABOUT 60 PER CENT SINCE THE OUTBREAK OF WORLD WAR II.
Price Control Bill
Under the terms of the Price Control Bill, as introduced in the House of Representatives, agricultural prices will have a ceiling 110 per cent of parity – that is, 10 per cent more than the farm propagandists ever dared to demand. From the figures quoted by Mr. Henderson, it will mean a tremendous increase in the price of most of the important food and clothing items in the worker’s budget. Moreover, those prices which are above parity as of July 29 will have this higher level maintained as an alternative price ceiling. The price of meats, for example, will remain at the present extremely high levels. On the average, therefore, the workers are confronted with a bill whose avowed purpose is to prevent higher prices and inflation, but which will guarantee a 20 PER CENT INCREASE IN PRICES. Moreover, it is only the wealthy farmers and big middlemen who will benefit from this handout at the expense of the workers and the poor farmers. All of which only serves to emphasize once again the extreme injustices of the capitalist economic system, particularly in wartime, and the absolute necessity for workers’ control of price-fixing.
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<h2>T.N. Vance</h2>
<h1>After Korea – What?</h1>
<h4>An Economic Interpretation of US Perspectives</h4>
<h3>(November 1950)</h3>
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<p class="info">T.N. Vance, <em>After Korea – What?</em>, <strong>New International</strong>, November-December 1950, pp.323-333.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">While the outcome of the Korean war remains obscure at this writing, <em>immediate</em> outbreak of World War III is most unlikely. Even if the major antagonists find it impossible to reach a mutually satisfactory compromise, they are unprepared for global combat. The motives that prompted Stalinist imperialism to launch the attack against South Korea on June 25, as well as the motives that led American imperialism promptly to intervene, are well known and require no further analysis here. Nor need we be particularly concerned with the resolution of the many complex political, social and economic problems arising from the liquidation of the Korean war, as these have no real <em>strategic</em> significance in the titanic struggle now being waged between bureaucratic collectivism (Stalinist imperialism) and capitalism (American imperialism) for control of the entire world.</p>
<p>It is worth noting, in passing, that the <em>political vacuum</em> which existed in Korea and which was in a sense responsible for the war will remain. For the war has graphically revealed that an independent political force in Korea can never be powerful enough to achieve sovereignty. A Third Camp is not and cannot exist on any consequential scale in that unfortunate Land of the Morning Calm. Like other border areas incapable of independent existence, Korea is faced with the unhappy choice of a regime propped up by American bayonets or one controlled by the Stalinist secret police.</p>
<p>What is important, however, for the world as a whole and for the orientation of the independent socialist movement in particular, is the perspectives that flow for the rival imperialisms once hostilities cease in Korea: Is the world to become two armed camps, waiting fearfully for the inexorable outbreak of World War III, or is some type of peace possible? Can the strategic aims of Stalinist and American imperialisms be modified in any significant degree? In a word, will the environment in which the class struggle operates differ in any noteworthy features from that which existed prior to the Korean war? And, if so, what will the consequences be and how can any such new trends be expected to manifest themselves? These are obviously crucial questions for the independent socialist movement and we shall seek to answer them in this and later articles.</p>
<p>The spectacle of grown men mouthing meaningless words about peace is one with which we have become all too familiar in recent years. It has become even less edifying, if that is possible, as a result of the “peace” programs set forth by Acheson and Vishinsky amid the nauseating maneuvers of the rival imperialist blocs within the United Nations. Acheson has made it plain that the only program Washington has is to arm to the hilt. Then, when parity of armed forces is achieved, “we can negotiate with the Russians.” And this is called a policy, expressed by a “responsible statesman” occupying the lofty position of Secretary of State!</p>
<p>To such a policy even a Vishinsky can reply with telling effect (<strong>The New York Times</strong>, October 14): “Authoritative American spokesmen say that it is only force that can impress the Soviet Union, and that when the United States is so strong as to make the Soviet Union shake in its shoes then, and only then, will it be possible to reach some understanding. What a profound and crude mistake! ... This is the policy of the diktat, the policy of pressure and imposition, the policy of demands and half-demands, repeatedly presented, pressed, bolstered and backed up by force, a proliferation of military measures, and circles of naval, land and air bases ...”</p>
<p>In the course of the same speech, Stalin’s Foreign Minister indicated the equally bankrupt “peace” policy of Stalinist imperialism. After complaining that “The policy (of American imperialism) has been changed ... from the wartime period of cooperation ... to the post-war ... tough policy,” Vishinsky asks, “Why do you not get back to that situation (of wartime cooperation)? If you do, things might change. I am profoundly convinced that things would change. To this thinly disguised offer of a deal; American imperialism has repeatedly given its answer: “The Soviet Government cannot be trusted to keep its word.”</p>
<p>Mutual recriminations about who changed which policy first only serve to conceal the basic dilemma, which explains why neither Stalinist nor American imperialism can “trust the other.” The wartime alliance between Anglo-American and Stalinist imperialisms was brought about <em>solely</em> due to the <em>superior threat</em> posed by an aggressive German imperialism under Hitler. In the absence of any such threat, it is impossible for the imperialist expressions of capitalism and bureaucratic collectivism to arrive at any lasting agreement that would permit a peaceful solution of the world’s problems.</p>
<p>The conflict between bureaucratic collectivism and capitalism is irrepressible. No matter what pious statements about peaceful coexistence of the two systems are issued by Moscow and Washington, they cannot disguise the fundamental antagonisms that make inevitable a clash for world supremacy. We are long accustomed to the periodic quotations from Stalin, as the occasion demands, about the “peaceful intentions of the USSR,” and (buttressed by falsified quotations from Lenin) the “possibility of peace between socialism and capitalism.”</p>
<p>Now we are treated to a similar disingenuous spectacle by the State Department, over which the same Acheson presides. A popular pamphlet entitled <strong>Our Foreign Policy</strong> has recently been issued. According to <strong>The New York Times</strong> of September 30, the volume constitutes a bitter indictment of Soviet policy, but it also sets out to disprove the “view that the East-West split is one between communism and capitalism.” In other words, The State Department also set out to correct what it regarded as an incorrect impression of the present tension of the world. It is not a question of differing economic systems, said the booklet, but of the <em>threat of a new imperialist power</em>.</p>
<p class="quoteb">“The deepening division between the Soviet-dominated bloc and the free world is not, as some people wrongly think, a conflict between capitalism and communism”, it said. “Among the nations of the free world, in fact, you will find some that are <em>not capitalist at all</em>, but have <em>freely chosen a socialist system</em>.</p>
<p class="quote">“The conflict is really <em>between a power-hungry government that is bent on spreading its power by force, terror</em> and every other means <em>and the community of free nations which refuses to be conquered or dominated, or to stand by and see its members swallowed up</em>.” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Thus, the State Department, like Vishinsky, would have us believe that all that is involved is a question of <em>methods.</em> That is to say, if Stalinism would relinquish its tactics of force, subversion and violence then we could have a peaceful world. It is axiomatic that methods flow from the socio-economic structure of a given state, but even if Stalinism employed “democratic” methods acceptable to Washington, American imperialism would still refuse “to stand by and see its members swallowed up.” Moreover, by this time it should be ABC, even to the State Department, that what really makes “the threat of a new imperialist power” is the existence of a new ruling class exploiting society in a new manner; namely, the social system known as bureaucratic collectivism. To be sure, this system is the antithesis of socialism and was actually brought to power by a counter-revolution that destroyed the workers state established by the Bolshevik Revolution.</p>
<p>Nevertheless, it is the irreconcilable antagonisms between two economic systems that have given rise to the “East-West conflict” and which threaten to lead us to World War III within the next decade. Both Moscow and Washington, at bottom, know this, although from time to time each has politically expedient reasons for issuing propaganda, designed to convey a different impression. And each has its own reasons for preparing <em>in its own way</em> for the inevitable showdown.</p>
<p>Stalinist imperialism, to which bureaucratic collectivism has given rise, is a system of slavery and peonage based on nationalized property. It is essentially an “import” imperialism whose aggressive policy is based on the economic necessity of acquiring constantly new sources of labor power; both skilled and slave, and of adding to its stock of producer and consumers goods, and which can feel safe politically only when it has integrated the major centers of world population and production into the system of bureaucratic collectivism. The Stalinist empire, as the same booklet of the State Department points out, has already enhanced its domain since the end of World War II by some 7,500,000 square miles of territory and by some 500,000,000 more people.</p>
<p>American imperialism, on the other hand is by far the most powerful imperialism to which finance capitalism has given birth. It is an “export” imperialism, inexorably driven by the most rapid accumulation of capital in the history of capitalism to export capital in all its forms in ever-increasing quantities. It is easy-going and bloated but it cannot be indifferent to the huge bites that Stalinism has taken out of the world market. It must first contain Stalinist imperialism and then destroy it.</p>
<p>In retrospect it is clear to American imperialism that it made many mistakes during the war, although the menace of German and Japanese imperialisms was immediate and real, while the danger of Stalinist imperialism was remote and at best imperfectly understood. To some extent these “mistakes” were unavoidable, for history rarely permits capitalism to function in terms of the long-run interests of the international bourgeoisie. What disturbs Washington, however, is the <em>postwar</em> mistake of permitting Stalin such an overwhelming head-start in the armaments race, for the curve of munitions production requires years before it generates real momentum. Indeed, it was not until 1944, despite the destruction wrought by Allied bombing, that American war production exceeded that of Nazi Germany. This lesson is well known in Washington and amounts for the unanimity that greeted the launching of the “national defense” program.</p>
<p>In this connection, the series of articles in <strong>The New York Times</strong> by its Moscow correspondent, Harrison E. Salisbury, is most interesting. Having just returned from a vacation in the United States, Salisbury has found Stalinland to be one of peace and growing prosperity. “The atmosphere of Moscow, and of the part of Russia that I crossed in traveling here from Poland,” he says, “is not one of war nor of preparation for war.” He concludes his dispatch of October 13 by stating: “What is interesting about the Soviet situation is that as of today, so far as research can determine, there has been no substantial changeover of the economy from its predominantly peacetime aspect to one of preparation for, or anticipation of, war.”</p>
<p>We do not wish to impugn Mr. Salisbury’s research abilities, or even the facilities made available to him in conducting his research, but the timing of the articles invites the suspicion that they were inspired by more than reportorial zeal and the conclusion is demonstrably false. The facts have nothing to do with atmosphere, which may well be as reported, but if Moscow today has a “predominantly peacetime aspect” it can only be because the <em>normal</em> face of Stalinism is one of a Permanent War Economy. The maintenance of 300 divisions, even it all are not at full wartime strength, the arming of the satellites, the military-technological development of strategic roads, canals, railroads, airports and other means of communication and transportation within the satellite countries, the expansion of the Soviet Navy, especially the submarine fleet, the feverish development of uranium mines, etc., etc., are an indisputable evidence of a war economy.</p>
<p>Since statistics are a “class science” in Stalinland, we cannot say what the precise percentage of the national product spent for war purposes is, but at a guess we would place it in the neighborhood of 25 per cent. Since during the last war only about 50 per cent of the national product was devoted by the Soviet Government to direct war outlays, such a reduction coupled with the fruits of imperialist acquisition and increasing production could well result in some improvement in civilian standards of living. The important point is that for Stalinism the shift from “peace” to “war” is only quantitative, not qualitative, and can be accomplished without upsetting normal routines, either politically or economically.</p>
<p>Moreover, while the ultimate aim of Stalinist imperialist strategy is conquest of the entire world, the immediate aims are clearly more limited. Time, the Kremlin feels, is on its side. It must complete the process of integrating the economics of existing satellites into its own. It needs another five-year plan or perhaps two, to increase its production and military potential to the desired level of overwhelming superiority, not to mention atomic equality. It must overthrow Tito and eliminate Titoism, in which objective it may have been mightily aided by the recent drought in Yugoslavia that, at last report, has destroyed some 4,000,000 tons of foodstuffs. Then must come the closing of the pincers on India and, choicest morsel of all, acquisition of all of Germany.</p>
<p>The air of confidence and tranquillity with which Stalinist spokesmen face the future is therefore much more than a mere propaganda “trick,” a so-called “peace offensive” to lull the decadent democracies into lowering their armed guard so that they will be an easy prey for a sudden onslaught. Stalin would welcome a deal with American imperialism, provided that it did not materially weaken his chances of obtaining control of the entire vast Eurasian heartland, for this is the realistic strategic objective of Stalinist imperialism in the next decade. The Stalinist ruling class has everything to gain by postponing the final battle with American imperialism, or so it reasons.</p>
<p>Two aspects of current American imperialist policy are most noteworthy. Internally, there is minimal unanimity within the American bourgeoisie regarding the fundamentals of imperialist strategy. The Truman policy of containment of Stalinist imperialism, which is the essential meaning of all major steps in foreign policy in recent years, may be criticized as to the manner in which it has been carried out but it is rare indeed that anyone seeks to change the objective or, the major strategy adopted to achieve this basic purpose. This is reflected in domestic politics by the extreme weakness of the isolationist fringe, an obvious but nonetheless significant difference from the post-World War I situation. It is apparent that all major tendencies within American imperialism are clearly aware that it would be fatal to permit Stalinist imperialism to control all of Europe and Asia, from the Atlantic to the Pacific and Indian oceans, for if Stalinist imperialism controlled three-fourths of the world’s population an insoluble political problem is presented even if in the long run a military victory under such adverse conditions may still be possible.</p>
<p>Externally, despite the establishment of the so-called Stettin-Trieste line and the attempts to establish a comparable demarcation line in Asia, American imperialism has clearly been on the defensive. It is Stalinist imperialism that selects the area and methods of struggle and American imperialism that replies with a thoroughly improvised policy. Because these <em>tactical</em> methods are either generally unsuccessful or incapable of achieving any lasting victory, which is more or less inevitable in view of American imperialism’s inability to solve any conflict on other than military terms, there is dissatisfaction with and criticism of specific tactics. This tactical opposition has combined with mounting economic pressures to establish the policy of containing Stalinist imperialism through the mobilization of superior armed force. From parity, which will be impossible to measure, to superiority of armed forces, which may not be easy to achieve, to World War III, which may be difficult to win, is the road on which American imperialism has definitely embarked.</p>
<p>Korea exploded the fallacy that American imperialism could contain Stalinist imperialism through speeches and a business-as-usual (i.e., a defensive) policy. For a brief flurry it almost gave rise to its diametric opposite, the policy of the direct offensive which meant seeking immediately a purely military victory over Stalinist imperialism. This, in essence, is the position of the advocates of a “preventive” war and all variations thereof. We do not for one moment exclude the possibility that American imperialism can defeat Stalinist imperialism in an all-out war, featured especially by use of the atomic bomb, but <em>such a military victory would be politically disastrous</em>. It is most unlikely, moreover, that the struggle would be short or easy. On the contrary, all available evidence points to a protracted war between two fairly evenly matched antagonists. The consequent economic destruction and totalitarianization of American political life, without even considering the impact on the rest of the world, would make any military victor; absolutely worthless. Such a policy then can be only a last resort, to be embraced <em>only if there is no other hope for survival of the American capitalist class</em>.</p>
<p>Faced with the failure of the previous “defensive” policy and the impossibility of adopting an overwhelmingly “aggressive” policy, the American bourgeoisie has finally reached a policy that in political terms can best be described as “Neither Peace nor War”. And is literally true that they do not want peace and cannot afford war with Stalinism! To be sure, American imperialism cannot mobilize the support of the international proletariat, as Trotsky hoped to do when he advanced the identical slogan on the occasion of the Brest Litovsk discussions, but it can hope to mobilise what is left of the international bourgeoisie.</p>
<p>The policy of “Neither Peace Nor War” will gain time, unless of course Stalinist imperialism reacts by casting the die for immediate war. This is most unlikely for reasons cited earlier. Naturally, if war does take place within the next few years, then the present breathing spell will have been utilized to overcome the Stalinist headstart in armaments production, or at least to reduce the present disparity, thereby enhancing the prospects of American imperialism for military victory. Above all, allies will be sought and armed in all areas of the world not under the control of Stalinist imperialism. This is, of course, the real meaning of the Atlantic Pact and related policies. The process of reducing British, French and other Western European imperialisms to the position of satellites dependent upon military and economic aid from the United States is a complicated one and takes time. It takes even more time to revive and harness the military power of defeated German and Japanese imperialisms. American imperialism would also like to have the time to conquer the markets of the disintegrating British Empire and to solve a series of other economic problems arising out of the pressure of the most rapid accumulation of capital in the history of the world.</p>
<p>This ambivalent policy is not without its dangers, but there is no alternative for American imperialism. It even contains the hope that the death of Stalin may precipitate a struggle for succession that will greatly weaken or even destroy Stalinist imperialism. Mr Hoffman of ECA fame is fond of speculating on such a turn of events, and it is said that this is one of the reasons he opposed the militarization of the Marshall Plan which presumably led to his resignation.</p>
<p>No better illustration of the significance of the new policy can be found than in what has happened to the Marshall Plan. Although in the interests of American imperialism, and part of the policy of Stalinist containment, it did nevertheless eschew military policies and it had make some progress toward improving standards of living in Western Europe and achieving a more rational and integrated economy. Now all this has been abandoned under the impact of the mobilization program. As <strong>The New York Times</strong> correspondent, Michael L. Hoffman, expresses it in his dispatch published on October 13 “Time and again in the past few weeks this correspondent has heard. European economic officials of various nationalities say with an actual or figurative shrug of the shoulders that <em>as the United States seemed to have lost interest in everything except rearmament each country had better start looking out after itself in economic matters</em>.” (My italics – <em>T.N.V</em>.) In fact, the article was headlined “Europe’s economy edges to autarchy.”</p>
<p>The political reception that the new American policy has received in Europe and Asia, especially Asia, is anything but favorable. But it is its economic causes and effects that are the key to the shape of the world after the end of the Korean war.</p>
<p>The immediate origin of the economic pressures that have pushed American imperialism into its new course, which is without historical precedent for a democratic capitalist nation, lies in the phenomenal expansion of the productive forces during World War II and the virtual maintenance of this level of production <em>during the last five years</em>. This development has not only been contrary to the expectations of the bourgeoisie but also, let us admit, unexpected by most Marxists. Here our analysis will be helped by making reference to some statistical measures, even if they are considered as but crude approximations.</p>
<p>We start with the fact that production increased about 12 per cent a year during World War II, from 1939 to 1945. In other words, total output was some 72 per cent higher when the war ended than when it began. This can be seen by examining the figures for national income and national product of the Department of Commerce as published in the <strong>Survey of Current Business</strong> (the latest revisions are contained in the issue of July 1950).</p>
<table align="center" cellpadding="4" cellspacing="4">
<tbody>
<tr>
<td colspan="5">
<p class="smc"><strong>WARTIME GROWTH OF OUTPUT</strong><br>
(Millions of Dollars)</p>
</td>
</tr>
<tr>
<td>
<p class="smc"> </p>
</td>
<td valign="bottom">
<p class="smc"><em>1939</em></p>
</td>
<td valign="bottom">
<p class="smc"><em>1945</em></p>
</td>
<td>
<p class="smc"><em>% Increase<br>
Current<br>
Dollars</em></p>
</td>
<td>
<p class="smc"><em>% Increase<br>
Constant<br>
Dollars</em>*</p>
</td>
</tr>
<tr>
<th>
<p class="sm1">National Income</p>
</th>
<td>
<p class="smc">$72,532</p>
</td>
<td>
<p class="smc">$182,621</p>
</td>
<td>
<p class="smc">152%</p>
</td>
<td>
<p class="smc">84%</p>
</td>
</tr>
<tr>
<th>
<p class="sm1">Net National Product</p>
</th>
<td>
<p class="smc">$83,238</p>
</td>
<td>
<p class="smc">$202,800</p>
</td>
<td>
<p class="smc">144%</p>
</td>
<td>
<p class="smc">78%</p>
</td>
</tr>
<tr>
<th>
<p class="sm1">Gross National Product</p>
</th>
<td>
<p class="smc">$91,339</p>
</td>
<td>
<p class="smc">$215,210</p>
</td>
<td>
<p class="smc">136%</p>
</td>
<td>
<p class="smc">72%</p>
</td>
</tr>
<tr>
<td colspan="5">
<p class="smc">* Calculated by deflating the 1945 current dollar figures by the rise in the BLS<br>
wholesale price index, which rose from 77.1 in 1939 to 106.3 In 1945 – a rise of<br>
37.2 per cent yielding a deflator of 27.1 per cent.</p>
</td>
</tr>
</tbody>
</table>
<p class="fst">National income and product figures are, of course, estimates, but they are the only dollar figures that attempt to portray the productive performance of the economy. Without entering into current controversies among the national income specialists, and, granting that important conceptual and statistical problems are involved, we are concerned only with basic trends which are not altered even if the margin of error in the figures is sizable. Fundamentally, gross national product is larger than net national product by the inclusion of capital depreciation and depletion. That is, the net value of current production ought not to include the consumption of capital as this is already reflected in the final prices of commodities on the market. Net national product is larger than national income chiefly due to the inclusion of indirect business taxes and liabilities, i.e., sales and excise taxes, etc., thus affecting the evaluation of government services.</p>
<p>We have based our conclusion about the Wartime growth of output on gross national product because, while the BLS wholesale price index is the best single indicator of price changes throughout the economy, it undoubtedly understates to some extent the degree of wartime inflation. A sounder procedure would have been to deflate separately each component of gross national product, but the work involved would not be justified by appreciably greater accuracy in the results. And for our purposes it is of relatively minor importance whether real output increased by 60 per cent, 70 per cent or 80 per cent during the war.</p>
<p>As a matter of fact, the federal reserve index of industrial production, which is based on physical volume, tends to confirm our analysis. This index, by for the most comprehensive of all industrial production indexes, rose from 109 in 1939 to 203 in 1945, a rise of 86 per cent. The Federal Reserve index, however, definitely overstates as a measure of total output in wartime because of weight assigned to war industries in its composition.</p>
<p>We are therefore content to rest with the figure of 72 per cent as the wartime increase in total output. How was this huge increase in production achieved? Initial impetus, of course, was provided by the availability of significant quantities of idle resources, including over nine million unemployed. There then occurred a surprising increase in the total employed labor force which, including both the civilian and armed force sectors, rose from over 45 million in 1939 to about 64 million in 1915, a rise of roughly 40 per cent. Even without the armed forces of almost 12 million, the employed civilian labor force still rose by about seven million workers, who worked for longer hours and whose productivity was increased by a huge expansion in productive capacity largely as a result of the enormous government expenditures for plant and equipment. In other words, the wartime expansion in real output was made possible essentially by an increase in capital accumulation and in the supply of labor power, in roughly equal proportions.</p>
<p>Had the wartime increase in the total labor force largely evaporated with the cessation of hostilities and had the wartime increase in capital been totally unsuited for peacetime use or, to the extent that it was unadaptable, had it not been substantially replenished by new, peacetime accumulations of capital, the level of activity of the economy would have reverted to prewar output, with consequent depressing effects. This did not occur, contrary to many expectations, because government expenditures were maintained at high levels, partly for war purposes, and American imperialism decided to support the recovery of the economics of Western Europe as part of the policy of containment of Stalinist imperialism and as a means of increasing the market for products of American capitalism. The entire process, of course, was nourished by the backlog accumulated backlog of consumer demands in the domestic market which, in turn, were supported by the tremendous level of private savings.</p>
<p>The same procedure that was used to calculate the wartime increase in output shows that postwar output is currently almost the levels achieved at the end of the war. It is true that our calculations yield an 18 per cent decline in real output in last five years, but the decline in the last four years is only 5 per cent. In other words, more than two-thirds the relatively small decline that has occurred took place in 1946, in the first postwar year before the menace of Stalinist imperialism became apparent to the leaders of the American bourgeoisie. Perhaps a planned reconversion would have averted the decline of 1946 best it must be remembered that the dominant elements within American capitalism at that time were bating all their plans and policies on a return to the <em>status quo ante bellum</em>.</p>
<p>It must be emphasized that the achievement of these extremely high levels of production occurred prior to the outbreak of the Korean war. For example, the Federal Reserve index was at 201 in July 1950 compared with 203 in 1945. Since then it has risen sharply, but at that level it is 14 per cent above 1949 and 5 per cent above 1948, the previous postwar peak. The labor force data show that the war-time peaks have been equaled. For June 1950 the employed civilian labor force was estimated (September 1950 issue of <strong>Monthly Labor Review</strong>) at 61,482,000. When the derived armed forces figure of 1,311,000 is added to this figure, the total employed labor force becomes 62,793,000 or close to the 64 minion figure reached in war time. There is, of course, the vast difference that the wartime figure included 12 million in the armed forces whereas the current pre-Korean armed forces figure is only slightly over 1,300,000. In other words, more than 9 million have been added to the employed civilian labor force since the end of World War II. These figures help to explain why Washington is so concerned about manpower shortages as the mobilization program unfolds, but they also reveal, in spite of the shorter work week, a goodly portion of the reason why postwar output has been maintained at almost wartime levels.</p>
<p>The other part of the postwar story of high level production and employment is to be found in the extremely rapid rate of private capital accumulation, the figures for which are even more pregnant with meaning for the future than the manpower data. The tabulation, based on the Department of Commerce data, graphically reveals the picture:</p>
<table align="center" cellpadding="4" cellspacing="4">
<tbody>
<tr>
<td colspan="5">
<p class="smc"><strong>POST WAR CAPITAL ACCUMULATION</strong><br>
(billions of Dollars)</p>
</td>
</tr>
<tr>
<td>
<p class="smc"> </p>
</td>
<td rowspan="6">
<p class="smc"> </p>
</td>
<th>
<p class="smc">Gross Private<br>
Domestic<br>
Investment</p>
</th>
<th>
<p class="smc">Net<br>
Foreign<br>
Investment</p>
</th>
<th>
<p class="smc">Total Private<br>
Gross Capital<br>
Formation</p>
</th>
</tr>
<tr>
<th>
<p class="sm1"><em>1946</em></p>
</th>
<td>
<p class="smc"> 28.7</p>
</td>
<td>
<p class="smc"> 4.6</p>
</td>
<td>
<p class="smc"> 33.3</p>
</td>
</tr>
<tr>
<th>
<p class="sm1"><em>1947</em></p>
</th>
<td>
<p class="smc"> 30.2</p>
</td>
<td>
<p class="smc"> 8.9</p>
</td>
<td>
<p class="smc"> 39.1</p>
</td>
</tr>
<tr>
<th>
<p class="sm1"><em>1948</em></p>
</th>
<td>
<p class="smc"> 42.1</p>
</td>
<td>
<p class="smc"> 1.9</p>
</td>
<td>
<p class="smc"> 45.0</p>
</td>
</tr>
<tr>
<th>
<p class="sm1"><em>1949</em></p>
</th>
<td>
<p class="smc"> 33.0</p>
</td>
<td>
<p class="smc"> 0.4</p>
</td>
<td>
<p class="smc"> 33.4</p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em><strong>1950</strong> est.</em>*</p>
</td>
<td>
<p class="smc"> 46.0</p>
</td>
<td>
<p class="smc">–2.0</p>
</td>
<td>
<p class="smc"> 44.0</p>
</td>
</tr>
<tr>
<th colspan="2">
<p class="sm1">POSTWAR TOTAL</p>
</th>
<td>
<p class="smc">181.0</p>
</td>
<td>
<p class="smc">13.8</p>
</td>
<td>
<p class="smc">194.8</p>
</td>
</tr>
<tr>
<td colspan="5">
<p class="smc">*Based on estimates for first and second quarters of 1950<br>
as contained in August 1950 <strong>Survey of Current Business</strong>.</p>
</td>
</tr>
</tbody>
</table>
<p class="fst">Thus, in the five postwar years American capitalists have accumulated on gross basis about 195 billion dollars, or an average of 39 billion dollars annually. This represents about 16 per cent of the postwar annual gross national product, a truly staggering percentage, especially when we remember that this growth in capital accumulation occurred with the economy already operating at peak levels due to the war.</p>
<p>If we wish to measure the net addition to private capital formation (i.e., the net additions to plant, equipment, construction, and business inventories, or constant capital as Marx would have put it), we have to subtract the postwar consumption of capital from gross private domestic investment. This is a field in which the experts always disagree as it involves depreciation, treatment of business reserves and accounting practices. It is clear that the maximum it can be, using the Department of Commerce figures, is the difference between what is termed “net national product” and “gross national product,” or about $83 billion. This would mean an average postwar annual capital consumption of over $16 billion, which appears to be excessive, and is accounted for not only by the rapid amortisation that was permitted of wartime plants but by the inclusion of “statistical discrepancies” and other uncertain quantities in the figures. It is noteworthy, however, that even on a net basis without any adjustment the annual rate of capital investment in the postwar period is 10 per cent, a rate that has not taken place in peacetime since the 1920’s. With proper adjustments, the percentage of net capital formation to net national product would appear to be about 12 per cent annually, which even exceeds the period 1919-1923, the five years following World War I.</p>
<p>All current reports testify to this accumulation of capital, the material base for American imperialism. For example, a report of the Securities and Exchange Commission for the second quarter of 1956, which is summarized in <strong>The New York Times</strong> of October 12, states “that the net working capital of United States corporations reached $73,800,000,000 at the end of June.” No wonder, then, that a National Association of Manufacturers analysis of the postwar financing of business, the findings of which are summarized in <strong>The New York Times</strong> of October 16, is able to state: “Retained earnings were an important source of new capital,” although this admission is then qualified, “but this resulted from a relatively low level of dividends rather than from high profits.” We would not expect the NAM ever to admit that business is making “high profits,” but without passing judgment on current arguments between management and stockholders as to the proper distribution of profits, the fact of the matter is that American business has never accumulated such profits as it has in the postwar period.</p>
<p>It is precisely the record accumulation of capital that makes so interesting the figures for the “net foreign investment” component of national product. Net foreign investment represents the net changes in claims against foreign countries and is affected principally by the net private balance of foreign trade and the net flow of long-term capital abroad. Thus, in the words of the August 1950 <strong>Survey of Current Business</strong>, “The negative balance of net foreign investment – arising from the substantial excess of Government grants over the current export surplus – remained for the second quarter of the year at approximately $2 billion, at an annual rate.”</p>
<p>While perhaps too much significance should not be attributed to the absolute figures, the trend – rapidly accelerating after the end of the war through 1947 and rapidly reversing itself from 1943 to the present – portrays the entire tragedy of modern capitalism in the constriction of the market and a paucity of opportunities for profitable foreign investment of surplus capital. The most recent figures on the net outflow of private long-term capital show the pathetically low levels to which American imperialism has sunk (from the September 1950 issue of the <strong>Survey of Current Business</strong>):</p>
<table align="center" cellpadding="2" cellspacing="2">
<tbody>
<tr>
<td colspan="7">
<p class="smc"><strong>NET OUTFLOW OF PRIVATE LONG-TERM CAPITAL</strong><br>
(Millions of Dollars)</p>
</td>
</tr>
<tr>
<td rowspan="5">
<p class="smc"> </p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="sm1">III</p>
</td>
<td>
<p class="sm1">Quarter 1949</p>
</td>
<td>
<p class="smc">192</p>
</td>
<td rowspan="5">
<p class="smc"> </p>
</td>
<td rowspan="5">
<p class="smc"> </p>
</td>
</tr>
<tr>
<td>
<p class="sm1">IV</p>
</td>
<td>
<p class="sm1">Quarter 1949</p>
</td>
<td>
<p class="smc">147</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">I</p>
</td>
<td>
<p class="sm1">Quarter 1950</p>
</td>
<td>
<p class="smc">227</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">II</p>
</td>
<td>
<p class="sm1">Quarter 1950</p>
</td>
<td>
<p class="smc"> 76</p>
</td>
</tr>
<tr>
<th colspan="3">
<p class="sm1">TOTAL</p>
</th>
<td>
<p class="smc">642</p>
</td>
</tr>
</tbody>
</table>
<p class="fst">In other words, a mere 14 million dollars represents the total net export of capital by American imperialism during the past year. For the same period, the net outflow of Government long-term capital amounted to $162 million, or 25 per cent of the private total. Even on a gross basis, discounting the total inflow of capital into America from abroad, the private total for the past year is only $1,434,000,000.</p>
<p>With capital accumulation proceeding at the all-time record rates described above, it is clear that the point where the American economy would be choked by surplus capital was rapidly being approached. The Point Four program, in particular, has been designed to establish a climate favorable to the investment of American capital abroad, but Truman has turned out to be just as fortunate as Roosevelt in the matter of having an aggressive foreign imperialism turn up at just the right time to make all sections of the American bourgeoisie unite in supporting an expanding program.</p>
<p>War outlays will more than substitute for the inadequacies of the Point Four program. They will relieve a number of economic and political pressures, although in turn creating others. Just how high they will go remains to be seen, but Secretary of the Navy Matthews is reported in <strong>The New York Times</strong> of October 13 as saying, “The cost of operating the national military establishment alone next year might exceed this year’s entire national budget: That would be more $42,000,000,000.” There will, of course, be differences of opinion within the ruling class as to the degree of preparation that is required. And it makes quite a difference to many industries and many sections of the capitalist class whether, say, 10 per cent or 25 per cent of the national product is devoted to direct war outlays.</p>
<p>An interesting statement of the perspective involved was made recently by Francis Adams Truslow, president of the New York Curb Exchange, as reported in <strong>The New York Times</strong> of September 23: “This war, or time of preparation, is not a specific all-out effort, but is perhaps almost a new way of living which we must endure indefinitely.” (My italics – <em>T.N.V.</em>) It should not escape our attention that this “new way of living” will operate on a world scale and that it is only another name for what we have called the Permanent War Economy. Its nature and impact are of the greatest importance, but will require a separate article or articles to analyze in any meaningful form.</p>
<p class="author">T.N. Vance</p>
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T.N. Vance
After Korea – What?
An Economic Interpretation of US Perspectives
(November 1950)
T.N. Vance, After Korea – What?, New International, November-December 1950, pp.323-333.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
While the outcome of the Korean war remains obscure at this writing, immediate outbreak of World War III is most unlikely. Even if the major antagonists find it impossible to reach a mutually satisfactory compromise, they are unprepared for global combat. The motives that prompted Stalinist imperialism to launch the attack against South Korea on June 25, as well as the motives that led American imperialism promptly to intervene, are well known and require no further analysis here. Nor need we be particularly concerned with the resolution of the many complex political, social and economic problems arising from the liquidation of the Korean war, as these have no real strategic significance in the titanic struggle now being waged between bureaucratic collectivism (Stalinist imperialism) and capitalism (American imperialism) for control of the entire world.
It is worth noting, in passing, that the political vacuum which existed in Korea and which was in a sense responsible for the war will remain. For the war has graphically revealed that an independent political force in Korea can never be powerful enough to achieve sovereignty. A Third Camp is not and cannot exist on any consequential scale in that unfortunate Land of the Morning Calm. Like other border areas incapable of independent existence, Korea is faced with the unhappy choice of a regime propped up by American bayonets or one controlled by the Stalinist secret police.
What is important, however, for the world as a whole and for the orientation of the independent socialist movement in particular, is the perspectives that flow for the rival imperialisms once hostilities cease in Korea: Is the world to become two armed camps, waiting fearfully for the inexorable outbreak of World War III, or is some type of peace possible? Can the strategic aims of Stalinist and American imperialisms be modified in any significant degree? In a word, will the environment in which the class struggle operates differ in any noteworthy features from that which existed prior to the Korean war? And, if so, what will the consequences be and how can any such new trends be expected to manifest themselves? These are obviously crucial questions for the independent socialist movement and we shall seek to answer them in this and later articles.
The spectacle of grown men mouthing meaningless words about peace is one with which we have become all too familiar in recent years. It has become even less edifying, if that is possible, as a result of the “peace” programs set forth by Acheson and Vishinsky amid the nauseating maneuvers of the rival imperialist blocs within the United Nations. Acheson has made it plain that the only program Washington has is to arm to the hilt. Then, when parity of armed forces is achieved, “we can negotiate with the Russians.” And this is called a policy, expressed by a “responsible statesman” occupying the lofty position of Secretary of State!
To such a policy even a Vishinsky can reply with telling effect (The New York Times, October 14): “Authoritative American spokesmen say that it is only force that can impress the Soviet Union, and that when the United States is so strong as to make the Soviet Union shake in its shoes then, and only then, will it be possible to reach some understanding. What a profound and crude mistake! ... This is the policy of the diktat, the policy of pressure and imposition, the policy of demands and half-demands, repeatedly presented, pressed, bolstered and backed up by force, a proliferation of military measures, and circles of naval, land and air bases ...”
In the course of the same speech, Stalin’s Foreign Minister indicated the equally bankrupt “peace” policy of Stalinist imperialism. After complaining that “The policy (of American imperialism) has been changed ... from the wartime period of cooperation ... to the post-war ... tough policy,” Vishinsky asks, “Why do you not get back to that situation (of wartime cooperation)? If you do, things might change. I am profoundly convinced that things would change. To this thinly disguised offer of a deal; American imperialism has repeatedly given its answer: “The Soviet Government cannot be trusted to keep its word.”
Mutual recriminations about who changed which policy first only serve to conceal the basic dilemma, which explains why neither Stalinist nor American imperialism can “trust the other.” The wartime alliance between Anglo-American and Stalinist imperialisms was brought about solely due to the superior threat posed by an aggressive German imperialism under Hitler. In the absence of any such threat, it is impossible for the imperialist expressions of capitalism and bureaucratic collectivism to arrive at any lasting agreement that would permit a peaceful solution of the world’s problems.
The conflict between bureaucratic collectivism and capitalism is irrepressible. No matter what pious statements about peaceful coexistence of the two systems are issued by Moscow and Washington, they cannot disguise the fundamental antagonisms that make inevitable a clash for world supremacy. We are long accustomed to the periodic quotations from Stalin, as the occasion demands, about the “peaceful intentions of the USSR,” and (buttressed by falsified quotations from Lenin) the “possibility of peace between socialism and capitalism.”
Now we are treated to a similar disingenuous spectacle by the State Department, over which the same Acheson presides. A popular pamphlet entitled Our Foreign Policy has recently been issued. According to The New York Times of September 30, the volume constitutes a bitter indictment of Soviet policy, but it also sets out to disprove the “view that the East-West split is one between communism and capitalism.” In other words, The State Department also set out to correct what it regarded as an incorrect impression of the present tension of the world. It is not a question of differing economic systems, said the booklet, but of the threat of a new imperialist power.
“The deepening division between the Soviet-dominated bloc and the free world is not, as some people wrongly think, a conflict between capitalism and communism”, it said. “Among the nations of the free world, in fact, you will find some that are not capitalist at all, but have freely chosen a socialist system.
“The conflict is really between a power-hungry government that is bent on spreading its power by force, terror and every other means and the community of free nations which refuses to be conquered or dominated, or to stand by and see its members swallowed up.” (Italics mine – T.N.V.)
Thus, the State Department, like Vishinsky, would have us believe that all that is involved is a question of methods. That is to say, if Stalinism would relinquish its tactics of force, subversion and violence then we could have a peaceful world. It is axiomatic that methods flow from the socio-economic structure of a given state, but even if Stalinism employed “democratic” methods acceptable to Washington, American imperialism would still refuse “to stand by and see its members swallowed up.” Moreover, by this time it should be ABC, even to the State Department, that what really makes “the threat of a new imperialist power” is the existence of a new ruling class exploiting society in a new manner; namely, the social system known as bureaucratic collectivism. To be sure, this system is the antithesis of socialism and was actually brought to power by a counter-revolution that destroyed the workers state established by the Bolshevik Revolution.
Nevertheless, it is the irreconcilable antagonisms between two economic systems that have given rise to the “East-West conflict” and which threaten to lead us to World War III within the next decade. Both Moscow and Washington, at bottom, know this, although from time to time each has politically expedient reasons for issuing propaganda, designed to convey a different impression. And each has its own reasons for preparing in its own way for the inevitable showdown.
Stalinist imperialism, to which bureaucratic collectivism has given rise, is a system of slavery and peonage based on nationalized property. It is essentially an “import” imperialism whose aggressive policy is based on the economic necessity of acquiring constantly new sources of labor power; both skilled and slave, and of adding to its stock of producer and consumers goods, and which can feel safe politically only when it has integrated the major centers of world population and production into the system of bureaucratic collectivism. The Stalinist empire, as the same booklet of the State Department points out, has already enhanced its domain since the end of World War II by some 7,500,000 square miles of territory and by some 500,000,000 more people.
American imperialism, on the other hand is by far the most powerful imperialism to which finance capitalism has given birth. It is an “export” imperialism, inexorably driven by the most rapid accumulation of capital in the history of capitalism to export capital in all its forms in ever-increasing quantities. It is easy-going and bloated but it cannot be indifferent to the huge bites that Stalinism has taken out of the world market. It must first contain Stalinist imperialism and then destroy it.
In retrospect it is clear to American imperialism that it made many mistakes during the war, although the menace of German and Japanese imperialisms was immediate and real, while the danger of Stalinist imperialism was remote and at best imperfectly understood. To some extent these “mistakes” were unavoidable, for history rarely permits capitalism to function in terms of the long-run interests of the international bourgeoisie. What disturbs Washington, however, is the postwar mistake of permitting Stalin such an overwhelming head-start in the armaments race, for the curve of munitions production requires years before it generates real momentum. Indeed, it was not until 1944, despite the destruction wrought by Allied bombing, that American war production exceeded that of Nazi Germany. This lesson is well known in Washington and amounts for the unanimity that greeted the launching of the “national defense” program.
In this connection, the series of articles in The New York Times by its Moscow correspondent, Harrison E. Salisbury, is most interesting. Having just returned from a vacation in the United States, Salisbury has found Stalinland to be one of peace and growing prosperity. “The atmosphere of Moscow, and of the part of Russia that I crossed in traveling here from Poland,” he says, “is not one of war nor of preparation for war.” He concludes his dispatch of October 13 by stating: “What is interesting about the Soviet situation is that as of today, so far as research can determine, there has been no substantial changeover of the economy from its predominantly peacetime aspect to one of preparation for, or anticipation of, war.”
We do not wish to impugn Mr. Salisbury’s research abilities, or even the facilities made available to him in conducting his research, but the timing of the articles invites the suspicion that they were inspired by more than reportorial zeal and the conclusion is demonstrably false. The facts have nothing to do with atmosphere, which may well be as reported, but if Moscow today has a “predominantly peacetime aspect” it can only be because the normal face of Stalinism is one of a Permanent War Economy. The maintenance of 300 divisions, even it all are not at full wartime strength, the arming of the satellites, the military-technological development of strategic roads, canals, railroads, airports and other means of communication and transportation within the satellite countries, the expansion of the Soviet Navy, especially the submarine fleet, the feverish development of uranium mines, etc., etc., are an indisputable evidence of a war economy.
Since statistics are a “class science” in Stalinland, we cannot say what the precise percentage of the national product spent for war purposes is, but at a guess we would place it in the neighborhood of 25 per cent. Since during the last war only about 50 per cent of the national product was devoted by the Soviet Government to direct war outlays, such a reduction coupled with the fruits of imperialist acquisition and increasing production could well result in some improvement in civilian standards of living. The important point is that for Stalinism the shift from “peace” to “war” is only quantitative, not qualitative, and can be accomplished without upsetting normal routines, either politically or economically.
Moreover, while the ultimate aim of Stalinist imperialist strategy is conquest of the entire world, the immediate aims are clearly more limited. Time, the Kremlin feels, is on its side. It must complete the process of integrating the economics of existing satellites into its own. It needs another five-year plan or perhaps two, to increase its production and military potential to the desired level of overwhelming superiority, not to mention atomic equality. It must overthrow Tito and eliminate Titoism, in which objective it may have been mightily aided by the recent drought in Yugoslavia that, at last report, has destroyed some 4,000,000 tons of foodstuffs. Then must come the closing of the pincers on India and, choicest morsel of all, acquisition of all of Germany.
The air of confidence and tranquillity with which Stalinist spokesmen face the future is therefore much more than a mere propaganda “trick,” a so-called “peace offensive” to lull the decadent democracies into lowering their armed guard so that they will be an easy prey for a sudden onslaught. Stalin would welcome a deal with American imperialism, provided that it did not materially weaken his chances of obtaining control of the entire vast Eurasian heartland, for this is the realistic strategic objective of Stalinist imperialism in the next decade. The Stalinist ruling class has everything to gain by postponing the final battle with American imperialism, or so it reasons.
Two aspects of current American imperialist policy are most noteworthy. Internally, there is minimal unanimity within the American bourgeoisie regarding the fundamentals of imperialist strategy. The Truman policy of containment of Stalinist imperialism, which is the essential meaning of all major steps in foreign policy in recent years, may be criticized as to the manner in which it has been carried out but it is rare indeed that anyone seeks to change the objective or, the major strategy adopted to achieve this basic purpose. This is reflected in domestic politics by the extreme weakness of the isolationist fringe, an obvious but nonetheless significant difference from the post-World War I situation. It is apparent that all major tendencies within American imperialism are clearly aware that it would be fatal to permit Stalinist imperialism to control all of Europe and Asia, from the Atlantic to the Pacific and Indian oceans, for if Stalinist imperialism controlled three-fourths of the world’s population an insoluble political problem is presented even if in the long run a military victory under such adverse conditions may still be possible.
Externally, despite the establishment of the so-called Stettin-Trieste line and the attempts to establish a comparable demarcation line in Asia, American imperialism has clearly been on the defensive. It is Stalinist imperialism that selects the area and methods of struggle and American imperialism that replies with a thoroughly improvised policy. Because these tactical methods are either generally unsuccessful or incapable of achieving any lasting victory, which is more or less inevitable in view of American imperialism’s inability to solve any conflict on other than military terms, there is dissatisfaction with and criticism of specific tactics. This tactical opposition has combined with mounting economic pressures to establish the policy of containing Stalinist imperialism through the mobilization of superior armed force. From parity, which will be impossible to measure, to superiority of armed forces, which may not be easy to achieve, to World War III, which may be difficult to win, is the road on which American imperialism has definitely embarked.
Korea exploded the fallacy that American imperialism could contain Stalinist imperialism through speeches and a business-as-usual (i.e., a defensive) policy. For a brief flurry it almost gave rise to its diametric opposite, the policy of the direct offensive which meant seeking immediately a purely military victory over Stalinist imperialism. This, in essence, is the position of the advocates of a “preventive” war and all variations thereof. We do not for one moment exclude the possibility that American imperialism can defeat Stalinist imperialism in an all-out war, featured especially by use of the atomic bomb, but such a military victory would be politically disastrous. It is most unlikely, moreover, that the struggle would be short or easy. On the contrary, all available evidence points to a protracted war between two fairly evenly matched antagonists. The consequent economic destruction and totalitarianization of American political life, without even considering the impact on the rest of the world, would make any military victor; absolutely worthless. Such a policy then can be only a last resort, to be embraced only if there is no other hope for survival of the American capitalist class.
Faced with the failure of the previous “defensive” policy and the impossibility of adopting an overwhelmingly “aggressive” policy, the American bourgeoisie has finally reached a policy that in political terms can best be described as “Neither Peace nor War”. And is literally true that they do not want peace and cannot afford war with Stalinism! To be sure, American imperialism cannot mobilize the support of the international proletariat, as Trotsky hoped to do when he advanced the identical slogan on the occasion of the Brest Litovsk discussions, but it can hope to mobilise what is left of the international bourgeoisie.
The policy of “Neither Peace Nor War” will gain time, unless of course Stalinist imperialism reacts by casting the die for immediate war. This is most unlikely for reasons cited earlier. Naturally, if war does take place within the next few years, then the present breathing spell will have been utilized to overcome the Stalinist headstart in armaments production, or at least to reduce the present disparity, thereby enhancing the prospects of American imperialism for military victory. Above all, allies will be sought and armed in all areas of the world not under the control of Stalinist imperialism. This is, of course, the real meaning of the Atlantic Pact and related policies. The process of reducing British, French and other Western European imperialisms to the position of satellites dependent upon military and economic aid from the United States is a complicated one and takes time. It takes even more time to revive and harness the military power of defeated German and Japanese imperialisms. American imperialism would also like to have the time to conquer the markets of the disintegrating British Empire and to solve a series of other economic problems arising out of the pressure of the most rapid accumulation of capital in the history of the world.
This ambivalent policy is not without its dangers, but there is no alternative for American imperialism. It even contains the hope that the death of Stalin may precipitate a struggle for succession that will greatly weaken or even destroy Stalinist imperialism. Mr Hoffman of ECA fame is fond of speculating on such a turn of events, and it is said that this is one of the reasons he opposed the militarization of the Marshall Plan which presumably led to his resignation.
No better illustration of the significance of the new policy can be found than in what has happened to the Marshall Plan. Although in the interests of American imperialism, and part of the policy of Stalinist containment, it did nevertheless eschew military policies and it had make some progress toward improving standards of living in Western Europe and achieving a more rational and integrated economy. Now all this has been abandoned under the impact of the mobilization program. As The New York Times correspondent, Michael L. Hoffman, expresses it in his dispatch published on October 13 “Time and again in the past few weeks this correspondent has heard. European economic officials of various nationalities say with an actual or figurative shrug of the shoulders that as the United States seemed to have lost interest in everything except rearmament each country had better start looking out after itself in economic matters.” (My italics – T.N.V.) In fact, the article was headlined “Europe’s economy edges to autarchy.”
The political reception that the new American policy has received in Europe and Asia, especially Asia, is anything but favorable. But it is its economic causes and effects that are the key to the shape of the world after the end of the Korean war.
The immediate origin of the economic pressures that have pushed American imperialism into its new course, which is without historical precedent for a democratic capitalist nation, lies in the phenomenal expansion of the productive forces during World War II and the virtual maintenance of this level of production during the last five years. This development has not only been contrary to the expectations of the bourgeoisie but also, let us admit, unexpected by most Marxists. Here our analysis will be helped by making reference to some statistical measures, even if they are considered as but crude approximations.
We start with the fact that production increased about 12 per cent a year during World War II, from 1939 to 1945. In other words, total output was some 72 per cent higher when the war ended than when it began. This can be seen by examining the figures for national income and national product of the Department of Commerce as published in the Survey of Current Business (the latest revisions are contained in the issue of July 1950).
WARTIME GROWTH OF OUTPUT
(Millions of Dollars)
1939
1945
% Increase
Current
Dollars
% Increase
Constant
Dollars*
National Income
$72,532
$182,621
152%
84%
Net National Product
$83,238
$202,800
144%
78%
Gross National Product
$91,339
$215,210
136%
72%
* Calculated by deflating the 1945 current dollar figures by the rise in the BLS
wholesale price index, which rose from 77.1 in 1939 to 106.3 In 1945 – a rise of
37.2 per cent yielding a deflator of 27.1 per cent.
National income and product figures are, of course, estimates, but they are the only dollar figures that attempt to portray the productive performance of the economy. Without entering into current controversies among the national income specialists, and, granting that important conceptual and statistical problems are involved, we are concerned only with basic trends which are not altered even if the margin of error in the figures is sizable. Fundamentally, gross national product is larger than net national product by the inclusion of capital depreciation and depletion. That is, the net value of current production ought not to include the consumption of capital as this is already reflected in the final prices of commodities on the market. Net national product is larger than national income chiefly due to the inclusion of indirect business taxes and liabilities, i.e., sales and excise taxes, etc., thus affecting the evaluation of government services.
We have based our conclusion about the Wartime growth of output on gross national product because, while the BLS wholesale price index is the best single indicator of price changes throughout the economy, it undoubtedly understates to some extent the degree of wartime inflation. A sounder procedure would have been to deflate separately each component of gross national product, but the work involved would not be justified by appreciably greater accuracy in the results. And for our purposes it is of relatively minor importance whether real output increased by 60 per cent, 70 per cent or 80 per cent during the war.
As a matter of fact, the federal reserve index of industrial production, which is based on physical volume, tends to confirm our analysis. This index, by for the most comprehensive of all industrial production indexes, rose from 109 in 1939 to 203 in 1945, a rise of 86 per cent. The Federal Reserve index, however, definitely overstates as a measure of total output in wartime because of weight assigned to war industries in its composition.
We are therefore content to rest with the figure of 72 per cent as the wartime increase in total output. How was this huge increase in production achieved? Initial impetus, of course, was provided by the availability of significant quantities of idle resources, including over nine million unemployed. There then occurred a surprising increase in the total employed labor force which, including both the civilian and armed force sectors, rose from over 45 million in 1939 to about 64 million in 1915, a rise of roughly 40 per cent. Even without the armed forces of almost 12 million, the employed civilian labor force still rose by about seven million workers, who worked for longer hours and whose productivity was increased by a huge expansion in productive capacity largely as a result of the enormous government expenditures for plant and equipment. In other words, the wartime expansion in real output was made possible essentially by an increase in capital accumulation and in the supply of labor power, in roughly equal proportions.
Had the wartime increase in the total labor force largely evaporated with the cessation of hostilities and had the wartime increase in capital been totally unsuited for peacetime use or, to the extent that it was unadaptable, had it not been substantially replenished by new, peacetime accumulations of capital, the level of activity of the economy would have reverted to prewar output, with consequent depressing effects. This did not occur, contrary to many expectations, because government expenditures were maintained at high levels, partly for war purposes, and American imperialism decided to support the recovery of the economics of Western Europe as part of the policy of containment of Stalinist imperialism and as a means of increasing the market for products of American capitalism. The entire process, of course, was nourished by the backlog accumulated backlog of consumer demands in the domestic market which, in turn, were supported by the tremendous level of private savings.
The same procedure that was used to calculate the wartime increase in output shows that postwar output is currently almost the levels achieved at the end of the war. It is true that our calculations yield an 18 per cent decline in real output in last five years, but the decline in the last four years is only 5 per cent. In other words, more than two-thirds the relatively small decline that has occurred took place in 1946, in the first postwar year before the menace of Stalinist imperialism became apparent to the leaders of the American bourgeoisie. Perhaps a planned reconversion would have averted the decline of 1946 best it must be remembered that the dominant elements within American capitalism at that time were bating all their plans and policies on a return to the status quo ante bellum.
It must be emphasized that the achievement of these extremely high levels of production occurred prior to the outbreak of the Korean war. For example, the Federal Reserve index was at 201 in July 1950 compared with 203 in 1945. Since then it has risen sharply, but at that level it is 14 per cent above 1949 and 5 per cent above 1948, the previous postwar peak. The labor force data show that the war-time peaks have been equaled. For June 1950 the employed civilian labor force was estimated (September 1950 issue of Monthly Labor Review) at 61,482,000. When the derived armed forces figure of 1,311,000 is added to this figure, the total employed labor force becomes 62,793,000 or close to the 64 minion figure reached in war time. There is, of course, the vast difference that the wartime figure included 12 million in the armed forces whereas the current pre-Korean armed forces figure is only slightly over 1,300,000. In other words, more than 9 million have been added to the employed civilian labor force since the end of World War II. These figures help to explain why Washington is so concerned about manpower shortages as the mobilization program unfolds, but they also reveal, in spite of the shorter work week, a goodly portion of the reason why postwar output has been maintained at almost wartime levels.
The other part of the postwar story of high level production and employment is to be found in the extremely rapid rate of private capital accumulation, the figures for which are even more pregnant with meaning for the future than the manpower data. The tabulation, based on the Department of Commerce data, graphically reveals the picture:
POST WAR CAPITAL ACCUMULATION
(billions of Dollars)
Gross Private
Domestic
Investment
Net
Foreign
Investment
Total Private
Gross Capital
Formation
1946
28.7
4.6
33.3
1947
30.2
8.9
39.1
1948
42.1
1.9
45.0
1949
33.0
0.4
33.4
1950 est.*
46.0
–2.0
44.0
POSTWAR TOTAL
181.0
13.8
194.8
*Based on estimates for first and second quarters of 1950
as contained in August 1950 Survey of Current Business.
Thus, in the five postwar years American capitalists have accumulated on gross basis about 195 billion dollars, or an average of 39 billion dollars annually. This represents about 16 per cent of the postwar annual gross national product, a truly staggering percentage, especially when we remember that this growth in capital accumulation occurred with the economy already operating at peak levels due to the war.
If we wish to measure the net addition to private capital formation (i.e., the net additions to plant, equipment, construction, and business inventories, or constant capital as Marx would have put it), we have to subtract the postwar consumption of capital from gross private domestic investment. This is a field in which the experts always disagree as it involves depreciation, treatment of business reserves and accounting practices. It is clear that the maximum it can be, using the Department of Commerce figures, is the difference between what is termed “net national product” and “gross national product,” or about $83 billion. This would mean an average postwar annual capital consumption of over $16 billion, which appears to be excessive, and is accounted for not only by the rapid amortisation that was permitted of wartime plants but by the inclusion of “statistical discrepancies” and other uncertain quantities in the figures. It is noteworthy, however, that even on a net basis without any adjustment the annual rate of capital investment in the postwar period is 10 per cent, a rate that has not taken place in peacetime since the 1920’s. With proper adjustments, the percentage of net capital formation to net national product would appear to be about 12 per cent annually, which even exceeds the period 1919-1923, the five years following World War I.
All current reports testify to this accumulation of capital, the material base for American imperialism. For example, a report of the Securities and Exchange Commission for the second quarter of 1956, which is summarized in The New York Times of October 12, states “that the net working capital of United States corporations reached $73,800,000,000 at the end of June.” No wonder, then, that a National Association of Manufacturers analysis of the postwar financing of business, the findings of which are summarized in The New York Times of October 16, is able to state: “Retained earnings were an important source of new capital,” although this admission is then qualified, “but this resulted from a relatively low level of dividends rather than from high profits.” We would not expect the NAM ever to admit that business is making “high profits,” but without passing judgment on current arguments between management and stockholders as to the proper distribution of profits, the fact of the matter is that American business has never accumulated such profits as it has in the postwar period.
It is precisely the record accumulation of capital that makes so interesting the figures for the “net foreign investment” component of national product. Net foreign investment represents the net changes in claims against foreign countries and is affected principally by the net private balance of foreign trade and the net flow of long-term capital abroad. Thus, in the words of the August 1950 Survey of Current Business, “The negative balance of net foreign investment – arising from the substantial excess of Government grants over the current export surplus – remained for the second quarter of the year at approximately $2 billion, at an annual rate.”
While perhaps too much significance should not be attributed to the absolute figures, the trend – rapidly accelerating after the end of the war through 1947 and rapidly reversing itself from 1943 to the present – portrays the entire tragedy of modern capitalism in the constriction of the market and a paucity of opportunities for profitable foreign investment of surplus capital. The most recent figures on the net outflow of private long-term capital show the pathetically low levels to which American imperialism has sunk (from the September 1950 issue of the Survey of Current Business):
NET OUTFLOW OF PRIVATE LONG-TERM CAPITAL
(Millions of Dollars)
III
Quarter 1949
192
IV
Quarter 1949
147
I
Quarter 1950
227
II
Quarter 1950
76
TOTAL
642
In other words, a mere 14 million dollars represents the total net export of capital by American imperialism during the past year. For the same period, the net outflow of Government long-term capital amounted to $162 million, or 25 per cent of the private total. Even on a gross basis, discounting the total inflow of capital into America from abroad, the private total for the past year is only $1,434,000,000.
With capital accumulation proceeding at the all-time record rates described above, it is clear that the point where the American economy would be choked by surplus capital was rapidly being approached. The Point Four program, in particular, has been designed to establish a climate favorable to the investment of American capital abroad, but Truman has turned out to be just as fortunate as Roosevelt in the matter of having an aggressive foreign imperialism turn up at just the right time to make all sections of the American bourgeoisie unite in supporting an expanding program.
War outlays will more than substitute for the inadequacies of the Point Four program. They will relieve a number of economic and political pressures, although in turn creating others. Just how high they will go remains to be seen, but Secretary of the Navy Matthews is reported in The New York Times of October 13 as saying, “The cost of operating the national military establishment alone next year might exceed this year’s entire national budget: That would be more $42,000,000,000.” There will, of course, be differences of opinion within the ruling class as to the degree of preparation that is required. And it makes quite a difference to many industries and many sections of the capitalist class whether, say, 10 per cent or 25 per cent of the national product is devoted to direct war outlays.
An interesting statement of the perspective involved was made recently by Francis Adams Truslow, president of the New York Curb Exchange, as reported in The New York Times of September 23: “This war, or time of preparation, is not a specific all-out effort, but is perhaps almost a new way of living which we must endure indefinitely.” (My italics – T.N.V.) It should not escape our attention that this “new way of living” will operate on a world scale and that it is only another name for what we have called the Permanent War Economy. Its nature and impact are of the greatest importance, but will require a separate article or articles to analyze in any meaningful form.
T.N. Vance
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<h2>Frank Demby</h2>
<h1>Stalin Orders Labor Peonage</h1>
<h4>The Second of a Series of Articles on Russia</h4>
<h3>(January 1941)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_04" target="new">Vol. 5 No. 4</a>, 27 January 1941, p. 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">On May 28, June 26 and July 10, 1940, Stalin’s Council of Peoples’ Commissars of the USSR and the Central Committee of the Communist Party issued three decrees which subject the workers of Russia to a vicious slavery. These decrees represent the first fruits for the Russian workers of Stalin’s debacle in Finland, and the alliance with Hitler fascism.<br>
</p>
<h4>The First Decree</h4>
<p class="fst">The first of these decrees, that of foremen in most of the heavy indirect equivalent in every sense of a superintendent in a capitalist factory. He is to be considered the leader in that portion of the shop over which he has jurisdiction. He has full power in regard to the work assigned to him and bears complete responsibility for the carrying out of this work. The workers will now receive their orders through the foreman exclusively. The foreman now has the power to hire and fire all workmen, with the approval of the head of the department in question. The foreman is given the power to punish workers guilty of interfering with labor discipline. He pays out the wages of the workers. The foreman controls production and changes in production. He is expected to see to it that his workers are properly placed, given the proper tools, and properly instructed so as to produce the maximum amount possible.</p>
<p>Since the foreman is now to occupy such an important position in Russia, he is to be chosen from among engineers, technicians, or highly qualified workmen. As a reward for administering Stalin’s whip over the workers, the wages of foremen were raised, starting June 1, so as to be higher than the average wage of qualified workmen. This means, at the very least, a doubling of wages for foremen. Already functioning foremen, without the necessary technical education, as well as newly appointed foremen, must pass a test given by the Committee of Attestations. In the usual propaganda blast which accompanied this decree, it is indicated that those previously in positions of management were distinguished by a lack of culture and general ignorance. “Proletarian origin” will no longer be a major qualification, or indeed a recommendation, for holding a managerial position, in the Union of Soviet Socialist Republics. Now the heads of departments and factory directors, as well as the practical workers without formal education, will respond to this decree remains to be seen, but there are already signs of discord and protest.<br>
</p>
<h4>The Second Decree</h4>
<p class="fst">The second decree, that of June 26, is the most drastic of all. To make it more palatable, it was issued at the initiative of the Central Council of Trade Unions of the USSR. <em>A very important part of the decree is that which institutes a general wage cut amongst all workers of more than 15 percent.</em> This is done not by directly cutting the amount of rubles which one Russian worker gets, but by lengthening the working day. Work is now organized on the basis of a seven day week, instead of a six day week. Hours of work per working day are lengthened from seven to eight hours, in all cases where the working day was formerly seven hours. This covers the overwhelming majority of workers. Those previously working six hours must now work seven hours, while employees of institutions and persons reaching the age of 16 who had previously worked six hours must now work eight hours. In all cases, of course, while the hours of work are increased, the wage remains the same.</p>
<p>More important, however, than the wage cut in the decree of June 26 is the remainder of the decree which establishes <em>complete industrial peonage</em>. Workers are now absolutely forbidden to leave their jobs without authorization, or to move from one job to another. Permission for leaving or changing jobs can be granted only by the special authorization of a factory director. If a worker violates this provision, he can be sentenced by the People’s Court to a prison term of from two to four months. If the violation is called an illegal absence, the previous penalty for illegal absence – compulsory dismissal from the job – is supplanted by the new penalty: compulsory labor at the place of employment for a term of six months at a 25 percent wage reduction. And, typical of all Soviet decrees, factory directors who do not properly enforce these provisions will themselves be hold responsible.</p>
<p>The lengthening of the work day is justified by references to the dangerous international situation and the threat of war. But it is nowhere indicated that this lengthening of the work day is to be temporary. The binding of workers to the factory, coming on top of the previous introduction of the internal passport system, is aimed at reducing the labor turnover in Soviet industry. The average Russian worker changes his job at least once a year. This is merely a reflection of the terrible living conditions obtaining in most Russian towns and factories. In addition, many of those workers guilty of “illegal absence” were Communist Party members absent on meetings of one kind or another. Consequently, the plenary session of the Central Committee of the Communist Party held in July, 1940, in order to enforce the decree of June 28 amongst Communist Party workers, decreed that there were to be no meetings or conferences of any kind during the working hours of the factory! Nothing, absolutely nothing, is to, interfere with the worker’s performance on his job.<br>
</p>
<h4>The Third Decree</h4>
<p class="fst">The third decree, that of July 10, has to do with output of poor quality and bad performance on the job. Such cases are to be considered wreckage, and therefore a crime against the State. Factory directors and engineers will be held responsible and are subject to prison sentences of from five to eight years in case established standards are not lived up to in, any respect whatsoever.</p>
<p>Closely related to these decrees are two others, one of which establishes the penalty for “petty theft” (regardless of the amount) or “acts of hooliganism” at one year in jail; the other specifically applies the industrial peonage decrees to the factory directors, and other managerial officials. <em>No one employed in a factory in any capacity is now permitted to leave that factory, without the consent of Stalin, or one of his hirelings.</em> Life in Stalin’s “paradise” will be something like the following for the average person: He attends school until the age of 14 (our equivalent of free secondary education, and free higher education has been abolished by a more recent decree); from the age of 14 to 18 he will be drafted for compulsory vocational training in mechanical lines which will serve the war machine; at the age of 18 he enters upon five years compulsory military training; at the age of 23, unless he enters permanent service in the armed forces, he will be assigned to work in any occupation in any location that pleases the dictate of the Kremlin. All this, of course, is in direct violation of Stalin’s own constitution of 1936.</p>
<p>When assigned to some factory or establishment, regardless of his own inclination or family ties, the Soviet slave is now bound to the establishment for the rest of his working days. If, of course, the masters in the Kremlin wish to change his place of servitude, they may do so without consulting the worker himself. The result is, therefore, that the Russian worker today does not even have the same rights that the Russian serf had. The serf, at least, while treated as a thing, whose function was simply to produce enough for his lord and master to live on, was bound to the soil and could not be moved about at the whim of his master.</p>
<p>The immediate reason for these decrees of industrial peonage is to be found in the visible breakdown of the Russian system of economic planning. The only way that Stalin knows to increase production is to command slave labor to produce or else. Whether these decrees will increase production or not, remains to be seen. If they do not, it will only hasten the day when Hitler decides to take over the direction of Soviet economy himself. If they do bring results, which is most unlikely, they can only serve to increase the thickness of the chains which bind the Russian worker in servitude today. In my next article in this series, I shall try to show the extent of the breakdown in Soviet economic planning and the reasons for this breakdown, for it must never be forgotten that the fundamental reasons for Stalin’s present policy are to be found in the internal weaknesses of Stalin’s regime.</p>
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Frank Demby
Stalin Orders Labor Peonage
The Second of a Series of Articles on Russia
(January 1941)
From Labor Action, Vol. 5 No. 4, 27 January 1941, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
On May 28, June 26 and July 10, 1940, Stalin’s Council of Peoples’ Commissars of the USSR and the Central Committee of the Communist Party issued three decrees which subject the workers of Russia to a vicious slavery. These decrees represent the first fruits for the Russian workers of Stalin’s debacle in Finland, and the alliance with Hitler fascism.
The First Decree
The first of these decrees, that of foremen in most of the heavy indirect equivalent in every sense of a superintendent in a capitalist factory. He is to be considered the leader in that portion of the shop over which he has jurisdiction. He has full power in regard to the work assigned to him and bears complete responsibility for the carrying out of this work. The workers will now receive their orders through the foreman exclusively. The foreman now has the power to hire and fire all workmen, with the approval of the head of the department in question. The foreman is given the power to punish workers guilty of interfering with labor discipline. He pays out the wages of the workers. The foreman controls production and changes in production. He is expected to see to it that his workers are properly placed, given the proper tools, and properly instructed so as to produce the maximum amount possible.
Since the foreman is now to occupy such an important position in Russia, he is to be chosen from among engineers, technicians, or highly qualified workmen. As a reward for administering Stalin’s whip over the workers, the wages of foremen were raised, starting June 1, so as to be higher than the average wage of qualified workmen. This means, at the very least, a doubling of wages for foremen. Already functioning foremen, without the necessary technical education, as well as newly appointed foremen, must pass a test given by the Committee of Attestations. In the usual propaganda blast which accompanied this decree, it is indicated that those previously in positions of management were distinguished by a lack of culture and general ignorance. “Proletarian origin” will no longer be a major qualification, or indeed a recommendation, for holding a managerial position, in the Union of Soviet Socialist Republics. Now the heads of departments and factory directors, as well as the practical workers without formal education, will respond to this decree remains to be seen, but there are already signs of discord and protest.
The Second Decree
The second decree, that of June 26, is the most drastic of all. To make it more palatable, it was issued at the initiative of the Central Council of Trade Unions of the USSR. A very important part of the decree is that which institutes a general wage cut amongst all workers of more than 15 percent. This is done not by directly cutting the amount of rubles which one Russian worker gets, but by lengthening the working day. Work is now organized on the basis of a seven day week, instead of a six day week. Hours of work per working day are lengthened from seven to eight hours, in all cases where the working day was formerly seven hours. This covers the overwhelming majority of workers. Those previously working six hours must now work seven hours, while employees of institutions and persons reaching the age of 16 who had previously worked six hours must now work eight hours. In all cases, of course, while the hours of work are increased, the wage remains the same.
More important, however, than the wage cut in the decree of June 26 is the remainder of the decree which establishes complete industrial peonage. Workers are now absolutely forbidden to leave their jobs without authorization, or to move from one job to another. Permission for leaving or changing jobs can be granted only by the special authorization of a factory director. If a worker violates this provision, he can be sentenced by the People’s Court to a prison term of from two to four months. If the violation is called an illegal absence, the previous penalty for illegal absence – compulsory dismissal from the job – is supplanted by the new penalty: compulsory labor at the place of employment for a term of six months at a 25 percent wage reduction. And, typical of all Soviet decrees, factory directors who do not properly enforce these provisions will themselves be hold responsible.
The lengthening of the work day is justified by references to the dangerous international situation and the threat of war. But it is nowhere indicated that this lengthening of the work day is to be temporary. The binding of workers to the factory, coming on top of the previous introduction of the internal passport system, is aimed at reducing the labor turnover in Soviet industry. The average Russian worker changes his job at least once a year. This is merely a reflection of the terrible living conditions obtaining in most Russian towns and factories. In addition, many of those workers guilty of “illegal absence” were Communist Party members absent on meetings of one kind or another. Consequently, the plenary session of the Central Committee of the Communist Party held in July, 1940, in order to enforce the decree of June 28 amongst Communist Party workers, decreed that there were to be no meetings or conferences of any kind during the working hours of the factory! Nothing, absolutely nothing, is to, interfere with the worker’s performance on his job.
The Third Decree
The third decree, that of July 10, has to do with output of poor quality and bad performance on the job. Such cases are to be considered wreckage, and therefore a crime against the State. Factory directors and engineers will be held responsible and are subject to prison sentences of from five to eight years in case established standards are not lived up to in, any respect whatsoever.
Closely related to these decrees are two others, one of which establishes the penalty for “petty theft” (regardless of the amount) or “acts of hooliganism” at one year in jail; the other specifically applies the industrial peonage decrees to the factory directors, and other managerial officials. No one employed in a factory in any capacity is now permitted to leave that factory, without the consent of Stalin, or one of his hirelings. Life in Stalin’s “paradise” will be something like the following for the average person: He attends school until the age of 14 (our equivalent of free secondary education, and free higher education has been abolished by a more recent decree); from the age of 14 to 18 he will be drafted for compulsory vocational training in mechanical lines which will serve the war machine; at the age of 18 he enters upon five years compulsory military training; at the age of 23, unless he enters permanent service in the armed forces, he will be assigned to work in any occupation in any location that pleases the dictate of the Kremlin. All this, of course, is in direct violation of Stalin’s own constitution of 1936.
When assigned to some factory or establishment, regardless of his own inclination or family ties, the Soviet slave is now bound to the establishment for the rest of his working days. If, of course, the masters in the Kremlin wish to change his place of servitude, they may do so without consulting the worker himself. The result is, therefore, that the Russian worker today does not even have the same rights that the Russian serf had. The serf, at least, while treated as a thing, whose function was simply to produce enough for his lord and master to live on, was bound to the soil and could not be moved about at the whim of his master.
The immediate reason for these decrees of industrial peonage is to be found in the visible breakdown of the Russian system of economic planning. The only way that Stalin knows to increase production is to command slave labor to produce or else. Whether these decrees will increase production or not, remains to be seen. If they do not, it will only hasten the day when Hitler decides to take over the direction of Soviet economy himself. If they do bring results, which is most unlikely, they can only serve to increase the thickness of the chains which bind the Russian worker in servitude today. In my next article in this series, I shall try to show the extent of the breakdown in Soviet economic planning and the reasons for this breakdown, for it must never be forgotten that the fundamental reasons for Stalin’s present policy are to be found in the internal weaknesses of Stalin’s regime.
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<hr width="100%" noshade="noshade" size="1">
<h2>Frank Demby</h2>
<h1>Economic Notes</h1>
<h3>(22 September 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_38" target="new">Vol. 5 No. 38</a>, 22 September 1941, p. 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">The Senate of the United States has outdone the House of Representatives in the race to see which branch of the “people’s” representatives can place the heavier tax burden on the masses. It’s all in a good cause – financing the “war for democracy”’ – so don’t mind if your tax bill is increased from three to seven times next year.</p>
<p>The Senate voted to lower exemptions on the income tax from $800 to $750 for single persons and from $2,000 a year to $1,500 a year for married persons. This means that about 6,000,000 more persons – 23,000,000 in all – will have to file an income tax in 1942 if this bill becomes law. It also means higher rates for those earning from $2,000 to $10,000. Altogether, over $300,000,000 will be raised by this device.</p>
<p>To show their seriousness in making the poor pay for the bosses’ war, the Senate lowered the excess profits tax almost $70,000,000. It then more than made up for this by raising the ante on excise and miscellaneous taxes some $85,000,000. This was done chiefly by raising the admission tax for amusements from 10 to 15 per cent, doubling the tax on local telephone bills (10 per cent instead of 5), imposing a 10 per cent tax on electric light bulbs, and a new tax on gas and oil appliances was included. The Senate has topped the House by more than $450,000,000 – of which almost 100 per cent falls on those who work for a living.</p>
<p>Whether this will satisfy the National Association of Manufacturers, who agitated for a national sales tax and a payroll tax, remains to be seen. It will certainly not meet with favor among the workers. A loud roar of protest from the trade unions can still make Congress retreat a few steps!</p>
<h4>*</h4>
<p class="fst">Meanwhile profits continue to soar for the big companies under the impetus of huge war orders. The following figures show quite clearly to all except the Congress of the United States that taxes on profits and corporations can still be increased SUBSTANTIALLY without denting profits very much (figures are for the first half of each fiscal year):</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<td>
<p class="smc"> </p>
</td>
<th colspan="3">
<p class="smc">Profits Before Tax Provisions</p>
</th>
<th colspan="3">
<p class="smc">Net Profit</p>
</th>
</tr>
<tr valign="bottom">
<th>
<p class="sm1">Industry</p>
</th>
<th>
<p class="smc">1941</p>
</th>
<th>
<p class="smc">1940</p>
</th>
<th>
<p class="smc">Pct.<br>
Inc.</p>
</th>
<th>
<p class="smc">1941</p>
</th>
<th>
<p class="smc">1940</p>
</th>
<th>
<p class="smc">Pct.<br>
Inc.</p>
</th>
</tr>
<tr valign="bottom">
<td>
<p class="sm1">Tire and Rubber<br>
(5 companies)</p>
</td>
<td>
<p class="smc">$50,675,509</p>
</td>
<td>
<p class="smc">$15,042,028</p>
</td>
<td>
<p class="smc">231</p>
</td>
<td>
<p class="smc">$20.501,250</p>
</td>
<td>
<p class="smc">$10,476;480</p>
</td>
<td>
<p class="smc">96</p>
</td>
</tr>
<tr valign="bottom">
<td>
<p class="sm1">Railroad Equipment<br>
(10 companies)</p>
</td>
<td>
<p class="smc"> 20,323,000</p>
</td>
<td>
<p class="smc"> 9,203,000</p>
</td>
<td>
<p class="smc">120</p>
</td>
<td>
<p class="smc"> 11,594,000</p>
</td>
<td>
<p class="smc"> 7,490,011</p>
</td>
<td>
<p class="smc">55</p>
</td>
</tr>
<tr valign="bottom">
<td>
<p class="sm1">Automotive Equipment<br>
(13 companies)</p>
</td>
<td>
<p class="smc"> 41,638,000</p>
</td>
<td>
<p class="smc"> 17,249,000</p>
</td>
<td>
<p class="smc">142</p>
</td>
<td>
<p class="smc"> 11,433,000</p>
</td>
<td>
<p class="smc">13,095,000</p>
</td>
<td>
<p class="smc">44</p>
</td>
</tr>
</tbody></table>
<p class="fst">And this is only a small sample of what goes on every day. The patriotism of the rich thrives on this sort of diet. But what about the rest of us?</p>
<h4>*</h4>
<p class="fst">The first measures so far taken to prevent inflation remain a farce. Where they amount to anything, they are, as we predicted, further blows at the standard of living of the masses. The 7 p.m. curfew for the purpose of rationing gasoline has not only not reduced the consumption of gas, but available estimates show on increase in the sales of gas stations during the past few weeks.</p>
<p>Meanwhile, Henderson’s order setting a price ceiling of 18.9 cents a gallon in the New York area has been honored more in the breach than by observance. This has brought a threat from “Little Flower” LaGuardia to have the mayors of various cities revoke the licenses of those dealers who are raising their prices. The only thing that will prevent a first-rate tempest from blowing up over this first example of what a war economy means is the sudden “discovery” that there are thousands of railroad oil tankers lying idle. The railroads and oil companies, were just having a private feud. The let-the-public-be-damned attitude of big business is due for a small curb in this instance.</p>
<h4>*</h4>
<p class="fst">On September 1, the new curbs on installment buying – aimed at restricting the purchases of durable consumers’ goods by the low income groups – went into effect. The Federal Reserve Board limited the maximum time for payments to 18 months and increased the down payments substantially in many cases. Sellers of these items report a brisk business; in some cases better than ever. Since the overwhelming majority of the $10,000,000,000 installment business is carried on among the workers and lower middle class, a serious restriction of this form of credit would mean a sharp decline in the standard of living of the masses. At present, the curbs on credit remain a joke – but watch out for the future!</p>
<h4>*</h4>
<p class="fst">On the organization front the President shuffled his “defense” agencies a bit. A super seven-man board, formally known as the Supply Priorities and Allocations Board, has been set up, charged with the responsibility of supervising the OPM and the other war bureaus. The SPAB is headed by Vice-President Wallace. The other members are: Secretary of War Stimson, Secretary of the Navy Knox, William S. Knudsen and Sidney Hillman of the OPM, Price Administrator Henderson (who relinquishes his control of civilian supply) and Dollar-a-Year-Man Donald Nelson, who will be the executive director. Thus does Roosevelt hope to remove the conflicts that have been going on in Washington and satisfy the critics of the production program. That this will not do the trick was indicated by the blast from Barney Baruch, chairman of the War Industries Board in World War I, who continues to insist on the necessity for a one-man head.</p>
<p>Meanwhile, another Wall Street speculator crashed the Washington dollar-a-year racket with the appointment of Floyd B. Odlum as director of the new Division of Contract Distribution. This replaces the Defense Contract Service and is supposed to see to it that small business gets sub-contracts on the huge war orders that the big corporations are getting and can’t fill. Fat chance! Small business is doomed and the war economy will hasten the process. After all, why should organizations controlled by big business order themselves to split their profits with a lot of little competitors? Monopoly capitalism doesn’t work that way. Not only can’t it create a decent peace economy; it can’t even establish an efficient war economy!</p>
<h4>*</h4>
<p class="fst"><em>Two developments along Wall Street are worth noting. We are very happy to report that Wendell L. Willkie, the man who made the supreme sacrifice of resigning from the presidency of Commonwealth & Southern to crusade against the dictatorial aims of the New Deal third term, is not doing so badly for himself. After becoming senior partner in the lucrative law firm of Willkie, Owen, Otis & Bailey, this junior partner of the unincorporated firm of Roosevelt & Willkie was elected a director of the Federal Insurance Co. on June 4. Now he is being proposed for a second directorship – this time in the very important firm controlled by the Lehman brothers, known as the Lehman Corp. We are confident that the October 15 meeting of the stockholders of the Lehman Corp. will elect Mr. Willkie a director. Just another example of how it pays to be a public-spirited citizen, provided, of course, you know the right people! Who says this isn’t the land of opportunity?</em></p>
<p>The other interesting development in Wall Street is further evidence of the tremendous opportunities that await the eager and patient youngster of today. The American Telephone & Telegraph Co., a Morgan subsidiary, which has conducted all its financing for the past 30 years through the House of Morgan, has announced that its forthcoming issue of $94,500,000 worth of debentures is to be subject to competitive bidding. Here’s a chance for you to make a million dollars in commission. All you have to do is to submit the lowest bid for handling these bonds. The lowest bidder must get the issue. Then all you have to do is to sell them. The bonds are absolutely gilt-edged. There should be no trouble at all. So far, however, there are only two syndicates in the field; one, a group of 28 powerful investment bankers, headed by Morgan Stanley & Co., Inc. (Mr. Morgan’s son-in-law is head man in this outfit); the other, one of the largest syndicates every assembled, comprising about 175 investment houses, headed by Halsey, Stuart & Co., Inc., and the Mellon Securities Corp. We are about $94,499,999 short of the required amount, else we would submit a bid. Maybe our readers can help us out.</p>
<p>Kidding aside, though, this is important because it shows that all attempts to maintain competition must remain solely between the big capitalists. And it can’t be otherwise, considering the kind of economic system we live under. One more proof of the necessity for socialism!</p>
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Frank Demby
Economic Notes
(22 September 1941)
From Labor Action, Vol. 5 No. 38, 22 September 1941, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Senate of the United States has outdone the House of Representatives in the race to see which branch of the “people’s” representatives can place the heavier tax burden on the masses. It’s all in a good cause – financing the “war for democracy”’ – so don’t mind if your tax bill is increased from three to seven times next year.
The Senate voted to lower exemptions on the income tax from $800 to $750 for single persons and from $2,000 a year to $1,500 a year for married persons. This means that about 6,000,000 more persons – 23,000,000 in all – will have to file an income tax in 1942 if this bill becomes law. It also means higher rates for those earning from $2,000 to $10,000. Altogether, over $300,000,000 will be raised by this device.
To show their seriousness in making the poor pay for the bosses’ war, the Senate lowered the excess profits tax almost $70,000,000. It then more than made up for this by raising the ante on excise and miscellaneous taxes some $85,000,000. This was done chiefly by raising the admission tax for amusements from 10 to 15 per cent, doubling the tax on local telephone bills (10 per cent instead of 5), imposing a 10 per cent tax on electric light bulbs, and a new tax on gas and oil appliances was included. The Senate has topped the House by more than $450,000,000 – of which almost 100 per cent falls on those who work for a living.
Whether this will satisfy the National Association of Manufacturers, who agitated for a national sales tax and a payroll tax, remains to be seen. It will certainly not meet with favor among the workers. A loud roar of protest from the trade unions can still make Congress retreat a few steps!
*
Meanwhile profits continue to soar for the big companies under the impetus of huge war orders. The following figures show quite clearly to all except the Congress of the United States that taxes on profits and corporations can still be increased SUBSTANTIALLY without denting profits very much (figures are for the first half of each fiscal year):
Profits Before Tax Provisions
Net Profit
Industry
1941
1940
Pct.
Inc.
1941
1940
Pct.
Inc.
Tire and Rubber
(5 companies)
$50,675,509
$15,042,028
231
$20.501,250
$10,476;480
96
Railroad Equipment
(10 companies)
20,323,000
9,203,000
120
11,594,000
7,490,011
55
Automotive Equipment
(13 companies)
41,638,000
17,249,000
142
11,433,000
13,095,000
44
And this is only a small sample of what goes on every day. The patriotism of the rich thrives on this sort of diet. But what about the rest of us?
*
The first measures so far taken to prevent inflation remain a farce. Where they amount to anything, they are, as we predicted, further blows at the standard of living of the masses. The 7 p.m. curfew for the purpose of rationing gasoline has not only not reduced the consumption of gas, but available estimates show on increase in the sales of gas stations during the past few weeks.
Meanwhile, Henderson’s order setting a price ceiling of 18.9 cents a gallon in the New York area has been honored more in the breach than by observance. This has brought a threat from “Little Flower” LaGuardia to have the mayors of various cities revoke the licenses of those dealers who are raising their prices. The only thing that will prevent a first-rate tempest from blowing up over this first example of what a war economy means is the sudden “discovery” that there are thousands of railroad oil tankers lying idle. The railroads and oil companies, were just having a private feud. The let-the-public-be-damned attitude of big business is due for a small curb in this instance.
*
On September 1, the new curbs on installment buying – aimed at restricting the purchases of durable consumers’ goods by the low income groups – went into effect. The Federal Reserve Board limited the maximum time for payments to 18 months and increased the down payments substantially in many cases. Sellers of these items report a brisk business; in some cases better than ever. Since the overwhelming majority of the $10,000,000,000 installment business is carried on among the workers and lower middle class, a serious restriction of this form of credit would mean a sharp decline in the standard of living of the masses. At present, the curbs on credit remain a joke – but watch out for the future!
*
On the organization front the President shuffled his “defense” agencies a bit. A super seven-man board, formally known as the Supply Priorities and Allocations Board, has been set up, charged with the responsibility of supervising the OPM and the other war bureaus. The SPAB is headed by Vice-President Wallace. The other members are: Secretary of War Stimson, Secretary of the Navy Knox, William S. Knudsen and Sidney Hillman of the OPM, Price Administrator Henderson (who relinquishes his control of civilian supply) and Dollar-a-Year-Man Donald Nelson, who will be the executive director. Thus does Roosevelt hope to remove the conflicts that have been going on in Washington and satisfy the critics of the production program. That this will not do the trick was indicated by the blast from Barney Baruch, chairman of the War Industries Board in World War I, who continues to insist on the necessity for a one-man head.
Meanwhile, another Wall Street speculator crashed the Washington dollar-a-year racket with the appointment of Floyd B. Odlum as director of the new Division of Contract Distribution. This replaces the Defense Contract Service and is supposed to see to it that small business gets sub-contracts on the huge war orders that the big corporations are getting and can’t fill. Fat chance! Small business is doomed and the war economy will hasten the process. After all, why should organizations controlled by big business order themselves to split their profits with a lot of little competitors? Monopoly capitalism doesn’t work that way. Not only can’t it create a decent peace economy; it can’t even establish an efficient war economy!
*
Two developments along Wall Street are worth noting. We are very happy to report that Wendell L. Willkie, the man who made the supreme sacrifice of resigning from the presidency of Commonwealth & Southern to crusade against the dictatorial aims of the New Deal third term, is not doing so badly for himself. After becoming senior partner in the lucrative law firm of Willkie, Owen, Otis & Bailey, this junior partner of the unincorporated firm of Roosevelt & Willkie was elected a director of the Federal Insurance Co. on June 4. Now he is being proposed for a second directorship – this time in the very important firm controlled by the Lehman brothers, known as the Lehman Corp. We are confident that the October 15 meeting of the stockholders of the Lehman Corp. will elect Mr. Willkie a director. Just another example of how it pays to be a public-spirited citizen, provided, of course, you know the right people! Who says this isn’t the land of opportunity?
The other interesting development in Wall Street is further evidence of the tremendous opportunities that await the eager and patient youngster of today. The American Telephone & Telegraph Co., a Morgan subsidiary, which has conducted all its financing for the past 30 years through the House of Morgan, has announced that its forthcoming issue of $94,500,000 worth of debentures is to be subject to competitive bidding. Here’s a chance for you to make a million dollars in commission. All you have to do is to submit the lowest bid for handling these bonds. The lowest bidder must get the issue. Then all you have to do is to sell them. The bonds are absolutely gilt-edged. There should be no trouble at all. So far, however, there are only two syndicates in the field; one, a group of 28 powerful investment bankers, headed by Morgan Stanley & Co., Inc. (Mr. Morgan’s son-in-law is head man in this outfit); the other, one of the largest syndicates every assembled, comprising about 175 investment houses, headed by Halsey, Stuart & Co., Inc., and the Mellon Securities Corp. We are about $94,499,999 short of the required amount, else we would submit a bid. Maybe our readers can help us out.
Kidding aside, though, this is important because it shows that all attempts to maintain competition must remain solely between the big capitalists. And it can’t be otherwise, considering the kind of economic system we live under. One more proof of the necessity for socialism!
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<h2>Frank Demby</h2>
<h1>America’s War Economy</h1>
<h3>(September 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue2.htm#ni41_09" target="new">Vol. VII No. 8 (Whole No. 57)</a>, September 1941, pp. 200–4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">AFTER MORE THAN two years of the Second World War, and after more than one year of the “Defense” Program, the single outstanding fact which emerges in any study of the economic situation in the United States is that America has entered upon a period of war economy. Already, approximately 25 per cent of the national income is being spent for purposes of armament. This amount will steadily increase until, before long, the major proportion of American resources, both human and material, will be devoted to the production of means of destruction. The American public is still almost blissfully unaware of what this will mean in terms of the daily routine of normal life. Rising prices, increased taxes, shortages of consumers goods, fast-increasing government controls – all, however, point to the inescapable fact that the “honeymoon” period is over. From now on, as the war economy develops further, the mass of the people will become well aware of what a war economy means. The standard of living will go down. The routine of normal life will be seriously interrupted due to the increasing dislocations produced by the insatiable appetite of the war machine. The atmosphere of crisis will become chronic, for war is but an expression of far-reaching social crisis.</p>
<p>The developing war economy brings in its train a series of important questions – political, social and economic in nature. I am particularly concerned, in this article, with some of the economic questions raised by the entrance of the United States into a period of war economy. Two basic questions immediately arise: Who pays for the war economy and how do they pay? Who profits from the war economy and how do they profit? These questions, in turn, give rise to a third basic summary question: What will be the effect of the war economy, in its short-term and long-run aspects, on the future development of American economy?</p>
<p>Early this year, in one of his fireside chats, the President warned the people that they would have to expect sacrifices. While the full implications of these sacrifices remain to be unfolded, the broad outlines, as well as some of the details, are already quite clear. The 1940 and 1941 revenue bills, for example, unmistakably reveal the intention of the government to make the working masses bear the brunt of the burden of financing the imperialist war effort of the United States.<br>
</p>
<h4>The Tax Bill</h4>
<p class="fst">At this writing, the final form of the 1941 revenue bill has not yet been established. The bill is “in conference,” as a result of several very important changes made by the Senate in the House version. However, it appears that the more drastic Senate version will more nearly approximate the final form of the Bill than that of the House. This will mean a sharp increase in the income tax on the lower income brackets, for the Senate has lowered the exemption for married persons from $2,000 (until 1940 it was $2,500) to $1,500, and for single individuals from $800 (until 1940 it was $1,000) to $750. By this measure 5,000,000 persons who never previously filed a federal income tax will now have to do so. Due to exemptions, it is expected that only about half this number will actually have to pay an income tax in 1942. Altogether, more than 20,000,000 people will now pay an income tax. This does not appear to be very drastic when it is recalled that about 60,000,000 people in the United States receive some form of income. But it must be remembered that the income tax was originally hailed as a progressive form of taxation because it was presumably based on <em>ability to pay</em>.</p>
<p>An income tax which broadens the base as the current bill proposes, begins to violate the “principle” of ability to pay. It definitely imposes severe hardships on those who can least afford to pay. Consider, for example, the case of an unmarried worker making $20 a week ($1,000 a year) – and there are many in this category. Before 1940 he did not pay any income tax. Under the 1940 act, he paid an income tax of $4.00. Under the Senate proposal for the 1941 act, this worker, who has great difficulty maintaining a bare subsistence level, <em>will have to pay an income tax of $21 – more than one week’s pay and an increase of 425 per cent in his income tax</em>. A married worker with no dependents earning $2,000 a year previously paid no income tax. Now he will have to pay an income tax of $42. Remember that this is only the income tax. The TNEC has estimated that approximately 25 per cent of the income of those in the lowest income brackets is already taxed indirectly through various forms of excise taxes.</p>
<p>The indirect tax burden is also be to increased – by more than one billion dollars. This will add tremendously to the tax load borne by the working class and the middle classes. <em>Virtually the same percentage of income received will be paid by the worker and the millionaire, when all forms of taxation are considered!</em><br>
</p>
<h4>Who Will Really Pay</h4>
<p class="fst">I do not have the space to analyze the various types of excise taxes proposed. Moreover, this field of taxation is much more subject to change than the income tax before the President affixes his signature. One example will suffice, however, to show the colossal injustice involved. Both the Senate and House have passed a provision calling for a $5 a year “Use” tax on owners of motor vehicles and boats. It is expected that more than $160,000,000 will be raised through this entirely new tax. This is one of the most vicious examples imaginable of a violation of the ability to pay principle in taxation. Firstly, in many cases, automobiles have assumed the proportions of a necessity to their owners. Why include boats (which category presumably covers yachts as well as motorboats) in the same provision with automobiles? Secondly, of the approximately 30,000,000 automobiles subject to this tax, there can be no doubt that the owners of the majority of these cars will find it difficult to pay this tax, whereas a $5.00 tax on the owner of a Packard or Cadillac will hardly put a dent in the owner’s pocketbook. The same is true for virtually every type of excise or miscellaneous tax proposed. The workers and the middle classes – those who work for a living – will finance the imperialist war. They are the ones who will make the real sacrifices under the war economy. In contrast, take the case of a man with an income of $1,000,000 a year, having two dependents. His tax is raised from $717,056.40 to $735,972.40 – an increase of almost $19,000, <em>but it still leaves him more than a quarter of a million dollars on which to struggle along!</em> The excise and miscellaneous taxes hardly figure in the tax burden of the wealthy at all. Nor does this take into account the well known fact that one of the biggest frauds in the present tax structure is the ability of the wealthy to dodge a considerable proportion of their tax burden through the many clever devices that their expensive lawyers have worked out. It was undoubtedly in response to pressure designed to eliminate one of the favorite tax-dodging methods of the rich – making property “gifts” to their spouses – that prompted the House Ways and Means Committee to propose the highly controversial joint returns. This would have compelled all married couples to file a single joint income tax return. The real burden of this device, too, would have fallen, as I pointed out in <strong>Labor Action</strong>, on the middle income groups and the upper strata of the working class. This is not the way to prevent tax-dodging by the wealthy. Higher estate and gift taxes would be a much more stringent proposal.<br>
</p>
<h4>Profits Insured by Congress</h4>
<p class="fst">If there still be any doubt that this tax bill is class legislation in favor of the bourgeoisie, a brief glance at the corporation income and excess profits taxes should dispel any lingering illusions. The present corporation income tax rate is 24 per cent of net profits. Slight increases in the surtax rate on corporations have been proposed – 5 per cent on the first $25,000 of net income and 6 per cent thereafter by the House, and 6 and 7 per cent respectively by the Senate. The Senate more than made up for its slight increase in the corporation surtax rate by eliminating the special 10 per cent tax on corporations not earning enough profits to come under the excess profits tax schedule passed by the House.</p>
<p>If taxation is to be based on ability to pay, what is obviously required here is a corporation income tax with progressively higher rates, corresponding to the personal income tax. Why should a Corporation like General Motors, with a net income around $200,000,000 a year, pay the same <em>rate</em> of income tax as a small corporation with a net income of $200,000 or less? And if the argument is made that the large corporation does pay a higher rate of tax because of the excess profits tax provisions, the answer is that fundamentally this is not the case since the excess profits tax remains a pure swindle. The proposed increase of 10 per cent in the excess profits tax schedule (making the tax run from 35 per cent to 60 per cent) is no more than a drop in the bucket, as a glance at current corporate earnings will show. Due to the maintenance of alternate methods of computing the excess profits tax by either the average earnings method or the capital investment method, most of the large corporations have been able to keep their excess profits down to very modest sums. Consequently, they pay a very small excess profits tax. Moreover, the new provision allowing a credit of 125 per cent for all new capital investment will actually lower the excess profits tax in some cases. An excess profits tax of anything less than 100 per cent, and without all the “liberalizing” amendments that have been introduced, cannot be considered a genuine excess profits tax.</p>
<p>The tax burdens outlined above represent only the beginning, severe though they are. As the war economy develops, taxes will continue to increase. Their pattern, however, is established, so long as the capitalist government remains in control of the situation. The motto in Washington is: Soak the poor; Go easy on the rich.<br>
</p>
<h4>What Big Business Demands</h4>
<p class="fst">The real program of the bourgeoisie is always that presented by the National Association of Manufacturers. In the field of taxation, the NAM has stated its reactionary program in unambiguous terms. Its representative, Livingston W. Houston, chairman of the finance committee of the NAM, testified last month before the Senate Finance Committee in favor of a general sales tax, as well as approving the broadening of the income tax base. The NAM, as well as other organizations representing industry and finance, have already indicated that their basic tax program for next year will not only include a general sales tax (the most reactionary type of tax possible) but also a payroll tax. Volumes of propaganda will be forthcoming during the next year in an attempt to show that the only way to prevent inflation and to preserve the credit of the United States is to tax more heavily the 75 per cent of income earners who get less than $5,000 a year. The surest way to tax this overwhelming majority of the population, in a manner which will make it “almost unnoticeable” to them, is through the sales tax and the payroll tax. So the propaganda will run. It will not mention, however, the really vital point – by levying a sales tax and/or a payroll tax the big bourgeoisie will be utilizing the emergency represented by the developing war economy to accelerate the process of wiping out the middle classes and to saddle the working class with a yoke which will make it impossible for them to breathe.</p>
<p>The answer to the question, Who pays for the war?, gives us already a pretty good picture of what a capitalist war economy looks like. It is hardly one which is designed to appeal to the broad, popular masses, whose support is so essential for the carrying out of the imperialist war program. But, as long as the masses are willing to delude themselves with the utterly false notion that Roosevelt can somehow or other stop fascism, the masses will make these sacrifices, even though with much grumbling.</p>
<p>If the masses can stomach the tax program, it does not at all mean that the remainder of the war economy picture appeals to them. The dislocations caused by the war economy are already becoming quite irritating. At the moment, though, these irritations are mere pin-pricks. What is really getting the goat of the masses, particularly the factory workers, is the absolutely fabulous profits which the big corporations are making – profits which are rolling in despite every attempt to conceal them and at a time when the workers are beginning to feel the pinch of a rising cost of living brought about by steadily rising prices. These huge profits cause an instinctive reaction on the part of workers. They violate their innate sense of fair play. “Why should the big bosses make millions while we sweat and slave for long hours and through an intensive speed-up, while we march and drill until we are utterly worn out in the conscript army, and while our wives are having an increasingly more difficult time making ends meet on account of prices going up practically every day?” These are becoming the daily thoughts of the workers. They are behind almost every strike that takes place. The workers feel that if the actions of the bosses represent good patriotism, they might as well get their “cut” of this temporary prosperity. Who knows how long this war boom will last? These sentiments are not the product of our imagination or wishful thinking. They are repeatedly testified to by eminent representatives of the bourgeoisie. The admittedly low morale of the army and the general apathy of the civilian population to the war are eloquent, if silent, confirmation of the deep-seated existence of this sentiment.<br>
</p>
<h4>The New Prosperity</h4>
<p class="fst">A war economy without huge profits, however, is simply something that is absolutely inconceivable to the rulers of America. Take these huge profits away and 99.9 per cent of their enthusiasm for war disappears. Reports of corporate earnings that appear daily in the financial sections of the newspapers make it appear that the good old days of 1928 and 1929 are here again. Led by the aircraft industry and munitions manufacturers, and closely followed by chemicals, steel, auto, rubber, petroleum, mining and construction, the boom in profits extends all the way through the consumers’ goods lines, like food, textiles and department stores, to that most bankrupt of all capitalist industries, the railroads. Even the public utilities show substantial increases in profits. Industry as a whole is expected in 1941 at least to equal the fantastic profits of 1929. In any cases, they will undoubtedly be exceeded.</p>
<p>To assume from this that the situation is fundamentally similar to the “Golden Age” of the late 1920s would be to make a fatal error. There are significant differences. This profit boom is occurring in a war economy. This means that the principal market for the products of industry is the government. Without “national defense” orders, which have already passed the huge total of $50,000,000,000, industry, particularly heavy industry, would collapse instantaneously. Along with this increasing dependence of industry on government goes a steady invasion of government by industry. The dollar-a-year men have overrun Washington like a swarm of locusts. Many of the leading and most capable representatives of big business have resigned from their official posts in their respective corporations to assume key posts in the OPM and other Washington bureaus. By sheer coincidence, since most of the dollar-a-year men come from the large and well established corporations, their corporations have received the lion’s share of government contracts. In other words, the market, which becomes increasingly the government, becomes increasingly monopolized by a handful of super-giants.<br>
</p>
<h4>Big Business Gains</h4>
<p class="fst">The tendency toward concentration of industry and profits which appears as a part of the normal development of capitalism in the epoch of imperialism – a process which clearly set in here in the United States during World War I – is thus reinforced and accentuated as the American war economy develops during World War II. Almost any industry becomes a good example of this tendency. Naturally, the war industries are the best examples. Let us take, for example, the chemical industry.</p>
<p>A review of twenty-two leading corporations indicates a combined net profit of $41,091,152 after income and excess profits taxes in the second quarter of the current year, against $36,396,307 correspondingly in 1940; net profit for the first quarter was $39,458,325, against $40,262,327 in 1940. (<strong>New York Times</strong>, September 14)</p>
<p>The second quarter of 1941 thus represents the highest profit ever made by the chemical industry in any year. For in the first six months of 1941, twenty-seven companies showed a combined profit of $88,180,705. This compares with $78,997,654 in the first half of 1940 and 172,500,859 in the second half of 1940. Eleven large companies (this excludes the income that duPont receives from General Motors dividends) earned $43,755,445 in the first half of 1941, as against a net profit of $45,075,800 in the first half of 1940. However, when duPont’s dividends from General Motors are included, the figures become $61,255,445 and $62,575,800 respectively. Whether duPont’s General Motors dividends are included or not (and General Motors, of course, is one of the six corporations that has received more than 50 per cent of all “defense” orders), the fact is inescapable that a small portion of the number of firms in the field receives the bulk of the orders and the bulk of the profits. If figures were available for the really big chemical concerns, like duPont, Allied Chemical and Dow Chemical, the concentration of profits would be much more startling.</p>
<p>As a matter of fact, the profits of the giant corporations are even greater than these figures indicate, for I have presented the official figures for net profits, without considering the earnings before provision is made for taxes. The following table (again of eleven leading chemical companies, excluding General Motors’ dividends to duPont) represents a typical picture:</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<td>
<p class="smc"><em>First half</em></p>
</td>
<td rowspan="3">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>1941</em></p>
</td>
<td rowspan="3">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>1940</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Earnings before taxes</p>
</td>
<td>
<p class="smc">$112,909,619</p>
</td>
<td>
<p class="smc">$64,673,449</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Federal taxes*</p>
</td>
<td>
<p class="smc"> 69,154,174</p>
</td>
<td>
<p class="smc"> 19,597,649</p>
</td>
</tr>
<tr>
<td colspan="5">
<p class="sm1"><small><small>* Income and excess profits taxes and <em>contingency reserves</em> against future<br>
tax increases.</small></small></p>
</td>
</tr>
</tbody></table>
<p class="fst">Earnings before taxes are thus 74 per cent higher in the first half of 1941 as compared with the first half of 1940. Many industries will show an even higher percentage increase in gross profits. The aircraft industry, for example, is well over 100 per cent. It is true that taxes have increased, but not nearly as much as appears from the figures presented. The joker, of course, is in the phrase, contingency reserves. Just what these are or how much they amount to is never revealed in statements of this kind. Corporation directors always explain to their stockholders that putting aside of such huge amounts for taxes on the ground that they don’t know just what kind of a tax bill Congress will pass and they have to be prepared, as good managers, for any emergency that may arise. Moreover, they usually add, we live in a period of uncertain times. Sound and conservative business practice dictates to us the necessity of storing up surpluses for the “rainy days” that may lie ahead. This may be sound business practice – if not on the grounds indicated by corporation directors – at least from the point of view of concealing fabulous profits. It might be added that profits statements never make any mention of huge salaries and bonuses paid to officers and directors. The tendency, however, is for these to increase and this becomes another effective method of concealing huge profits.<br>
</p>
<h4>Government and Business</h4>
<p class="fst">The profits picture is not complete without at least mentioning that the dependence of profits on government contracts brings with it a feature that can hardly be disagreeable to the corporations. Government contracts are always so worded, either through a cost-plus provision or some other device, that the huge profits of the big corporations are <em>guaranteed</em> by the government. There is no risk attached, except the risk that the war may end. The defenders of free private enterprise and “private initiative” may find the trend toward increasing government intervention in industry rather alarming – as indeed it is from some points of view – but they always conveniently forget to mention the one factor which endears state monopoly capitalism to the hearts of big business: profits are guaranteed and competition eliminated by the government.</p>
<p>The elimination of competition is essential for a smoothly functioning war economy. In a period such as this, anti-trust laws, which were always a joke, become an absolute farce. A by-product of this process is the rapid development of the tendency to eliminate the small business man. Not all the “defense clinics” or the appointment of Floyd B. Odlum of the huge investment trust, Atlas Corporation, to the task of increasing subcontracts, can conceal the fact that small business men are having increasing difficulty in getting the necessary raw materials. The operation of priorities necessarily means that the big corporations get bigger and the small ones are wiped out. To remain in business today, a manufacturer increasingly finds it necessary to have a private wire to Washington. But this the small business man cannot do, except in rare cases. The big manufacturer, however, has no difficulty at all in getting a hearing in Washington. He is already represented there by the dollar-a-year men.</p>
<p>Already, hundreds of small businesses have been forced to the wall. In the next six months, the figure will run into thousands. Even many large corporations are forced to close, at least temporarily, as the transition from a peace economy to a war economy is made. Government experts predict an increase of two million unemployed from this source alone during the next year.</p>
<p>In short, a war economy, while it may solve temporarily some of the problems of a dying capitalist order, only accentuates the basic contradictions inherent in capitalism. Lack of space alone prevents a detailed examination of all the economic effects of the developing war economy. Organizationally, the structure of capitalism is being changed in the direction of a far more complete development of state monopoly capitalism. The rapid rise in prices, the astronomical proportions of the government debt, the beginnings of rationing, the introduction of credit controls, the huge expansion of credit through increasing bank loans (accompanied by a decline in excess reserves), the rise of money in circulation to an all-time high – these are some of the indicators of the approaching storm.<br>
</p>
<h4>Inflationary Dangers</h4>
<p class="fst">Face to face with the threat of an uncontrolled inflation of gigantic proportions, the bourgeoisie stumbles around in its efforts to prevent it like a drunken man on a tightrope. Voluntary measures cannot bring a halt to rising prices. Bootlegging and quality depreciation continue apace. Tax anticipation notes and voluntary savings are a mere soporific. The American bourgeoisie must make up its mind in the course of the next few months to institute rigid price control and forced savings or the inflation will be beyond control. The American ruling class, this means, is squarely confronted with the dilemma: inflation or totalitarianism. There is no escape from this dilemma under capitalism. It is merely a question of time, and the time becomes increasingly short when the American bourgeoisie will be fairly stuck on one of the horns of this historical dilemma. And the worst of it is, from the capitalist point of view, that a pronounced trend in either direction will produce a revolutionary crisis.</p>
<p>At present we are confronted with a war economy running, at best, at 0 per cent efficiency. Production still lags way behind the demands of the war situation. Red tape and bureaucracy clog the wheels far more than is necessary under capitalism. The American war economy will become more effective. Of that there can be little doubt, although it may well require actual participation in a shooting war to bring this change about. By 1943–44, perhaps a bit sooner, the dénouément should be reached. And if, by some miracle, American capitalism weathers World War II without any fundamental changes having taken place, it will find that organizing the economy of the western hemisphere and of the entire world is a far more difficult task than that of organizing the domestic economy of the United States.</p>
<p>The thought of the transition to a peace-time economy makes the bourgeoisie shudder. And well they may, for a disillusioned and undefeated working class will hardly put up with the only solution the bourgeoisie can offer – a permanent war economy. The war economy cannot be made permanent without the establishment of an American fascism. And this requires far more than defeating Hitler. It means crushing the American workers.</p>
<p>Society has come to an absolute impasse, even in the richest and most highly developed of all capitalist countries, the United States. The fetters which bind the forces of production and condemn the overwhelming majority of the population to steadily increasing misery must be cast off. The only road that can avoid chaos and barbarism is the road that Marx outlined as the historic mission of the proletarian – the socialist emancipation of society. Much will undoubtedly happen before the issue is finally joined, but the decade of the 1940s will be decisive in determining whether mankind will march forward toward socialism or continue its relapse into barbarism.</p>
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Frank Demby
America’s War Economy
(September 1941)
From The New International, Vol. VII No. 8 (Whole No. 57), September 1941, pp. 200–4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
AFTER MORE THAN two years of the Second World War, and after more than one year of the “Defense” Program, the single outstanding fact which emerges in any study of the economic situation in the United States is that America has entered upon a period of war economy. Already, approximately 25 per cent of the national income is being spent for purposes of armament. This amount will steadily increase until, before long, the major proportion of American resources, both human and material, will be devoted to the production of means of destruction. The American public is still almost blissfully unaware of what this will mean in terms of the daily routine of normal life. Rising prices, increased taxes, shortages of consumers goods, fast-increasing government controls – all, however, point to the inescapable fact that the “honeymoon” period is over. From now on, as the war economy develops further, the mass of the people will become well aware of what a war economy means. The standard of living will go down. The routine of normal life will be seriously interrupted due to the increasing dislocations produced by the insatiable appetite of the war machine. The atmosphere of crisis will become chronic, for war is but an expression of far-reaching social crisis.
The developing war economy brings in its train a series of important questions – political, social and economic in nature. I am particularly concerned, in this article, with some of the economic questions raised by the entrance of the United States into a period of war economy. Two basic questions immediately arise: Who pays for the war economy and how do they pay? Who profits from the war economy and how do they profit? These questions, in turn, give rise to a third basic summary question: What will be the effect of the war economy, in its short-term and long-run aspects, on the future development of American economy?
Early this year, in one of his fireside chats, the President warned the people that they would have to expect sacrifices. While the full implications of these sacrifices remain to be unfolded, the broad outlines, as well as some of the details, are already quite clear. The 1940 and 1941 revenue bills, for example, unmistakably reveal the intention of the government to make the working masses bear the brunt of the burden of financing the imperialist war effort of the United States.
The Tax Bill
At this writing, the final form of the 1941 revenue bill has not yet been established. The bill is “in conference,” as a result of several very important changes made by the Senate in the House version. However, it appears that the more drastic Senate version will more nearly approximate the final form of the Bill than that of the House. This will mean a sharp increase in the income tax on the lower income brackets, for the Senate has lowered the exemption for married persons from $2,000 (until 1940 it was $2,500) to $1,500, and for single individuals from $800 (until 1940 it was $1,000) to $750. By this measure 5,000,000 persons who never previously filed a federal income tax will now have to do so. Due to exemptions, it is expected that only about half this number will actually have to pay an income tax in 1942. Altogether, more than 20,000,000 people will now pay an income tax. This does not appear to be very drastic when it is recalled that about 60,000,000 people in the United States receive some form of income. But it must be remembered that the income tax was originally hailed as a progressive form of taxation because it was presumably based on ability to pay.
An income tax which broadens the base as the current bill proposes, begins to violate the “principle” of ability to pay. It definitely imposes severe hardships on those who can least afford to pay. Consider, for example, the case of an unmarried worker making $20 a week ($1,000 a year) – and there are many in this category. Before 1940 he did not pay any income tax. Under the 1940 act, he paid an income tax of $4.00. Under the Senate proposal for the 1941 act, this worker, who has great difficulty maintaining a bare subsistence level, will have to pay an income tax of $21 – more than one week’s pay and an increase of 425 per cent in his income tax. A married worker with no dependents earning $2,000 a year previously paid no income tax. Now he will have to pay an income tax of $42. Remember that this is only the income tax. The TNEC has estimated that approximately 25 per cent of the income of those in the lowest income brackets is already taxed indirectly through various forms of excise taxes.
The indirect tax burden is also be to increased – by more than one billion dollars. This will add tremendously to the tax load borne by the working class and the middle classes. Virtually the same percentage of income received will be paid by the worker and the millionaire, when all forms of taxation are considered!
Who Will Really Pay
I do not have the space to analyze the various types of excise taxes proposed. Moreover, this field of taxation is much more subject to change than the income tax before the President affixes his signature. One example will suffice, however, to show the colossal injustice involved. Both the Senate and House have passed a provision calling for a $5 a year “Use” tax on owners of motor vehicles and boats. It is expected that more than $160,000,000 will be raised through this entirely new tax. This is one of the most vicious examples imaginable of a violation of the ability to pay principle in taxation. Firstly, in many cases, automobiles have assumed the proportions of a necessity to their owners. Why include boats (which category presumably covers yachts as well as motorboats) in the same provision with automobiles? Secondly, of the approximately 30,000,000 automobiles subject to this tax, there can be no doubt that the owners of the majority of these cars will find it difficult to pay this tax, whereas a $5.00 tax on the owner of a Packard or Cadillac will hardly put a dent in the owner’s pocketbook. The same is true for virtually every type of excise or miscellaneous tax proposed. The workers and the middle classes – those who work for a living – will finance the imperialist war. They are the ones who will make the real sacrifices under the war economy. In contrast, take the case of a man with an income of $1,000,000 a year, having two dependents. His tax is raised from $717,056.40 to $735,972.40 – an increase of almost $19,000, but it still leaves him more than a quarter of a million dollars on which to struggle along! The excise and miscellaneous taxes hardly figure in the tax burden of the wealthy at all. Nor does this take into account the well known fact that one of the biggest frauds in the present tax structure is the ability of the wealthy to dodge a considerable proportion of their tax burden through the many clever devices that their expensive lawyers have worked out. It was undoubtedly in response to pressure designed to eliminate one of the favorite tax-dodging methods of the rich – making property “gifts” to their spouses – that prompted the House Ways and Means Committee to propose the highly controversial joint returns. This would have compelled all married couples to file a single joint income tax return. The real burden of this device, too, would have fallen, as I pointed out in Labor Action, on the middle income groups and the upper strata of the working class. This is not the way to prevent tax-dodging by the wealthy. Higher estate and gift taxes would be a much more stringent proposal.
Profits Insured by Congress
If there still be any doubt that this tax bill is class legislation in favor of the bourgeoisie, a brief glance at the corporation income and excess profits taxes should dispel any lingering illusions. The present corporation income tax rate is 24 per cent of net profits. Slight increases in the surtax rate on corporations have been proposed – 5 per cent on the first $25,000 of net income and 6 per cent thereafter by the House, and 6 and 7 per cent respectively by the Senate. The Senate more than made up for its slight increase in the corporation surtax rate by eliminating the special 10 per cent tax on corporations not earning enough profits to come under the excess profits tax schedule passed by the House.
If taxation is to be based on ability to pay, what is obviously required here is a corporation income tax with progressively higher rates, corresponding to the personal income tax. Why should a Corporation like General Motors, with a net income around $200,000,000 a year, pay the same rate of income tax as a small corporation with a net income of $200,000 or less? And if the argument is made that the large corporation does pay a higher rate of tax because of the excess profits tax provisions, the answer is that fundamentally this is not the case since the excess profits tax remains a pure swindle. The proposed increase of 10 per cent in the excess profits tax schedule (making the tax run from 35 per cent to 60 per cent) is no more than a drop in the bucket, as a glance at current corporate earnings will show. Due to the maintenance of alternate methods of computing the excess profits tax by either the average earnings method or the capital investment method, most of the large corporations have been able to keep their excess profits down to very modest sums. Consequently, they pay a very small excess profits tax. Moreover, the new provision allowing a credit of 125 per cent for all new capital investment will actually lower the excess profits tax in some cases. An excess profits tax of anything less than 100 per cent, and without all the “liberalizing” amendments that have been introduced, cannot be considered a genuine excess profits tax.
The tax burdens outlined above represent only the beginning, severe though they are. As the war economy develops, taxes will continue to increase. Their pattern, however, is established, so long as the capitalist government remains in control of the situation. The motto in Washington is: Soak the poor; Go easy on the rich.
What Big Business Demands
The real program of the bourgeoisie is always that presented by the National Association of Manufacturers. In the field of taxation, the NAM has stated its reactionary program in unambiguous terms. Its representative, Livingston W. Houston, chairman of the finance committee of the NAM, testified last month before the Senate Finance Committee in favor of a general sales tax, as well as approving the broadening of the income tax base. The NAM, as well as other organizations representing industry and finance, have already indicated that their basic tax program for next year will not only include a general sales tax (the most reactionary type of tax possible) but also a payroll tax. Volumes of propaganda will be forthcoming during the next year in an attempt to show that the only way to prevent inflation and to preserve the credit of the United States is to tax more heavily the 75 per cent of income earners who get less than $5,000 a year. The surest way to tax this overwhelming majority of the population, in a manner which will make it “almost unnoticeable” to them, is through the sales tax and the payroll tax. So the propaganda will run. It will not mention, however, the really vital point – by levying a sales tax and/or a payroll tax the big bourgeoisie will be utilizing the emergency represented by the developing war economy to accelerate the process of wiping out the middle classes and to saddle the working class with a yoke which will make it impossible for them to breathe.
The answer to the question, Who pays for the war?, gives us already a pretty good picture of what a capitalist war economy looks like. It is hardly one which is designed to appeal to the broad, popular masses, whose support is so essential for the carrying out of the imperialist war program. But, as long as the masses are willing to delude themselves with the utterly false notion that Roosevelt can somehow or other stop fascism, the masses will make these sacrifices, even though with much grumbling.
If the masses can stomach the tax program, it does not at all mean that the remainder of the war economy picture appeals to them. The dislocations caused by the war economy are already becoming quite irritating. At the moment, though, these irritations are mere pin-pricks. What is really getting the goat of the masses, particularly the factory workers, is the absolutely fabulous profits which the big corporations are making – profits which are rolling in despite every attempt to conceal them and at a time when the workers are beginning to feel the pinch of a rising cost of living brought about by steadily rising prices. These huge profits cause an instinctive reaction on the part of workers. They violate their innate sense of fair play. “Why should the big bosses make millions while we sweat and slave for long hours and through an intensive speed-up, while we march and drill until we are utterly worn out in the conscript army, and while our wives are having an increasingly more difficult time making ends meet on account of prices going up practically every day?” These are becoming the daily thoughts of the workers. They are behind almost every strike that takes place. The workers feel that if the actions of the bosses represent good patriotism, they might as well get their “cut” of this temporary prosperity. Who knows how long this war boom will last? These sentiments are not the product of our imagination or wishful thinking. They are repeatedly testified to by eminent representatives of the bourgeoisie. The admittedly low morale of the army and the general apathy of the civilian population to the war are eloquent, if silent, confirmation of the deep-seated existence of this sentiment.
The New Prosperity
A war economy without huge profits, however, is simply something that is absolutely inconceivable to the rulers of America. Take these huge profits away and 99.9 per cent of their enthusiasm for war disappears. Reports of corporate earnings that appear daily in the financial sections of the newspapers make it appear that the good old days of 1928 and 1929 are here again. Led by the aircraft industry and munitions manufacturers, and closely followed by chemicals, steel, auto, rubber, petroleum, mining and construction, the boom in profits extends all the way through the consumers’ goods lines, like food, textiles and department stores, to that most bankrupt of all capitalist industries, the railroads. Even the public utilities show substantial increases in profits. Industry as a whole is expected in 1941 at least to equal the fantastic profits of 1929. In any cases, they will undoubtedly be exceeded.
To assume from this that the situation is fundamentally similar to the “Golden Age” of the late 1920s would be to make a fatal error. There are significant differences. This profit boom is occurring in a war economy. This means that the principal market for the products of industry is the government. Without “national defense” orders, which have already passed the huge total of $50,000,000,000, industry, particularly heavy industry, would collapse instantaneously. Along with this increasing dependence of industry on government goes a steady invasion of government by industry. The dollar-a-year men have overrun Washington like a swarm of locusts. Many of the leading and most capable representatives of big business have resigned from their official posts in their respective corporations to assume key posts in the OPM and other Washington bureaus. By sheer coincidence, since most of the dollar-a-year men come from the large and well established corporations, their corporations have received the lion’s share of government contracts. In other words, the market, which becomes increasingly the government, becomes increasingly monopolized by a handful of super-giants.
Big Business Gains
The tendency toward concentration of industry and profits which appears as a part of the normal development of capitalism in the epoch of imperialism – a process which clearly set in here in the United States during World War I – is thus reinforced and accentuated as the American war economy develops during World War II. Almost any industry becomes a good example of this tendency. Naturally, the war industries are the best examples. Let us take, for example, the chemical industry.
A review of twenty-two leading corporations indicates a combined net profit of $41,091,152 after income and excess profits taxes in the second quarter of the current year, against $36,396,307 correspondingly in 1940; net profit for the first quarter was $39,458,325, against $40,262,327 in 1940. (New York Times, September 14)
The second quarter of 1941 thus represents the highest profit ever made by the chemical industry in any year. For in the first six months of 1941, twenty-seven companies showed a combined profit of $88,180,705. This compares with $78,997,654 in the first half of 1940 and 172,500,859 in the second half of 1940. Eleven large companies (this excludes the income that duPont receives from General Motors dividends) earned $43,755,445 in the first half of 1941, as against a net profit of $45,075,800 in the first half of 1940. However, when duPont’s dividends from General Motors are included, the figures become $61,255,445 and $62,575,800 respectively. Whether duPont’s General Motors dividends are included or not (and General Motors, of course, is one of the six corporations that has received more than 50 per cent of all “defense” orders), the fact is inescapable that a small portion of the number of firms in the field receives the bulk of the orders and the bulk of the profits. If figures were available for the really big chemical concerns, like duPont, Allied Chemical and Dow Chemical, the concentration of profits would be much more startling.
As a matter of fact, the profits of the giant corporations are even greater than these figures indicate, for I have presented the official figures for net profits, without considering the earnings before provision is made for taxes. The following table (again of eleven leading chemical companies, excluding General Motors’ dividends to duPont) represents a typical picture:
First half
1941
1940
Earnings before taxes
$112,909,619
$64,673,449
Federal taxes*
69,154,174
19,597,649
* Income and excess profits taxes and contingency reserves against future
tax increases.
Earnings before taxes are thus 74 per cent higher in the first half of 1941 as compared with the first half of 1940. Many industries will show an even higher percentage increase in gross profits. The aircraft industry, for example, is well over 100 per cent. It is true that taxes have increased, but not nearly as much as appears from the figures presented. The joker, of course, is in the phrase, contingency reserves. Just what these are or how much they amount to is never revealed in statements of this kind. Corporation directors always explain to their stockholders that putting aside of such huge amounts for taxes on the ground that they don’t know just what kind of a tax bill Congress will pass and they have to be prepared, as good managers, for any emergency that may arise. Moreover, they usually add, we live in a period of uncertain times. Sound and conservative business practice dictates to us the necessity of storing up surpluses for the “rainy days” that may lie ahead. This may be sound business practice – if not on the grounds indicated by corporation directors – at least from the point of view of concealing fabulous profits. It might be added that profits statements never make any mention of huge salaries and bonuses paid to officers and directors. The tendency, however, is for these to increase and this becomes another effective method of concealing huge profits.
Government and Business
The profits picture is not complete without at least mentioning that the dependence of profits on government contracts brings with it a feature that can hardly be disagreeable to the corporations. Government contracts are always so worded, either through a cost-plus provision or some other device, that the huge profits of the big corporations are guaranteed by the government. There is no risk attached, except the risk that the war may end. The defenders of free private enterprise and “private initiative” may find the trend toward increasing government intervention in industry rather alarming – as indeed it is from some points of view – but they always conveniently forget to mention the one factor which endears state monopoly capitalism to the hearts of big business: profits are guaranteed and competition eliminated by the government.
The elimination of competition is essential for a smoothly functioning war economy. In a period such as this, anti-trust laws, which were always a joke, become an absolute farce. A by-product of this process is the rapid development of the tendency to eliminate the small business man. Not all the “defense clinics” or the appointment of Floyd B. Odlum of the huge investment trust, Atlas Corporation, to the task of increasing subcontracts, can conceal the fact that small business men are having increasing difficulty in getting the necessary raw materials. The operation of priorities necessarily means that the big corporations get bigger and the small ones are wiped out. To remain in business today, a manufacturer increasingly finds it necessary to have a private wire to Washington. But this the small business man cannot do, except in rare cases. The big manufacturer, however, has no difficulty at all in getting a hearing in Washington. He is already represented there by the dollar-a-year men.
Already, hundreds of small businesses have been forced to the wall. In the next six months, the figure will run into thousands. Even many large corporations are forced to close, at least temporarily, as the transition from a peace economy to a war economy is made. Government experts predict an increase of two million unemployed from this source alone during the next year.
In short, a war economy, while it may solve temporarily some of the problems of a dying capitalist order, only accentuates the basic contradictions inherent in capitalism. Lack of space alone prevents a detailed examination of all the economic effects of the developing war economy. Organizationally, the structure of capitalism is being changed in the direction of a far more complete development of state monopoly capitalism. The rapid rise in prices, the astronomical proportions of the government debt, the beginnings of rationing, the introduction of credit controls, the huge expansion of credit through increasing bank loans (accompanied by a decline in excess reserves), the rise of money in circulation to an all-time high – these are some of the indicators of the approaching storm.
Inflationary Dangers
Face to face with the threat of an uncontrolled inflation of gigantic proportions, the bourgeoisie stumbles around in its efforts to prevent it like a drunken man on a tightrope. Voluntary measures cannot bring a halt to rising prices. Bootlegging and quality depreciation continue apace. Tax anticipation notes and voluntary savings are a mere soporific. The American bourgeoisie must make up its mind in the course of the next few months to institute rigid price control and forced savings or the inflation will be beyond control. The American ruling class, this means, is squarely confronted with the dilemma: inflation or totalitarianism. There is no escape from this dilemma under capitalism. It is merely a question of time, and the time becomes increasingly short when the American bourgeoisie will be fairly stuck on one of the horns of this historical dilemma. And the worst of it is, from the capitalist point of view, that a pronounced trend in either direction will produce a revolutionary crisis.
At present we are confronted with a war economy running, at best, at 0 per cent efficiency. Production still lags way behind the demands of the war situation. Red tape and bureaucracy clog the wheels far more than is necessary under capitalism. The American war economy will become more effective. Of that there can be little doubt, although it may well require actual participation in a shooting war to bring this change about. By 1943–44, perhaps a bit sooner, the dénouément should be reached. And if, by some miracle, American capitalism weathers World War II without any fundamental changes having taken place, it will find that organizing the economy of the western hemisphere and of the entire world is a far more difficult task than that of organizing the domestic economy of the United States.
The thought of the transition to a peace-time economy makes the bourgeoisie shudder. And well they may, for a disillusioned and undefeated working class will hardly put up with the only solution the bourgeoisie can offer – a permanent war economy. The war economy cannot be made permanent without the establishment of an American fascism. And this requires far more than defeating Hitler. It means crushing the American workers.
Society has come to an absolute impasse, even in the richest and most highly developed of all capitalist countries, the United States. The fetters which bind the forces of production and condemn the overwhelming majority of the population to steadily increasing misery must be cast off. The only road that can avoid chaos and barbarism is the road that Marx outlined as the historic mission of the proletarian – the socialist emancipation of society. Much will undoubtedly happen before the issue is finally joined, but the decade of the 1940s will be decisive in determining whether mankind will march forward toward socialism or continue its relapse into barbarism.
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<h2>Walter J. Oakes</h2>
<h1>Toward a Permanent War Economy?</h1>
<h3>(February 1944)</h3>
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<p class="info">Walter J. Oakes, <em>Toward a Permanent War Economy?</em>, <strong>Politics</strong>, February 1944.<br>
Transcribed by Ernest Haberkern (Center for Socialist History, Berkeley, California).<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">As this article goes to press, the <strong>Wall Street Journal</strong> of Jan. 6 carries a lead story which strikingly confirms one of Mr. Oakes’ main points: the scope of the planning now going on for World War III. The <strong>Journal</strong>’s Washington correspondent writes:</p>
<p class="quoteb">The State Department is now considering a big post-armistice stockpile scheme. Under this proposal, which has now reached Secretary Condell Hull, the Government would accumulate a hoard of strategic materials, mostly from imports, over a <em>period</em> of some five years after the war. Goods like crude rubber and industrial diamonds would be stored above ground in warehouses; commodities such as tin and petroleum would be amassed below ground in vaults, mines and subterranean reservoirs.</p>
<p class="quote">Such a program, say its advocates, would provide a hedge against any future national ‘emergency’ (presumably, the next war). In addition, it would provide a balance for the large-scale American export program that is in prospect for world reconstruction, offering a way for debtor nations to repay public loans advanced by this country.</p>
<p class="fst">The <strong>Journal</strong> also reports that Vice-Chairman Batt of the War Production Board, speaking the same day in Chicago, urged adoption of a similar plan. Indicating the idea has had “more than casual official consideration”, Batt suggested it as “a novel means of approaching a balance in our foreign trade picture”.</p>
<p>This last argument shows the intimate connection that is coming to exist between war-making and economic stability. The riddle of how the impoverished, relatively backward rest of the world is going to pay for American exports of goods and capital, is neatly solved by importing vast quantities of raw materials and “sterilizing” them, much as the gold at Fort Knox is sterilized, by burying them in stockpiles withdrawn from the market. War and the prospect of war offer the means for performing this useful economic trick. In war modern capitalism has, as this article shows, an economic stabilizer better than pyramids, cathedrals and WPA rolled into one. – Ed. <strong>Politics</strong>, 1944.</p>
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<p class="fst">AS World War II enters its climactic stage, it becomes increasingly clear that this is not the “War To End All Wars.” Already there have been many warnings of the “possibility of another war.” A growing cynicism is abroad concerning the prospects of durable peace. World War III is not only a distinct possibility, it is inevitable as long as the world’s social structure remains one of capitalist imperialism. As Dorothy Thompson puts it in her column of December 6, 1943, “All grand alliances (referring to the Roosevelt-Stalin-Churchill meeting), have existed only as long as it was necessary to win a war, or protect themselves against the aggressions of other powers. Once all enemies are defeated, the only potential enemies left are members of the grand alliance themselves.” In more scientific terms – the contradictions which led to this war have not been eliminated: if anything, they have been intensified.</p>
<p>More revealing than any theoretical analysis concerning its inevitability are the obvious preparations that are now being made for World War III. One may dismiss the psychological preparations, designed to condition the population to accept the inevitability of the next war, as too intangible to evaluate. One may shrug aside the political preparations, which are clearly inherent in the power politics now being played by the leaders of the United Nations, on the ground that this is <em>realpolitik</em> in a materialistic world. But it is impossible to overlook the unanimity with which the business community approves the maintenance of a large standing army, universal military service and an air force second to none as preconditions of America’s “security” in the post-war world. Disarmament, the utopian pipedream of Geneva, is to be abandoned as a slogan after this war – except for the conquered enemy.</p>
<p>Important as are the above more or less obvious types of preparation, currently concealed economic preparations are decisive. In the United States, this question is intimately bound up with the problems of reconversion. Much more is at stake than the question of what to do with the huge government-owned war plants (estimated at $20 billion by the end of the war). A plan for reconversion, no matter how loose and flexible, must be guided by some Indication of the type of post-war world that is desired. If war within the life of the next generation is a probability, then it must be planned for on the basis of the lessons learned from this war.</p>
<p>American imperialism, for example, has no intention of entering another war without adequate stockpiles of all critical and strategic military materials. And so we have Senate Bill 1582 (introduced early in December 1943 by Senator Scrugham of Nevada) whose stated purpose is:</p>
<p class="quoteb"><em>“To assure an adequate supply of strategic and critical minerals for any future emergency by holding intact in the post-war period all stock piles surviving the present war owned by Government agencies and by necessary augmentation thereof primarily from domestic sources.”</em></p>
<p class="fst">The “future emergency” is subsequently defined as “a total war of three years’ duration, or of any equivalent emergency.”</p>
<p>In the case of copper, an article in the National Industrial Conference Board’s <strong>Economic Record</strong> (November 1943) reveals what would be involved. “As current usage of copper probably is at least 1.5 million tons annually, a supply for a three-year war, as proposed in the Scrugham bill, might require 4.5 million tons. This amount is nearly equal to the entire domestic output of new copper in the Thirties, or four years’ output at the peak mining rate of 1.07 million tons in 1942.” While the Scrugham bill leaves the question of cost open, it is estimated that the copper program alone would cost well above $1 billion. Clearly, economic preparations for World War III are beyond the stage of informal discussion.</p>
<p>The big question which all discussions of post-war economy try to answer is, of course: How to achieve full employment? The sad experiences following the last war, culminating in the world-wide depression of the 1930s, give the problem an understandable urgency. Public interest in the question is certainly more widespread than ever before. What better tribute to American advertising genius, or what more fitting commentary on the political and economic naivete of the American people, could there be than the $50,000 contest now being held by the Pabst Brewing Company, in commemoration of its 100th birthday, for the best plans to achieve full post-war employment?</p>
<p>There is an urgent political necessity for capitalism to achieve the abolition of unemployment. It is motivated by the inevitable slack in private investment in order to maintain the savings-investment equilibrium.</p>
<p>Assuming, therefore, that my major thesis is correct and that government balancing operations in the future will consist largely of socially sanctioned war outlays, the question arises: how will the future laws of capitalist accumulation differ from the past?<br>
</p>
<h4>The Future Laws of Capitalist Accumulation</h4>
<p class="fst">In the past, the dynamics of capital accumulation have caused a polarization of classes. (On the one hand, concentration of wealth in fewer and fewer monopoly capitalists; on the other, a steady increase in the size of the working class, both factory and non-factory, relative to other classes). The war, far from interrupting, has accentuated both these trends – in general, at the expense of the middle classes.</p>
<p>Although this law will still hold true in the epoch of Permanent War Economy, the increased State military outlays 1 as compared with prewar State expenditures) will have the effect of slowing up the <em>rate</em> of class polarization. This is due not so much to the different economic nature of these expenditures as to their <em>political</em> character. Their purpose, it must be remembered, is to stabilize the economy; i.e., by State intervention to freeze class relations <em>and simultaneously the existing class structure.</em> That is why the post-war size of the labor force and the national income will be considerably below that achieved during the war. Otherwise, the magnitude of post-war war outlays would be at a level so high as virtually to guarantee widespread political opposition on the part of the capitalist class.</p>
<p>The major revision that will have to be made in the Marxian analysis of capitalist accumulation is in the famous law, that an increase in capital means an increase in the industrial reserve army. If the Permanent War Economy succeeds in stabilizing the economy at a high level, unemployment will be eliminated, but only through employment in lines that are economically unproductive. <em>Thus capitalist accumulation, instead of bringing about an increase in unemployment, will have as its major consequence a decline in the standard of living.</em></p>
<p>The decline in the standard of living will be similar in nature to that which is just beginning to take place in wartime. For example, until about the middle of 1942 it was possible for the developing American war economy to support a substantial increase in military production at the same time that a small, but significant, rise occurred in average civilian standards of living. This was due, for the most part, to the fact that in 1939 there was considerable underemployment of both men and resources. Once more or less full employment was attained, however, further increases in military production could only be achieved at the expense of the civilian sector of the economy. Most civilians have not yet felt the full impact of this development because of the accumulation of huge inventories of consumers’ goods in the hands of both merchants and consumers. As these inventories are depleted and as consumers’ durable goods wear out, the standard of living begins to decline noticeably. If the war continues throughout 1944, with no significant over-all cutbacks in military programs, the decline is apt to become precipitate.</p>
<p>The Permanent War Economy will operate much the same way. At first, of course, there may be a rise in the average standard of living if the levels of national income reached, are reasonably close to those now maintained and if, simultaneously, there is a sharp reduction in total miiltary out lays (inclusive of expenditures for “relief and rehabilitation”). Within a relatively short periGd, however, assuming that the economy is stabilized at the desired level with a minimum of unproductive governmental expenditures, the maintenance of economic equilibrium will require a steadily rising curve of military outlays. The decline in the average standard of living of the workers, at first relative, will then become absolute – particularly on a world scale as all na. tions adapt their internal economies to conform with the requirements of the new order based on an international Permanent War Economy. Naturally, the decline will not be a descending straight line; it will have its ups and downs, but the long-term trend will definitely be downward.</p>
<p>Three major assumptions are implicit in the above analysis. <em>First</em>, any significant increases in real national income or total product beyond the reconversion equilibrium level are excluded, due to the capitalist nature of production. This ties in with the reasons why continued accumulation of capital is necessary and why these additional increments of capitalist accumulation require more or less corresponding (socially acceptable) economically unproductive State expenditures. <em>Second</em>, while a portion of the State’s consumption of accumulated unpaid labor may take the form of public works, for reasons previously stated only a minor portion of such public works will be capable of raising the standard of living; and these will decline in importance as direct war outlays increase. <em>Third</em>, the possible effects of alternative fiscal policies (financing through difference:methods of taxation and borrowing ) to support the Permanent War Economy are excluded as not affecting the basic anlysis; although certain methods may markedly accelerate the inflationary process, while others may permit American entry into World War III without having experienced a violent inflation.</p>
<p>Capitalist society is forever seeking a “stable and safe” equilibrium – one which eliminates unemployment or, at least, reduces it to negligible proportions (“stable”); and one which is generally acceptable or, at least, politically workable (“safe”).</p>
<p>This is, of course, hardly a new problem. Instability has been a dominant characteristic of capitalism particularly since technological advances in industry have become marked, a matter of some fifty to one hundred years. It is only in recent years, however, especially since the Bolshevik Revolution plainly demonstrated that capitalism is a mortal society and can be succeeded by a different set of socio-economic institutions, that the problem has taken on a new urgency. Theoretical analysis indicates, and the observations of capitalists confirm, that capitalism would have great difficulty in surviving a depression comparable in severity to the recent one. This must be avoided at all costs, say the more enlightened members of the bourgeoisie, even if far-reaching structural changes are called for. True, this type of motivation has led to fascism and can easily do :so again. It is assumed, however, that the ruling class prefers to stave off the advent of fascism as long as possible, and that there is sufficient evidence to indicate that what I have termed “a Permanent War Economy” is coming to be a much more powerful stimulus than the increasingly-repeated question: “If we can employ everyone in wartime, why can’t we do as much in peacetime?” The fact is that the capitalist system cannot stand the strain of another siege of unemployment comparable. to 1930-1940. It does not require a far-seeing statesman to picture the revolutionary dynamite inherent in a <em>situation</em> where 10-12 million people are unemployed. And this is a conservative estimate of the size of post-war unemployment, <em>if the traditional methods, such as those used after the last war, are followed this time.</em></p>
<p>The traditonial methods (consisting essentially of trying to restore the <em>status quo ante bellum</em> as rapidly as possible) will not be followed. Whether Roosevelt presides over the transition period or not, too much water has flowed under the bridge to permit an uncontrolled post-war inflation followed by a resounding and catastrophic depression. This much, at least, the better minds amongst the capitalists see. The State will have to intervene. It is a question of how much and in what form.</p>
<p>Here we encounter a problem in semantics. State intervention, as I shall show below, must take the form of maintaining a Permanent War Economy. What is a “war economy”? In an extreme <em>sense</em>, involving the reduction of civilian standards of living to the bedrock minimum in order to permit the maximum expansion of war output, we have not, of course, a war economy today. Russia, since the consolidation of Stalin’s dictatorship, and Germany, since the consolidation of Hitler’s dictatorship, both in “peace” and in the period of military hostilities, have experienced this type of war economy. They are the only countries in modern times to have experienced a “genuine” war economy, with the possible exception of Japan.</p>
<p>A war economy, as I use the term, is not determined by the expenditure of a given percentage of a nation’s resources and productive energies for military purposes. This determines only the <em>kind</em> of war economy – good, bad, or indifferent from the point of view of efficiency in war-making. The question of amount, however, is obviously relevant. At all times, there are <em>some</em> expenditures for war or “national defense.” How much must the government spend for, such purposes before we can say a war economy exists? In general terms, the problem can be answered as follows: <em>a war economy exists whenever the government’s expenditures for war (or “national defense”) become a legitimate and significant end-purpose of economic activity.</em> The degree of war expenditures required before such activities become <em>significant</em> obviously varies with the size and composition of the national income and the stock of accumulated capital. Nevertheless, the problem is capable of theoretical analysis and statistical measurement.</p>
<p>Until the present period, in America at least, only one legitimate end-purpose of economic activity has been recognized (in theory) ; namely, the satisfaction of human wants or, less euphemistically, the production and distribution of consumers’ goods and services. In wartime, of course, the legitimacy of war expenditures is never questioned, except by those few who question the progressiveness of the aims of the war. We are now being prepared, however, to recognize as a legitimate economic activity <em>peacetime</em> expenditures for war of a sizable nature. Hereinis lies the real importance of the psychological preparations now under way for World War III.</p>
<p>The state will have to spend for war purposes as much as is required to maintain a “stable and safe” equilibrium. As a result, unemployment will be a thing of the past. Barring the immediate outbreak of World War III – i.e., within five years of the end of World War II – the size of post-war war outlays is not significantly influenced by the potential utility of such expenditures for war-making. <em>The decisive consideration is the level of employment that it is desired to maintain.</em> Based on preliminary estimates of national income and capital accumulation in the interim period between World War II and World War III, the United States will achieve a Permanent War Economy through annual war expenditures of from $10-20 billion. Thus, the inner functioning of American capitalism will have been significantly altered, with profound consequences for all classes of society.</p>
<p>Why these “balancing” expenditures on the part of government must take the form of war outlays rather than public works requires a brief excursion into the past history of unpaid (surplus) labor.<br>
</p>
<a name="ul"></a>
<h4>The Problem of Unpaid Labor</h4>
<p class="fst">The root of all economic difficulties <em>in a class</em> society lies in the fact that the ruling class appropriates (in accordance with the particular laws of motion of the given society) a portion of the labor expended by the working class or classes in the form of unpaid labor. The expropriation of this surplus labor presents its own set of problems; generally, however, they do not become crucial for the ruling class until the point is reached where it is necessary to pile up accumulations of unpaid labor. When these accumulations in turn beget new accumulations, then the stage of “primitive accumulation” (designed to build up the physical stock of the country for immediate consumption’ rose purposes) ceases and the stability of the society is threatened. The ruling class is impaled on the horns of a most deep serious dilemma: to allow these growing and mature accumulations to enter into economic circulation means to undermine the very foundations of existing society (in modern terms, depression); to reduce or eliminate these expanding accumulations of unpaid labor requires the ruling class or sections of it to commit hara-kiri (in modern terms, the capitalist must cease being a capitalist or enter into bankruptcy). The latter solution is like asking capitalists to accept a 3 per cent rate of profit, because if they make 6 or 10 per cent they upset the applecart and destroy the economic equilibrium. This is too perturbing a prospect; consequently, society as a whole must suffer the fate of economic disequilibrium <em>unless the ruling class can bring its State to intervene in such a manner as to resolve this basic dilemma.</em></p>
<p>Since a class society can support on a relatively stabled it basis a certain amount of accumulated unpaid labor, the problem becomes one of immobilizing the excess. State intervention is required precisely because no individual member of the ruling class will <em>voluntarily</em> give up the opportunity to accumulate further wealth. The State, therefore, acts in the interests of all the members of the ruling class; the disposition of the excess accumulated unpaid labor is socially acceptable, and generally unnoticed by individual members of the ruling class.</p>
<p>Such, for example, was the role performed by pyramid-building in Ancient Egypt, the classic example of a stable economy based on the institution of chattel slavery. In feudal society, based on the accumulation of unpaid labor through the institution of serfdom, an analogous role was performed by the building of elaborate monasteries and shrines. These lavish medieval churches were far more than centers of worship and learning, or even than examples of conspicuous expenditure on the part of the ruling classes; they were an outlet for the unpaid labor of feudal society – an outlet which permitted a deadening economic equilibrium for centuries.</p>
<p>Capitalist society, of course, has had its own pyramids. These ostentatious expenditures, however, have failed to keep pace with the accumulation of capital. In recent times, the best examples have been the public works program of the New Deal and the road building program of Nazi Germany. Both have been accomplished through what is termed “deficit financing.” That is, the state has borrowed capital (accumulated surplus labor for which there is no opportunity for profitable private investment) and consumed it by employing a portion of the unemployed millions, thus achieving a rough but temporarily workable equilibrium.</p>
<p>While the Roosevelt and Hitler prewar “recovery” programs had much in common, there is an important difference. The latter was clearly a military program; all state expenditures were calculated with a direct military use in view. As such, they did not, for the most part, conflict with the direct interests of the capitalist class of Germany who wished to reserve for private capital all opportunities for profitable investment. In the United States, only a minor portion of the WPA and PWA programs possessed potential military usefulness. Consequently, as such expenditures increased, the opposition of the capitalist class rose (this was basically an economic development, although the psychological impetus afforded by recovery from the depths of depression undoubtedly aided the process). The more money the state spent, the more these expenditures circumscribed and limited the opportunity for profitable private investment. The New Deal was dead before the war; the war merely resuscitated its political expression and was, in reality, an historical necessity.</p>
<p>War expenditures accomplish the same purpose as public works, but in a manner that is decidedly more effective and more acceptable (from the capitalist point of view).</p>
<p>In this, capitalism is again borrowing from the techniques employed by the more static class societies of slavery and projects were officially counted among the unemployed. Today, however, not only are those engaged in producing the instruments of war considered to be gainfully employed; even those in the armed forces are classified as part of the employed labor force. It is only necessary to perpetuate into the post-war period this type of bookkeeping which classifies soldiers and munitions workers as “employed,” and then war (“national defense”) outlays become a legitimate end-purpose of economic activity; a Permanent War Economy is established and socially sanctioned; capitalist society is safely maintained – until the next war.<br>
</p>
<h4>Capital Accumulation and State Intervention</h4>
<p class="fst">Perhaps the most distinctive feature of capitalist society – in comparison with earlier class societies, and at the same time that which indicates its superiority over these earlier forms – is the rapidity with which wealth is accumulated. Alternating periods of rising and falling business activity have resulted and have come to be accepted as an inevitable and peculiarly <em>capitalist</em> feature of the accumulation of capital. This was, at least, the situation prior to World War II. To understand the basic laws of motion of capitalist society required the application of the fundamental Marxian concepts of the increasingly high organic composition of capital and the falling average rate of profit. With these tools Marx predicted, and one could analyze, the results of capitalist accumulation. The Marxian general law of capitalist accumulation may, for convenience, be expressed as two laws; namely, the inevitable tendencies toward the polarization of classes and the increase in unemployment.</p>
<p>Today, however, this analysis no longer holds good without certain modifications. The new element in the situation is clearly the fact that the entire present period (in the United States, beginning with the advent of the Roosevelt Administration) is one of increasing State intervention. New forces are set in motion and new laws or trends are discernible. The war both obscures and highlights these basic changes in the functioning of capitalism. The role of the State is obviously increased, but the conduct of the war gives rise to the illusion that this is a temporary affair. But the government cannot spend upwards of $300 billion on war expenditures, acquiring ownership of huge quantities of facilities, raw materials and fabricated goods, without having a profound and lasting effect on the body economic. How to dispose of an anticipated $75 billion of government assets at the end of the war is one of the more perplexing questions troubling the best minds among the bourgeoisie today.</p>
<p>If the Republicans are victorious in the 1944 elections, it is conceivable that they might try to restore the <em>status quo ante bellum.</em> Reversing an economic trend, however, is far more difficult than reversing a political trend. Destroying or immobilizing $75 billion of government assets is qualitatively a different proposition than the situation which existed at the end of World War I. It would be <em>impossible</em> to do this, and at the same time to maintain employment at a high level and to carry through the international plans of American imperialism. Any such Republican experiment will necessarily be short-lived. As for the Roosevelt Administration – it seems to be “sold” on the Keynesian proposition that public investment must take up the inevitable slack in private investment in order to maintain the savings-investment equilibrium.</p>
<p>Assuming, therefore, that my major thesis is correct and that government balancing operations in the future will consist largely of socially sanctioned war outlays, the question arises: how will the future laws of capitalist accumulation differ from the past?<br>
</p>
<h4>The Future Laws of Capitalist Accumulation</h4>
<p class="fst">In the past, the dynamics of capital accumulation have caused a polarization of classes. (On the one hand, concentration of wealth in fewer and fewer monopoly capitalists; on the other, a steady increase in the size of the working class, both factory and non-factory, relative to other classes). The war, far from interrupting, has accentuated both these trends – in general, at the expense of the middle classes.</p>
<p>Although this law will still hold true in the epoch of Permanent War Economy, the increased State military outlays i as compared with prewar State expenditures) will have the effect of slowing up the <em>rate</em> of class polarization. This is due not so much to the different economic nature of these expenditures as to their <em>political</em> character. Their purpose, it must be remembered, is to stabilize the economy; i.e., by State intervention to freeze class relations <em>and simultaneously the existing class structure.</em> That is why the post-war size of the labor force and the national income will be considerably below that achieved during the war. Otherwise, the magnitude of post-war war outlays would be at a level so high as virtually to guarantee widespread political opposition on the part of the capitalist class.</p>
<p>The major revision that will have to be made in the Marxian analysis of capitalist accumulation is in the famous law that an increase in capital means an increase in the industrial reserve army. If the Permanent War Economy succeeds in stabilizing the economy at a high level, unemployment will be eliminated, but only through employment in lines that are economically unproductive. <em>Thus capitalist accumulation, instead of bringing about an increase in unemployment, will have as its major consequence a decline in the standard of living.</em></p>
<p>The decline in the standard of living will be similar in nature to that which is just beginning to take place in wartime. For example, until about the middle of 1942 it was possible for the developing American war economy to support a substantial increase in military production at the same time that a small, but significant, rise occurred in average civilian standards of living. This was due, for the most part, to the fact that in 1939 there was considerable underemployment of both men and resources. Once more or less full employment was attained, however, further increases in military production could only be achieved at the expense of the civilian sector of the economy. Most civilians have not yet felt the full impact of this development because of the accumulation of huge inventories of consumers’ goods in the hands of both merchants and consumers. As these inventories are depleted and as consumers’ durable goods wear out, the standard of living begins to decline noticeably. If the war continues throughout 1944, with no significant over-all cutbacks in military programs, the decline is apt to become precipitate.</p>
<p>The Permanent War Economy will operate much the same way. At first, of course, there may be a rise in the average standard of living if the levels of national income reached are reasonably close to those now maintained and if, simultaneously, there is a sharp reduction in total miiltary outlays (inclusive of expenditures for “relief and rehabilitation”). Within a relatively short peric,d, however, assuming that the economy is stabilized at the desired level with a minimum of unproductive governmental expenditures, the maintenance of economic equilibrium will require a steadily rising curve of military outlays. The decline in the average standard of living of the workers, at first relative, will then ] become absolute – particularly on a world scale as all nations adapt their internal economies to conform with the I requirements of the new order based on an international Permanent War Economy. Naturally, the decline will not i be a descending straight line; it will have its ups and downs, but the long-term trend will definitely be downward.</p>
<p>Three major assumptions are implicit in the above analysis. <em>First</em>, any significant increases in real national income or total product beyond the reconversion equilibrium level are excluded, due to the capitalist nature of production. This ties in with the reasons why continued accumulation of capital is necessary and why these additional increments of capitalist accumulation require more or less corresponding (socially acceptable) economically unproductive State expenditures. <em>Second</em>, while a portion of the US State’s consumption of accumulated unpaid labor may take the form of public works, for reasons previously stated only a minor portion of such public works will be capable of raising the standard of living: and these will decline in importance as direct war outlays increase. <em>Third</em>, the possible effects of alternative fiscal policies (financing through difference methods of taxation and borrowing) to support the Permanent War Economy are excluded as not affecting the basic anlysis; although certain methods may markedly accelerate the inflationary process, while others may permit American entry into World War III without having experienced a violent inflation.</p>
<p>Capitalist society is forever seeking a “stable and safe” equilibrium – one which eliminates unemployment or, at least, reduces it to negligible proportions (“stable”) ; and one which is generally acceptable or, at least, politically workable (“safe”).</p>
<p>This is, of course, hardly a new problem. Instability has been a dominant characteristic of capitalism particularly since technological advances in industry have become marked, a matter of some fifty to one hundred years. It is only in recent years, however, especially since the Bolshevik Revolution plainly demonstrated that capitalism is a mortal society and can be succeeded by a different set of socio-economic institutions, that the problem has taken on a new urgency. Theoretical analysis indicates, and the observations of capitalists confirm, that capitalism would have great difficulty in surviving a depression comparable in severity to the recent one. This must be avoided at all costs, say the more enlightened members of the bourgeoisie, even if far-reaching structural changes are called for. True, this type of motivation has led to fascism and can easily do again. It is assumed, however, that the ruling class preftts to stave off the advent of fascism as long as possible, and that there is sufficient evidence to indicate that what I have termed “a Permanent War Economy” is coming to be regarded as a feasible, even if temporary, alternative to fascism.<br>
</p>
<h4>The P.W.E in Action – A Look Ahead</h4>
<p class="fst">How will the Permanent War Economy operate? Can it achieve the “stable and safe” equilibrium? It is possible to chart the major outlines of the functioning of the Permanent War Economy. The assumptions underlying this projection are listed below in outline form without any attempt at justification. They are grouped under three broad headings, as follows:</p>
<p class="c"><strong>MILITARY</strong></p>
<ol>
<li>The European phase of World War II will end late in 1944.<br>
</li>
<li>The Asiatic phase of World War II will end late in 1945.<br>
</li>
<li>While some demobilization will take place with the defeat of Germany, the major transition will occur in fiscal 1946.<br>
</li>
<li>World War III will occur in 1960.</li>
</ol>
<br>
<p class="c"><strong>INTERNATIONAL</strong></p>
<ol start="5">
<li>Conduct of world affairs in the interim period between World Wars II and III will be in the hands of the United States, Great Britain, and Russia, with American imperialism the dominant partner.<br>
</li>
<li>No successful proletarian revolution will take place.<br>
</li>
<li>Stalinism will successfully maintain itself in power in Russia.<br>
</li>
<li>A form of international “grossraumwirtschaft” will govern economic relations among the major economic regions of the world.<br>
</li>
<li>There will be a limited restoration of international trade based on direct and open State intervention.</li>
</ol>
<br>
<p class="c"><strong>DOMESTIC ECONOMY</strong><br>
<small>(all dollar figures in 1943 prices)</small></p>
<ol start="10">
<li>The national income will vary within the limits of $120-150 billion, averaging around $135 billion.<br>
</li>
<li>There will be a gross national product of $140-180 billion, with an average of about $160 billion.<br>
</li>
<li>The dangerous margin of excess capital accumulations (over and above private capital formation) will run between $20–25 billion.<br>
</li>
<li>Private capital formation will reach about $10 billion in 1947, declining to approximately $5 billion in 1952 and thereafter levelling off at this rate.<br>
</li>
<li>Government war outlays will average about $15 billion, with probable limits of $10–20 billion the trend will be toward the upper limit as World War III approaches.<br>
</li>
<li>The national debt in 1946 will be close to $250 billion, increasing thereafter at an annual rate of $5–10 billion.<br>
</li>
<li>The employed labor force will be stabilized at about 50 million persons additions; due to the growth of population of working age are ignored, as it is unlikely that they will be substantial enough to alter the picture.<br>
</li>
<li>While it is probable that productivity of labor will increase, this factor is omitted from consideration as being too difficult to estimate and, in any case, unlikely to affect the basic analysis.<br>
</li>
<li>There will be a steady, but somewhat falling rate of interest.<br>
</li>
<li>The propensity to consume will remain fairly constant.<br>
</li>
<li>The rate of profit will be sustained at a level comparable to the best prewar years, its tendency to decline being offset by increasing State intervention and a relatively minor increase in the rate of surplus value.</li>
</ol>
<p class="fst">On the basis of these assumptions, the table below of the movement of capital accumulation, government war outlays, the average standard of living and average real wages of the working class ander the Permanent War Economy follows logically.</p>
<p>1947 is chosen as the base year, for this is assumed to be the first “normal” post-war year. 1946 is considered as a year of transition. The concepts are presented in index ambers in order to show bask trends under the Permanent War Economy. Thus, according to the chart, the critical period will be 1934–1936. It Is at this time that the inherent contradictions of capitalism will begin to threaten seriously the newly-found economic stability, pushing society rapidly in the direction of World War</p>
<table align="center">
<tbody><tr>
<td><img border="1" src="oakestable-small.jpg" name="graphic1" align="bottom" width="600" height="299" alt="Table"></td>
</tr>
</tbody></table>
<p class="fst">Minor divergences will not materially affect the validity of the assumptions. This is particularly true of assumptions 1–9 and 17–20, which are really political and economic generalizations. For example, the analysis still holds true even World War III should take place in 1965 or 1970, rather than, as predicted, in 1960. Assumptions 10–16 are of a an entirely different character. Here, substantial differences in magnitude might render the forecasts useless. But 12, 13, 14 and 16 require explanation. The others conform rather closely to most predictions now being made.</p>
<p>The figure stated in assumption 12, taken together with that stated in assumption 13, is only slightly above the estimate made by Professor Alvin Hansen (one of the outstanding authorities in this country on the theoretical aspects of investment policy) of $20–25 billion as the amount necessary to be invested in the post-war period. The level indicated have would be $30 billion, hardly a significant difference. Assumption 13 provides for private capital formation is perfectly consistent wih the hest prewar years starting with the history of capitalism since it entered the phase of permanent crisis.</p>
<p>Assumption 14 will appear very high to those who view the post-war situation in the same manner as the prewar situation. An interesting confirmation of the estimate made here appears in the October 1943 issue of the National Industrial Conference Board’s <strong>Economic Record</strong> in an article entitled <em>Postwar Budget Prospects: 1945–1948:</em></p>
<p class="quoteb"> While all the figures for future years are necessarily speculative, they are particularly so for national defense expanditures in the post-war period. Armed forces numberimg 1 million lee would constitute a smaller number than are assionsed in some quarters. <em>If the size of the armed services should be nearer to 2 million, expenditures of about $7 billion</em> would seem to be more nearly the level of our peacetime defense expenditures than the $4 billion shown for l948. <em>The natureand the extent of equipment</em> that would be used by our armed forces in the post-war era could account for variations in expenditures of <em>several billion dollars a year.</em> (My italics – <em>W.J.O.</em>)</p>
<p class="fst">A total military establishment of 2 million appears to be conservative in the light of plans for occupation and policing forces, plus conscription of the youth. Equipment and supplies for this size military force should easily reach $10 billion. Stockpiling and other military outlays, direct and indirect, appear to be quite capable of raising the total to $20 billion, the upper limit in the assumption.</p>
<p>The average of current estimates regarding the probable size of the post-war labor force is about 55 million persons. Assumption 16, therefore, is considerably below prevailing estimates; for if the difference of 5 million were to constitute unemployment in any genuine sense of the term, it is obvious that the Permanent War Economy would not be, fulfilling its main function. 50 million is a more realistic figure than 55. It is higher than all prewar records, although it is some 13 million below the current peak o about 63 million (which includes those in the armed forces) The translation of those in the armed forces into active members of the labor force, is subject to shrinkage which depending on battle casualties and related factors, should run between 1 and 2 millions. Net retirements, due to the excess of over-age people leaving jobs as compared with new entrants, should be close to 3 million. The balance of 8 million represents women who are temporary war worker and are expected to leave the employed labor force once the war is over. This figure includes current child labor and is therefore not much higher than generally accepted “guess-timates.”</p>
<p>The assumptions upon which the operations of the Permanent War Economy are predicated thus appear to be realistic. <em>Among the many problems which will remainare two outstanding and closely related ones: can class relations be frozen, and can disastrous inflation be prevented. Each requires a separate article, to be adequately discussed.</em> The first, as I have indicated, is directly related to the pre cess of capitalist accumulation in the post-war period.</p>
<p>It depends not only on many political factors but on severa economic ones, the most important of which is clearly the question of inflation.</p>
<p>It is not my belief that the Permanent War Economy wit provide an enduring solution for capitalism. But it can work for the period under consideration; and there is like wise no reason why appropriate fiscal policies (from the point of view of the capitalists, which means anti-working class in essence) will not be successful in preventing out right inflation. The national debt, astronomical as it mar seem, presents no serious problem. Assuming an annual interest burden of $7 billion, a very generous estimate, this will easily be covered out of current tax receipts. It is the <em>type</em>, as well as the amount, of taxes to be levied that will constitute one of the major areas of political and class conflict. The question is made still more acute by the fact that inflation appears to offer the bourgeoisie an easy way out to unload the cost of the war onto the backs of the working masses of the population. A policy of this kind however, cannot be drifted into; it must be adopted consciously. If the die is now, or soon to be, cast in favor of deliberate and uncontrolled inflation, this can only mean that the decisive section of the ruling class is determined to establish fascism as soon as possible. I see no evidence at present, to warrant this belief although, of course, there are many similarities between fascism and the Permanent War Economy. The danger of inflation is not diminished by a Permanent War Economy; on the contrary, it is steadily increased. But it seems more probable that the inflation-fascism sequence is a contender for a prime place on the agenda after World War III than in the post-World War II period.<br>
</p>
<h4>Labor’s Responsibility</h4>
<p class="fst">It is not likely that the above analysis, necessarily presented in sketchy, outline form, will meet with any enthusiastic reception. For one thing, it runs counter to all currently organized and clearly defined bodies of political thought. Orthodox Marxists (Trotskyists) have convinced themselves that only a successful proletarian revolution can end this war; otherwise fascism will rule the post-war world. New Dealers want to restore “free competition” and make capitalism humane; the only practical note amidst their absurdities is the attempt to win a fourth term for Roosevelt. Social Democrats are still for socialism in theory and capitalism in practice. In fact, all capitalist (and Stalinist) political thought will deny the possibility of a Permanent War Economy, although they will support measures leading toward its establishment.</p>
<p>Moreover, the imagination, courage and capacity of the human mind to project itself forward in an hour of deep social crisis and deal with reality instead of illusion has not been a very noticeable characteristic of the human species. Nevertheless, this war, which has already destroyed so many cherished illusions, will destroy many more before it is consigned to the history texts. The drift of events is toward a Permanent War Economy. What better solution has capitalism to offer? And what likelihood of an anti-capitalist solution is there at present? What may now seem fantastic to many will, as the present war draws to a close, appear to be obvious as the evidence piles up.</p>
<p>Upon the shoulders of the labor movement rests the real responsibility for preventing World War III. This universally-approved objective can never be achieved by the Roosevelts, Churchills, Stalins, or Chiang Kai-Sheks of this or the next decade. For the labor movement, especially its socialist-minded sector, to stand a chance to prevent the atomization of society as a result of repeated wars requires much closer and more realistic study of what is actually happening in the world today than has yet been evidenced. The basic strategic aim of socialism as the only rational alternative to capitalism needs no revision except that of modernization. It is in the field of tactics that substantial revisions are needed. A declining standard of living under a Permanent War Economy cannot be successfully fought by a labor movement whose most powerful organizations are trade unions, no matter how powerful these may be. The important battle areas will be abstruse (to the masses) economic questions, such as the size and composition of the Federal budget, taxation and fiscal policy, investment alternatives, and the like, rather than wages, profits and working conditions for specific industries or factories. These latter will still be important, to be sure, but they will largely be determined by the decisions affecting the former. This points to the necessity not only of widespread mass economic education, but of the vital need for an independent political Party of labor. Only a labor party, independent of capitalist political machines, and based upon trade unionists, is capable of coping with the problems of living under a permanent war economy.</p>
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Walter J. Oakes
Toward a Permanent War Economy?
(February 1944)
Walter J. Oakes, Toward a Permanent War Economy?, Politics, February 1944.
Transcribed by Ernest Haberkern (Center for Socialist History, Berkeley, California).
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
As this article goes to press, the Wall Street Journal of Jan. 6 carries a lead story which strikingly confirms one of Mr. Oakes’ main points: the scope of the planning now going on for World War III. The Journal’s Washington correspondent writes:
The State Department is now considering a big post-armistice stockpile scheme. Under this proposal, which has now reached Secretary Condell Hull, the Government would accumulate a hoard of strategic materials, mostly from imports, over a period of some five years after the war. Goods like crude rubber and industrial diamonds would be stored above ground in warehouses; commodities such as tin and petroleum would be amassed below ground in vaults, mines and subterranean reservoirs.
Such a program, say its advocates, would provide a hedge against any future national ‘emergency’ (presumably, the next war). In addition, it would provide a balance for the large-scale American export program that is in prospect for world reconstruction, offering a way for debtor nations to repay public loans advanced by this country.
The Journal also reports that Vice-Chairman Batt of the War Production Board, speaking the same day in Chicago, urged adoption of a similar plan. Indicating the idea has had “more than casual official consideration”, Batt suggested it as “a novel means of approaching a balance in our foreign trade picture”.
This last argument shows the intimate connection that is coming to exist between war-making and economic stability. The riddle of how the impoverished, relatively backward rest of the world is going to pay for American exports of goods and capital, is neatly solved by importing vast quantities of raw materials and “sterilizing” them, much as the gold at Fort Knox is sterilized, by burying them in stockpiles withdrawn from the market. War and the prospect of war offer the means for performing this useful economic trick. In war modern capitalism has, as this article shows, an economic stabilizer better than pyramids, cathedrals and WPA rolled into one. – Ed. Politics, 1944.
AS World War II enters its climactic stage, it becomes increasingly clear that this is not the “War To End All Wars.” Already there have been many warnings of the “possibility of another war.” A growing cynicism is abroad concerning the prospects of durable peace. World War III is not only a distinct possibility, it is inevitable as long as the world’s social structure remains one of capitalist imperialism. As Dorothy Thompson puts it in her column of December 6, 1943, “All grand alliances (referring to the Roosevelt-Stalin-Churchill meeting), have existed only as long as it was necessary to win a war, or protect themselves against the aggressions of other powers. Once all enemies are defeated, the only potential enemies left are members of the grand alliance themselves.” In more scientific terms – the contradictions which led to this war have not been eliminated: if anything, they have been intensified.
More revealing than any theoretical analysis concerning its inevitability are the obvious preparations that are now being made for World War III. One may dismiss the psychological preparations, designed to condition the population to accept the inevitability of the next war, as too intangible to evaluate. One may shrug aside the political preparations, which are clearly inherent in the power politics now being played by the leaders of the United Nations, on the ground that this is realpolitik in a materialistic world. But it is impossible to overlook the unanimity with which the business community approves the maintenance of a large standing army, universal military service and an air force second to none as preconditions of America’s “security” in the post-war world. Disarmament, the utopian pipedream of Geneva, is to be abandoned as a slogan after this war – except for the conquered enemy.
Important as are the above more or less obvious types of preparation, currently concealed economic preparations are decisive. In the United States, this question is intimately bound up with the problems of reconversion. Much more is at stake than the question of what to do with the huge government-owned war plants (estimated at $20 billion by the end of the war). A plan for reconversion, no matter how loose and flexible, must be guided by some Indication of the type of post-war world that is desired. If war within the life of the next generation is a probability, then it must be planned for on the basis of the lessons learned from this war.
American imperialism, for example, has no intention of entering another war without adequate stockpiles of all critical and strategic military materials. And so we have Senate Bill 1582 (introduced early in December 1943 by Senator Scrugham of Nevada) whose stated purpose is:
“To assure an adequate supply of strategic and critical minerals for any future emergency by holding intact in the post-war period all stock piles surviving the present war owned by Government agencies and by necessary augmentation thereof primarily from domestic sources.”
The “future emergency” is subsequently defined as “a total war of three years’ duration, or of any equivalent emergency.”
In the case of copper, an article in the National Industrial Conference Board’s Economic Record (November 1943) reveals what would be involved. “As current usage of copper probably is at least 1.5 million tons annually, a supply for a three-year war, as proposed in the Scrugham bill, might require 4.5 million tons. This amount is nearly equal to the entire domestic output of new copper in the Thirties, or four years’ output at the peak mining rate of 1.07 million tons in 1942.” While the Scrugham bill leaves the question of cost open, it is estimated that the copper program alone would cost well above $1 billion. Clearly, economic preparations for World War III are beyond the stage of informal discussion.
The big question which all discussions of post-war economy try to answer is, of course: How to achieve full employment? The sad experiences following the last war, culminating in the world-wide depression of the 1930s, give the problem an understandable urgency. Public interest in the question is certainly more widespread than ever before. What better tribute to American advertising genius, or what more fitting commentary on the political and economic naivete of the American people, could there be than the $50,000 contest now being held by the Pabst Brewing Company, in commemoration of its 100th birthday, for the best plans to achieve full post-war employment?
There is an urgent political necessity for capitalism to achieve the abolition of unemployment. It is motivated by the inevitable slack in private investment in order to maintain the savings-investment equilibrium.
Assuming, therefore, that my major thesis is correct and that government balancing operations in the future will consist largely of socially sanctioned war outlays, the question arises: how will the future laws of capitalist accumulation differ from the past?
The Future Laws of Capitalist Accumulation
In the past, the dynamics of capital accumulation have caused a polarization of classes. (On the one hand, concentration of wealth in fewer and fewer monopoly capitalists; on the other, a steady increase in the size of the working class, both factory and non-factory, relative to other classes). The war, far from interrupting, has accentuated both these trends – in general, at the expense of the middle classes.
Although this law will still hold true in the epoch of Permanent War Economy, the increased State military outlays 1 as compared with prewar State expenditures) will have the effect of slowing up the rate of class polarization. This is due not so much to the different economic nature of these expenditures as to their political character. Their purpose, it must be remembered, is to stabilize the economy; i.e., by State intervention to freeze class relations and simultaneously the existing class structure. That is why the post-war size of the labor force and the national income will be considerably below that achieved during the war. Otherwise, the magnitude of post-war war outlays would be at a level so high as virtually to guarantee widespread political opposition on the part of the capitalist class.
The major revision that will have to be made in the Marxian analysis of capitalist accumulation is in the famous law, that an increase in capital means an increase in the industrial reserve army. If the Permanent War Economy succeeds in stabilizing the economy at a high level, unemployment will be eliminated, but only through employment in lines that are economically unproductive. Thus capitalist accumulation, instead of bringing about an increase in unemployment, will have as its major consequence a decline in the standard of living.
The decline in the standard of living will be similar in nature to that which is just beginning to take place in wartime. For example, until about the middle of 1942 it was possible for the developing American war economy to support a substantial increase in military production at the same time that a small, but significant, rise occurred in average civilian standards of living. This was due, for the most part, to the fact that in 1939 there was considerable underemployment of both men and resources. Once more or less full employment was attained, however, further increases in military production could only be achieved at the expense of the civilian sector of the economy. Most civilians have not yet felt the full impact of this development because of the accumulation of huge inventories of consumers’ goods in the hands of both merchants and consumers. As these inventories are depleted and as consumers’ durable goods wear out, the standard of living begins to decline noticeably. If the war continues throughout 1944, with no significant over-all cutbacks in military programs, the decline is apt to become precipitate.
The Permanent War Economy will operate much the same way. At first, of course, there may be a rise in the average standard of living if the levels of national income reached, are reasonably close to those now maintained and if, simultaneously, there is a sharp reduction in total miiltary out lays (inclusive of expenditures for “relief and rehabilitation”). Within a relatively short periGd, however, assuming that the economy is stabilized at the desired level with a minimum of unproductive governmental expenditures, the maintenance of economic equilibrium will require a steadily rising curve of military outlays. The decline in the average standard of living of the workers, at first relative, will then become absolute – particularly on a world scale as all na. tions adapt their internal economies to conform with the requirements of the new order based on an international Permanent War Economy. Naturally, the decline will not be a descending straight line; it will have its ups and downs, but the long-term trend will definitely be downward.
Three major assumptions are implicit in the above analysis. First, any significant increases in real national income or total product beyond the reconversion equilibrium level are excluded, due to the capitalist nature of production. This ties in with the reasons why continued accumulation of capital is necessary and why these additional increments of capitalist accumulation require more or less corresponding (socially acceptable) economically unproductive State expenditures. Second, while a portion of the State’s consumption of accumulated unpaid labor may take the form of public works, for reasons previously stated only a minor portion of such public works will be capable of raising the standard of living; and these will decline in importance as direct war outlays increase. Third, the possible effects of alternative fiscal policies (financing through difference:methods of taxation and borrowing ) to support the Permanent War Economy are excluded as not affecting the basic anlysis; although certain methods may markedly accelerate the inflationary process, while others may permit American entry into World War III without having experienced a violent inflation.
Capitalist society is forever seeking a “stable and safe” equilibrium – one which eliminates unemployment or, at least, reduces it to negligible proportions (“stable”); and one which is generally acceptable or, at least, politically workable (“safe”).
This is, of course, hardly a new problem. Instability has been a dominant characteristic of capitalism particularly since technological advances in industry have become marked, a matter of some fifty to one hundred years. It is only in recent years, however, especially since the Bolshevik Revolution plainly demonstrated that capitalism is a mortal society and can be succeeded by a different set of socio-economic institutions, that the problem has taken on a new urgency. Theoretical analysis indicates, and the observations of capitalists confirm, that capitalism would have great difficulty in surviving a depression comparable in severity to the recent one. This must be avoided at all costs, say the more enlightened members of the bourgeoisie, even if far-reaching structural changes are called for. True, this type of motivation has led to fascism and can easily do :so again. It is assumed, however, that the ruling class prefers to stave off the advent of fascism as long as possible, and that there is sufficient evidence to indicate that what I have termed “a Permanent War Economy” is coming to be a much more powerful stimulus than the increasingly-repeated question: “If we can employ everyone in wartime, why can’t we do as much in peacetime?” The fact is that the capitalist system cannot stand the strain of another siege of unemployment comparable. to 1930-1940. It does not require a far-seeing statesman to picture the revolutionary dynamite inherent in a situation where 10-12 million people are unemployed. And this is a conservative estimate of the size of post-war unemployment, if the traditional methods, such as those used after the last war, are followed this time.
The traditonial methods (consisting essentially of trying to restore the status quo ante bellum as rapidly as possible) will not be followed. Whether Roosevelt presides over the transition period or not, too much water has flowed under the bridge to permit an uncontrolled post-war inflation followed by a resounding and catastrophic depression. This much, at least, the better minds amongst the capitalists see. The State will have to intervene. It is a question of how much and in what form.
Here we encounter a problem in semantics. State intervention, as I shall show below, must take the form of maintaining a Permanent War Economy. What is a “war economy”? In an extreme sense, involving the reduction of civilian standards of living to the bedrock minimum in order to permit the maximum expansion of war output, we have not, of course, a war economy today. Russia, since the consolidation of Stalin’s dictatorship, and Germany, since the consolidation of Hitler’s dictatorship, both in “peace” and in the period of military hostilities, have experienced this type of war economy. They are the only countries in modern times to have experienced a “genuine” war economy, with the possible exception of Japan.
A war economy, as I use the term, is not determined by the expenditure of a given percentage of a nation’s resources and productive energies for military purposes. This determines only the kind of war economy – good, bad, or indifferent from the point of view of efficiency in war-making. The question of amount, however, is obviously relevant. At all times, there are some expenditures for war or “national defense.” How much must the government spend for, such purposes before we can say a war economy exists? In general terms, the problem can be answered as follows: a war economy exists whenever the government’s expenditures for war (or “national defense”) become a legitimate and significant end-purpose of economic activity. The degree of war expenditures required before such activities become significant obviously varies with the size and composition of the national income and the stock of accumulated capital. Nevertheless, the problem is capable of theoretical analysis and statistical measurement.
Until the present period, in America at least, only one legitimate end-purpose of economic activity has been recognized (in theory) ; namely, the satisfaction of human wants or, less euphemistically, the production and distribution of consumers’ goods and services. In wartime, of course, the legitimacy of war expenditures is never questioned, except by those few who question the progressiveness of the aims of the war. We are now being prepared, however, to recognize as a legitimate economic activity peacetime expenditures for war of a sizable nature. Hereinis lies the real importance of the psychological preparations now under way for World War III.
The state will have to spend for war purposes as much as is required to maintain a “stable and safe” equilibrium. As a result, unemployment will be a thing of the past. Barring the immediate outbreak of World War III – i.e., within five years of the end of World War II – the size of post-war war outlays is not significantly influenced by the potential utility of such expenditures for war-making. The decisive consideration is the level of employment that it is desired to maintain. Based on preliminary estimates of national income and capital accumulation in the interim period between World War II and World War III, the United States will achieve a Permanent War Economy through annual war expenditures of from $10-20 billion. Thus, the inner functioning of American capitalism will have been significantly altered, with profound consequences for all classes of society.
Why these “balancing” expenditures on the part of government must take the form of war outlays rather than public works requires a brief excursion into the past history of unpaid (surplus) labor.
The Problem of Unpaid Labor
The root of all economic difficulties in a class society lies in the fact that the ruling class appropriates (in accordance with the particular laws of motion of the given society) a portion of the labor expended by the working class or classes in the form of unpaid labor. The expropriation of this surplus labor presents its own set of problems; generally, however, they do not become crucial for the ruling class until the point is reached where it is necessary to pile up accumulations of unpaid labor. When these accumulations in turn beget new accumulations, then the stage of “primitive accumulation” (designed to build up the physical stock of the country for immediate consumption’ rose purposes) ceases and the stability of the society is threatened. The ruling class is impaled on the horns of a most deep serious dilemma: to allow these growing and mature accumulations to enter into economic circulation means to undermine the very foundations of existing society (in modern terms, depression); to reduce or eliminate these expanding accumulations of unpaid labor requires the ruling class or sections of it to commit hara-kiri (in modern terms, the capitalist must cease being a capitalist or enter into bankruptcy). The latter solution is like asking capitalists to accept a 3 per cent rate of profit, because if they make 6 or 10 per cent they upset the applecart and destroy the economic equilibrium. This is too perturbing a prospect; consequently, society as a whole must suffer the fate of economic disequilibrium unless the ruling class can bring its State to intervene in such a manner as to resolve this basic dilemma.
Since a class society can support on a relatively stabled it basis a certain amount of accumulated unpaid labor, the problem becomes one of immobilizing the excess. State intervention is required precisely because no individual member of the ruling class will voluntarily give up the opportunity to accumulate further wealth. The State, therefore, acts in the interests of all the members of the ruling class; the disposition of the excess accumulated unpaid labor is socially acceptable, and generally unnoticed by individual members of the ruling class.
Such, for example, was the role performed by pyramid-building in Ancient Egypt, the classic example of a stable economy based on the institution of chattel slavery. In feudal society, based on the accumulation of unpaid labor through the institution of serfdom, an analogous role was performed by the building of elaborate monasteries and shrines. These lavish medieval churches were far more than centers of worship and learning, or even than examples of conspicuous expenditure on the part of the ruling classes; they were an outlet for the unpaid labor of feudal society – an outlet which permitted a deadening economic equilibrium for centuries.
Capitalist society, of course, has had its own pyramids. These ostentatious expenditures, however, have failed to keep pace with the accumulation of capital. In recent times, the best examples have been the public works program of the New Deal and the road building program of Nazi Germany. Both have been accomplished through what is termed “deficit financing.” That is, the state has borrowed capital (accumulated surplus labor for which there is no opportunity for profitable private investment) and consumed it by employing a portion of the unemployed millions, thus achieving a rough but temporarily workable equilibrium.
While the Roosevelt and Hitler prewar “recovery” programs had much in common, there is an important difference. The latter was clearly a military program; all state expenditures were calculated with a direct military use in view. As such, they did not, for the most part, conflict with the direct interests of the capitalist class of Germany who wished to reserve for private capital all opportunities for profitable investment. In the United States, only a minor portion of the WPA and PWA programs possessed potential military usefulness. Consequently, as such expenditures increased, the opposition of the capitalist class rose (this was basically an economic development, although the psychological impetus afforded by recovery from the depths of depression undoubtedly aided the process). The more money the state spent, the more these expenditures circumscribed and limited the opportunity for profitable private investment. The New Deal was dead before the war; the war merely resuscitated its political expression and was, in reality, an historical necessity.
War expenditures accomplish the same purpose as public works, but in a manner that is decidedly more effective and more acceptable (from the capitalist point of view).
In this, capitalism is again borrowing from the techniques employed by the more static class societies of slavery and projects were officially counted among the unemployed. Today, however, not only are those engaged in producing the instruments of war considered to be gainfully employed; even those in the armed forces are classified as part of the employed labor force. It is only necessary to perpetuate into the post-war period this type of bookkeeping which classifies soldiers and munitions workers as “employed,” and then war (“national defense”) outlays become a legitimate end-purpose of economic activity; a Permanent War Economy is established and socially sanctioned; capitalist society is safely maintained – until the next war.
Capital Accumulation and State Intervention
Perhaps the most distinctive feature of capitalist society – in comparison with earlier class societies, and at the same time that which indicates its superiority over these earlier forms – is the rapidity with which wealth is accumulated. Alternating periods of rising and falling business activity have resulted and have come to be accepted as an inevitable and peculiarly capitalist feature of the accumulation of capital. This was, at least, the situation prior to World War II. To understand the basic laws of motion of capitalist society required the application of the fundamental Marxian concepts of the increasingly high organic composition of capital and the falling average rate of profit. With these tools Marx predicted, and one could analyze, the results of capitalist accumulation. The Marxian general law of capitalist accumulation may, for convenience, be expressed as two laws; namely, the inevitable tendencies toward the polarization of classes and the increase in unemployment.
Today, however, this analysis no longer holds good without certain modifications. The new element in the situation is clearly the fact that the entire present period (in the United States, beginning with the advent of the Roosevelt Administration) is one of increasing State intervention. New forces are set in motion and new laws or trends are discernible. The war both obscures and highlights these basic changes in the functioning of capitalism. The role of the State is obviously increased, but the conduct of the war gives rise to the illusion that this is a temporary affair. But the government cannot spend upwards of $300 billion on war expenditures, acquiring ownership of huge quantities of facilities, raw materials and fabricated goods, without having a profound and lasting effect on the body economic. How to dispose of an anticipated $75 billion of government assets at the end of the war is one of the more perplexing questions troubling the best minds among the bourgeoisie today.
If the Republicans are victorious in the 1944 elections, it is conceivable that they might try to restore the status quo ante bellum. Reversing an economic trend, however, is far more difficult than reversing a political trend. Destroying or immobilizing $75 billion of government assets is qualitatively a different proposition than the situation which existed at the end of World War I. It would be impossible to do this, and at the same time to maintain employment at a high level and to carry through the international plans of American imperialism. Any such Republican experiment will necessarily be short-lived. As for the Roosevelt Administration – it seems to be “sold” on the Keynesian proposition that public investment must take up the inevitable slack in private investment in order to maintain the savings-investment equilibrium.
Assuming, therefore, that my major thesis is correct and that government balancing operations in the future will consist largely of socially sanctioned war outlays, the question arises: how will the future laws of capitalist accumulation differ from the past?
The Future Laws of Capitalist Accumulation
In the past, the dynamics of capital accumulation have caused a polarization of classes. (On the one hand, concentration of wealth in fewer and fewer monopoly capitalists; on the other, a steady increase in the size of the working class, both factory and non-factory, relative to other classes). The war, far from interrupting, has accentuated both these trends – in general, at the expense of the middle classes.
Although this law will still hold true in the epoch of Permanent War Economy, the increased State military outlays i as compared with prewar State expenditures) will have the effect of slowing up the rate of class polarization. This is due not so much to the different economic nature of these expenditures as to their political character. Their purpose, it must be remembered, is to stabilize the economy; i.e., by State intervention to freeze class relations and simultaneously the existing class structure. That is why the post-war size of the labor force and the national income will be considerably below that achieved during the war. Otherwise, the magnitude of post-war war outlays would be at a level so high as virtually to guarantee widespread political opposition on the part of the capitalist class.
The major revision that will have to be made in the Marxian analysis of capitalist accumulation is in the famous law that an increase in capital means an increase in the industrial reserve army. If the Permanent War Economy succeeds in stabilizing the economy at a high level, unemployment will be eliminated, but only through employment in lines that are economically unproductive. Thus capitalist accumulation, instead of bringing about an increase in unemployment, will have as its major consequence a decline in the standard of living.
The decline in the standard of living will be similar in nature to that which is just beginning to take place in wartime. For example, until about the middle of 1942 it was possible for the developing American war economy to support a substantial increase in military production at the same time that a small, but significant, rise occurred in average civilian standards of living. This was due, for the most part, to the fact that in 1939 there was considerable underemployment of both men and resources. Once more or less full employment was attained, however, further increases in military production could only be achieved at the expense of the civilian sector of the economy. Most civilians have not yet felt the full impact of this development because of the accumulation of huge inventories of consumers’ goods in the hands of both merchants and consumers. As these inventories are depleted and as consumers’ durable goods wear out, the standard of living begins to decline noticeably. If the war continues throughout 1944, with no significant over-all cutbacks in military programs, the decline is apt to become precipitate.
The Permanent War Economy will operate much the same way. At first, of course, there may be a rise in the average standard of living if the levels of national income reached are reasonably close to those now maintained and if, simultaneously, there is a sharp reduction in total miiltary outlays (inclusive of expenditures for “relief and rehabilitation”). Within a relatively short peric,d, however, assuming that the economy is stabilized at the desired level with a minimum of unproductive governmental expenditures, the maintenance of economic equilibrium will require a steadily rising curve of military outlays. The decline in the average standard of living of the workers, at first relative, will then ] become absolute – particularly on a world scale as all nations adapt their internal economies to conform with the I requirements of the new order based on an international Permanent War Economy. Naturally, the decline will not i be a descending straight line; it will have its ups and downs, but the long-term trend will definitely be downward.
Three major assumptions are implicit in the above analysis. First, any significant increases in real national income or total product beyond the reconversion equilibrium level are excluded, due to the capitalist nature of production. This ties in with the reasons why continued accumulation of capital is necessary and why these additional increments of capitalist accumulation require more or less corresponding (socially acceptable) economically unproductive State expenditures. Second, while a portion of the US State’s consumption of accumulated unpaid labor may take the form of public works, for reasons previously stated only a minor portion of such public works will be capable of raising the standard of living: and these will decline in importance as direct war outlays increase. Third, the possible effects of alternative fiscal policies (financing through difference methods of taxation and borrowing) to support the Permanent War Economy are excluded as not affecting the basic anlysis; although certain methods may markedly accelerate the inflationary process, while others may permit American entry into World War III without having experienced a violent inflation.
Capitalist society is forever seeking a “stable and safe” equilibrium – one which eliminates unemployment or, at least, reduces it to negligible proportions (“stable”) ; and one which is generally acceptable or, at least, politically workable (“safe”).
This is, of course, hardly a new problem. Instability has been a dominant characteristic of capitalism particularly since technological advances in industry have become marked, a matter of some fifty to one hundred years. It is only in recent years, however, especially since the Bolshevik Revolution plainly demonstrated that capitalism is a mortal society and can be succeeded by a different set of socio-economic institutions, that the problem has taken on a new urgency. Theoretical analysis indicates, and the observations of capitalists confirm, that capitalism would have great difficulty in surviving a depression comparable in severity to the recent one. This must be avoided at all costs, say the more enlightened members of the bourgeoisie, even if far-reaching structural changes are called for. True, this type of motivation has led to fascism and can easily do again. It is assumed, however, that the ruling class preftts to stave off the advent of fascism as long as possible, and that there is sufficient evidence to indicate that what I have termed “a Permanent War Economy” is coming to be regarded as a feasible, even if temporary, alternative to fascism.
The P.W.E in Action – A Look Ahead
How will the Permanent War Economy operate? Can it achieve the “stable and safe” equilibrium? It is possible to chart the major outlines of the functioning of the Permanent War Economy. The assumptions underlying this projection are listed below in outline form without any attempt at justification. They are grouped under three broad headings, as follows:
MILITARY
The European phase of World War II will end late in 1944.
The Asiatic phase of World War II will end late in 1945.
While some demobilization will take place with the defeat of Germany, the major transition will occur in fiscal 1946.
World War III will occur in 1960.
INTERNATIONAL
Conduct of world affairs in the interim period between World Wars II and III will be in the hands of the United States, Great Britain, and Russia, with American imperialism the dominant partner.
No successful proletarian revolution will take place.
Stalinism will successfully maintain itself in power in Russia.
A form of international “grossraumwirtschaft” will govern economic relations among the major economic regions of the world.
There will be a limited restoration of international trade based on direct and open State intervention.
DOMESTIC ECONOMY
(all dollar figures in 1943 prices)
The national income will vary within the limits of $120-150 billion, averaging around $135 billion.
There will be a gross national product of $140-180 billion, with an average of about $160 billion.
The dangerous margin of excess capital accumulations (over and above private capital formation) will run between $20–25 billion.
Private capital formation will reach about $10 billion in 1947, declining to approximately $5 billion in 1952 and thereafter levelling off at this rate.
Government war outlays will average about $15 billion, with probable limits of $10–20 billion the trend will be toward the upper limit as World War III approaches.
The national debt in 1946 will be close to $250 billion, increasing thereafter at an annual rate of $5–10 billion.
The employed labor force will be stabilized at about 50 million persons additions; due to the growth of population of working age are ignored, as it is unlikely that they will be substantial enough to alter the picture.
While it is probable that productivity of labor will increase, this factor is omitted from consideration as being too difficult to estimate and, in any case, unlikely to affect the basic analysis.
There will be a steady, but somewhat falling rate of interest.
The propensity to consume will remain fairly constant.
The rate of profit will be sustained at a level comparable to the best prewar years, its tendency to decline being offset by increasing State intervention and a relatively minor increase in the rate of surplus value.
On the basis of these assumptions, the table below of the movement of capital accumulation, government war outlays, the average standard of living and average real wages of the working class ander the Permanent War Economy follows logically.
1947 is chosen as the base year, for this is assumed to be the first “normal” post-war year. 1946 is considered as a year of transition. The concepts are presented in index ambers in order to show bask trends under the Permanent War Economy. Thus, according to the chart, the critical period will be 1934–1936. It Is at this time that the inherent contradictions of capitalism will begin to threaten seriously the newly-found economic stability, pushing society rapidly in the direction of World War
Minor divergences will not materially affect the validity of the assumptions. This is particularly true of assumptions 1–9 and 17–20, which are really political and economic generalizations. For example, the analysis still holds true even World War III should take place in 1965 or 1970, rather than, as predicted, in 1960. Assumptions 10–16 are of a an entirely different character. Here, substantial differences in magnitude might render the forecasts useless. But 12, 13, 14 and 16 require explanation. The others conform rather closely to most predictions now being made.
The figure stated in assumption 12, taken together with that stated in assumption 13, is only slightly above the estimate made by Professor Alvin Hansen (one of the outstanding authorities in this country on the theoretical aspects of investment policy) of $20–25 billion as the amount necessary to be invested in the post-war period. The level indicated have would be $30 billion, hardly a significant difference. Assumption 13 provides for private capital formation is perfectly consistent wih the hest prewar years starting with the history of capitalism since it entered the phase of permanent crisis.
Assumption 14 will appear very high to those who view the post-war situation in the same manner as the prewar situation. An interesting confirmation of the estimate made here appears in the October 1943 issue of the National Industrial Conference Board’s Economic Record in an article entitled Postwar Budget Prospects: 1945–1948:
While all the figures for future years are necessarily speculative, they are particularly so for national defense expanditures in the post-war period. Armed forces numberimg 1 million lee would constitute a smaller number than are assionsed in some quarters. If the size of the armed services should be nearer to 2 million, expenditures of about $7 billion would seem to be more nearly the level of our peacetime defense expenditures than the $4 billion shown for l948. The natureand the extent of equipment that would be used by our armed forces in the post-war era could account for variations in expenditures of several billion dollars a year. (My italics – W.J.O.)
A total military establishment of 2 million appears to be conservative in the light of plans for occupation and policing forces, plus conscription of the youth. Equipment and supplies for this size military force should easily reach $10 billion. Stockpiling and other military outlays, direct and indirect, appear to be quite capable of raising the total to $20 billion, the upper limit in the assumption.
The average of current estimates regarding the probable size of the post-war labor force is about 55 million persons. Assumption 16, therefore, is considerably below prevailing estimates; for if the difference of 5 million were to constitute unemployment in any genuine sense of the term, it is obvious that the Permanent War Economy would not be, fulfilling its main function. 50 million is a more realistic figure than 55. It is higher than all prewar records, although it is some 13 million below the current peak o about 63 million (which includes those in the armed forces) The translation of those in the armed forces into active members of the labor force, is subject to shrinkage which depending on battle casualties and related factors, should run between 1 and 2 millions. Net retirements, due to the excess of over-age people leaving jobs as compared with new entrants, should be close to 3 million. The balance of 8 million represents women who are temporary war worker and are expected to leave the employed labor force once the war is over. This figure includes current child labor and is therefore not much higher than generally accepted “guess-timates.”
The assumptions upon which the operations of the Permanent War Economy are predicated thus appear to be realistic. Among the many problems which will remainare two outstanding and closely related ones: can class relations be frozen, and can disastrous inflation be prevented. Each requires a separate article, to be adequately discussed. The first, as I have indicated, is directly related to the pre cess of capitalist accumulation in the post-war period.
It depends not only on many political factors but on severa economic ones, the most important of which is clearly the question of inflation.
It is not my belief that the Permanent War Economy wit provide an enduring solution for capitalism. But it can work for the period under consideration; and there is like wise no reason why appropriate fiscal policies (from the point of view of the capitalists, which means anti-working class in essence) will not be successful in preventing out right inflation. The national debt, astronomical as it mar seem, presents no serious problem. Assuming an annual interest burden of $7 billion, a very generous estimate, this will easily be covered out of current tax receipts. It is the type, as well as the amount, of taxes to be levied that will constitute one of the major areas of political and class conflict. The question is made still more acute by the fact that inflation appears to offer the bourgeoisie an easy way out to unload the cost of the war onto the backs of the working masses of the population. A policy of this kind however, cannot be drifted into; it must be adopted consciously. If the die is now, or soon to be, cast in favor of deliberate and uncontrolled inflation, this can only mean that the decisive section of the ruling class is determined to establish fascism as soon as possible. I see no evidence at present, to warrant this belief although, of course, there are many similarities between fascism and the Permanent War Economy. The danger of inflation is not diminished by a Permanent War Economy; on the contrary, it is steadily increased. But it seems more probable that the inflation-fascism sequence is a contender for a prime place on the agenda after World War III than in the post-World War II period.
Labor’s Responsibility
It is not likely that the above analysis, necessarily presented in sketchy, outline form, will meet with any enthusiastic reception. For one thing, it runs counter to all currently organized and clearly defined bodies of political thought. Orthodox Marxists (Trotskyists) have convinced themselves that only a successful proletarian revolution can end this war; otherwise fascism will rule the post-war world. New Dealers want to restore “free competition” and make capitalism humane; the only practical note amidst their absurdities is the attempt to win a fourth term for Roosevelt. Social Democrats are still for socialism in theory and capitalism in practice. In fact, all capitalist (and Stalinist) political thought will deny the possibility of a Permanent War Economy, although they will support measures leading toward its establishment.
Moreover, the imagination, courage and capacity of the human mind to project itself forward in an hour of deep social crisis and deal with reality instead of illusion has not been a very noticeable characteristic of the human species. Nevertheless, this war, which has already destroyed so many cherished illusions, will destroy many more before it is consigned to the history texts. The drift of events is toward a Permanent War Economy. What better solution has capitalism to offer? And what likelihood of an anti-capitalist solution is there at present? What may now seem fantastic to many will, as the present war draws to a close, appear to be obvious as the evidence piles up.
Upon the shoulders of the labor movement rests the real responsibility for preventing World War III. This universally-approved objective can never be achieved by the Roosevelts, Churchills, Stalins, or Chiang Kai-Sheks of this or the next decade. For the labor movement, especially its socialist-minded sector, to stand a chance to prevent the atomization of society as a result of repeated wars requires much closer and more realistic study of what is actually happening in the world today than has yet been evidenced. The basic strategic aim of socialism as the only rational alternative to capitalism needs no revision except that of modernization. It is in the field of tactics that substantial revisions are needed. A declining standard of living under a Permanent War Economy cannot be successfully fought by a labor movement whose most powerful organizations are trade unions, no matter how powerful these may be. The important battle areas will be abstruse (to the masses) economic questions, such as the size and composition of the Federal budget, taxation and fiscal policy, investment alternatives, and the like, rather than wages, profits and working conditions for specific industries or factories. These latter will still be important, to be sure, but they will largely be determined by the decisions affecting the former. This points to the necessity not only of widespread mass economic education, but of the vital need for an independent political Party of labor. Only a labor party, independent of capitalist political machines, and based upon trade unionists, is capable of coping with the problems of living under a permanent war economy.
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<h2>T.N. Vance</h2>
<h1>An Amalgam of Marx and Keynes</h1>
<h4>John Strachey’s View of Contemporary Capitalism</h4>
<h3>(August 1957)</h3>
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<p class="info">T.N.Vance, <em>An Amalgam of Marx and Keynes</em>, <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni57sum" target="new">Vol. XXIII No. 3</a>, Summer 1957, pp. :170–179.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">If capitalism (i.e. advanced capitalism such as Britain and America) can through the exercise of non-economic democratic political pressures be reformed or so controlled in its operations that progressively the average standard of living is raised, the capacity of the productive forces increased, and some type of peace maintained, then what is the need for any type of socialist movement? This question insistently intrudes itself after a reading of John Strachey’s <strong>Contemporary Capitalism</strong> <a href="#n1" name="f1">[1]</a>, despite the fact that at the end of his <em>Acknowledgments</em>, the author states: “<strong>Contemporary Capitalism</strong> is the first volume of a projected series of studies on the principles of democratic socialism.”</p>
<p>In fact, so many projected studies are indicated in the course of this one volume, that one must wish Strachey an exceptionally long life in order that he may set forth in writing his <em>magnum opus</em>. For, despite numerous disagreements that this writer has with many ideas expressed by Strachey, he is discussing questions of fundamental importance in a serious manner. Moreover, Strachey is aware that capitalism through a process of mutation, as he calls it, has changed fundamentally. In addition, while rejecting many of Marx’s principles, others are accepted. There are far too few analyses of contemporary society from the standpoint of democratic socialism to ignore Strachey because his economics are based on a curious amalgam of Marx and Keynes or because his politics appear to be acceptable to Bevan.</p>
<p>Contemporary capitalism, according to Strachey, has succeeded in raising the average standard of living’ because of trade union and leftist (democratic) pressures. Now, however, with the stage of oligopoly having been reached, there is a conflict between capitalism and democracy. “Capitalism in its latest stage, when it is progressively outgrowing the forms of ownership which were once appropriate to it, threatens to turn upon what was once its own political counterpart, namely, democracy.” (p. 344) It is the fact that capitalism through ever-increasing centralization constantly undermines the foundations of democracy that necessitates the struggle for socialism, according to Strachey It is his belief that only democratic socialists are the true fighters for democracy. The struggle for socialism is in reality the struggle for democracy. And, despite Strachey’s failure to distinguish clearly between democracy and democratic rights and between bourgeois and socialist democracy, it must be admitted that there is much truth in this dichotomy</p>
<p>If all classes in modern society before capitalist and Stalinist, were prepare to accept indefinitely the absence of democratic rights, then it is theoretically conceivable that a precarious international equilibrium could be maintained indefinitely. The apposition between capitalism and democracy is, in reality, the basic constructive theme of Strachey’s work. Among many quotable sentences of author’s thesis is the following</p>
<p class="quoteb">“Thus the continuance of effective democracy depends upon the protection of big capital’s control of the media of expression becoming absolute. And upon the continuance of effective democracy in two or three key societies of the world everything else will be found to depend.”</p>
<p class="fst">It is interesting to note Paul Homan’s evaluation of Strachey in a article in the June 1957 issue of <strong>The American Economic Review</strong>, <em>Socialist Thought in Great Britain</em>:</p>
<p class="quoteb">Strachey has now taken time out for reflective thought; his book is a restatement of his philosophical position and a misinterpretation of the process of social change. The title is somewhat misleading, because the book contains very little on the institutional characteristics of contemporary – economic organization – in fact, hardly more than a stereotype of oligopoly. What he does, essentially, is to set up two abstract creatures, capitalism and democracy, put them in the prize ring and let them fight it out, while he cheers in the corner of democracy. Capitalism is a sort of brutal monstrosity – the apotheosis of every inhumane, anti-social pursuit of private self-interest. Democracy is the champion of all generous-hearted efforts to attain general well-being and communal interest. The complete victory of democracy, would usher in socialism.</p>
<p class="fst">The professor’s sarcasm is not well taken for Strachey does have an analysis of the laws of motion of contemporary capitalism. Even if one disagrees with Strachey, which this reviewer does in certain fundamental respects that will be set forth below, the fact of the matter is that Strachey in thinking about important problems, which is more than most professors of economics permit themselves to do these days.</p>
<p>Strachey is also to be commended for realizing the importance of theory. He knows that capitalism has altered in certain of its basic characteristics in certain aspects of its functioning. He is not content with superficial description of these structural alterations, important though they may be. He wants to know “why.” He wants to be able to predict. In short, he seeks a theory of the latest stage of capitalism that will serve as a guide to action. Again, the fact that Strachey has exchanged his prewar Stalinist theories for his current amalgamation of Marx and Keynes, is hardly justification for rejecting him out of hand. In fact, how immeasurably superior is Strachey’s crude analysis of contemporary capitalism to the apologetics of bourgeois professors!</p>
<p>Strachey’s beginning is most encouraging, for he realizes that the wholesale modifications of the market that have occurred in recent years have led capitalism into a new stage. As he says,</p>
<p class="quoteb">“The first and decisive reason why an economy of large and few units exhibits new characteristics is because at a certain point in the increase of their size and decrease of their number, the managers of the remaining units begin to be able to affect prices instead of being exclusively affected by them. <em>It is impossible to exaggerate the importance of this transformation</em>.” (p. 22, italics mine – <em>T.N.V.</em>)</p>
<p class="fst">While he uses different terms, Strachey is aware of the development of state monopoly capitalism and the era of administered prices that it has ushered in, and to a certain extent of its consequences. For example (p. 31):</p>
<p class="quoteb">“Accordingly, the State has come, in the advanced industrial nations, to feel that it must, and can, control such basic things as the pattern of the distribution of income between social classes and individual citizens, instead of leaving that pattern to the consequences of the play of the market.”</p>
<p class="fst">To examine each and every argument presented by Strachey, both those with which we concur as well as those with which we disagree, as well as to indicate significant areas of omission, would require a book rather than a review article. Suffice it to say that we believe Strachey to be fundamentally correct in his emphasis on the importance of prices now being administered in large measure, rather than determined competitively in the market. The “essence of the mutation,” as the author describes it, is (p. 39):</p>
<p class="quoteb">“the ability of the producers in some, but not in all, of the spheres of production to affect prices, instead of merely being affected by them ... Thus the ability to influence prices will inevitably sap the automatic, self-regulating character of the economy. It will consequently provoke and require more and more State intervention, and will lead to an intensified struggle for the now all-important levers of economic power which will be in the hands of the State ... Thus the characteristics of the latest stage of capitalism both make possible a much higher degree of social control and at the same time make such control imperative.”</p>
<p class="fst">his is insight and understanding of a high order.</p>
<p>Strachey devotes an important section of his book to value theory in economics. While he accepts Marx’s analysis of the centralization of capital, accepting as he does the term “oligopoly” from modern bourgeois economists, he rejects the labor theory of value as faulty and the theory of ever-increasing misery as Marx’s cardinal error. Strachey notes that from Ricardo on increasing disparities occurred between the price and value of many commodities. He feels that the labor theory of value has neglected to take into account the role of capital in the determination of prices. He states (p. 67):</p>
<p class="quoteb">“<em>In other words, in real life not only man-hours of socially necessary labor but also a reward of some sort for capital entered into the determination of the points round which prices fluctuated</em>.” (Italic in original)</p>
<p class="fst">Why Strachey is under the mistaken notion that Marx ignored the role of constant capital in the determination of the price of production and henceforth of market price is a complete mystery, since he merely makes the assertion, whereas Marx devoted large part of Volume III of <strong>Capital</strong> to an explanation of these interrelationships in connection with capitalist production as a whole. The skeptics are referred merely to Chapter of Volume III, although Kautsky will serve as a good introduction. Consider just the following two paragraphs from the first chapter on Cost, Price and and Profit (<strong>Capital</strong>, Kerr edition, Volume III, pp. 38–39)</p>
<p class="quoteb">However, the cost of this commodity to the capitalist, and the actual cost of this commodity, are two vastly different amounts. That portion of the value of the commodity which consists of surplus value does not cost the capitalist anything for the reason that it costs the laborer unpaid labor. But on the basis of capitalist production, the laborer plays the role of an ingredient of productive capital as soon as he has been incorporated in the process of production. Under these circumstances the capitalist poses as the actual producer of the commodity. For this reason the cost price of a commodity to the capitalist producer necessarily appears to him as the added cost of the commodity. If we designate the cost-price by <em>k</em>, we can transcribe the formula <em>C</em>=<em>c</em>+<em>v</em>+<em>s</em> into the formula <em>C</em>=<em>k</em>+<em>s</em>, that is to say, the value of the commodity is equal to the cost plus the surplus-value.</p>
<p class="quoteb">In this way the classification of the various values making good the values the capital consumed in the production of the commodity under the term one price expresses, on the one hand, the specific character of capitalist production. The capitalist cost of the commodity is measured by the <em>expenditure of capital</em>, while the actual cost of the commodity is measured by the <em>expenditure of labor</em>. The capitalist cost-price of the commodity, then, is a quantity different from its Value, or its actual cost-price. It is smaller than the value of the commodity. For since <em>C</em>=<em>k</em>+<em>s</em>, it is evident that <em>k</em>=<em>C</em>−<em>s</em>. On the other hand, the cost-price of a commodity is by no means a mere heading in capitalist bookkeeping. The actual existence of this portion of value continually exerts its practical influence in the actual production of the commodity, because <em>it must be ever re-converted from its commodity-form, by way of the process of circulation, into the form of productive capital</em>, so the <em>cost-price of the commodity must always buy anew the elements of production consumed in its creation</em>. (Italics in last sentence only mine. – <em>T.N.V.</em>)</p>
<p class="fst">How could the originator of the theory of the increasing organic composition of capital ignore the role of capital in the determination of price? Strachey ought to acquire his economics first-hand rather than through the courtesy of Joan Robinson. Implicitly, Strachey has fallen into the common bourgeois fallacy of “productivity of capital” as distinct from “productivity of labor.” And, if he thinks he can explain the origin of profit without recourse to the labor theory value, the bourgeoisie have been trying unsuccessfully for a hundred years to develop a theory that would both explain the origin of and justify profit, and at the same time correspond to reality. It might be added that the absence of a theory of profit creates numerous difficulties for Strachey, of which he seems to be totally unaware. He does understand that the accumulation of capital is the mainspring of capitalism (<em>cf.</em> Chapter 10), but why capital is accumulated or the laws governing its accumulation he doesn’t know because Mrs. Joan Robinson, his mentor, does not know.</p>
<p>It is sufficient to quote the following from p. 247):</p>
<p class="quoteb">“What in the world, then, determines the level of investment? Mrs. Joan Robinson, in a striking passage (from her <strong>The Accumulation of Capital</strong>), declares simply that we do not know! She writes: ‘... as to what governs the level at which it’ (investment) ‘gets itself established we know very little ...’”</p>
<p class="fst">Mrs. Robinson is here feeling the need of some kind of <em>summa</em>, transcending, although including, economics and laying the basis of an inclusive science of human society, a <em>summa</em> at which Marxism is at present the sole attempt. She is confronted with the fact that her analysis has led her to conclude that the true prime mover of a capitalist economy – the decision to invest – is determined by causes which are largely outside the scope of economic analysis.</p>
<p>The absence of a theory, even a much-abused Marxist theory, leads to all kinds of difficulties. Above all, if the government, through fear of the electorate or whatever motivation one wants, decides that slumps must be avoided at all costs, and that consequently the decisions to invest (i.e. the determination of the rate and mass of capital accumulation) cannot be left in the hands of profit-seeking private capitalists, and if further this can be achieved under bourgeois democracy or under a “labor” government, then why is there a need for socialism?</p>
<p>Intuitively, Strachey feels that he must reject the labor theory of value, not because he (Strachey) does not understand it, but because he wishes to attribute to Marx an “iron law” or subsistence theory of wages as an out-growth of the labor theory of value, and hence a failure to allow for increasing productivity of labor and consequently to deny the possibility and the actuality of increasing the national product and the average standard of living. The original sin of the labor theory of value thus becomes the source of the disastrous theory of ever-increasing misery.</p>
<p>Strachey puts it this way (p. 70): “<em>Reckoning in terms of man-hours of socially necessary labor, the total national product is a given figure: all that can really be considered is its division between the social classes</em>.” (Italics in original). Why this should be so when the amount of socially necessary labor required to produce the means of sustenance of labor or for labor to reproduce itself, i.e. the value of labor-power, is clearly dependent on the general historical and specific geographic environment, is not explained by Strachey. He merely asserts it. It is as if he never bothered to read Marx, for just reading the first few hundred pages of Volume I of <strong>Capital</strong> would have destroyed his entire fallacious attack on Marx’s development of the labor theory of value and surplus value.</p>
<p>Let Marx speak for himself (Volume I, pp. 189–190):</p>
<p class="quoteb">The value of labor-power is determined, as in the case of every other commodity, by the labor-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labor of society incorporated in it. Labor-power exists only as a capacity, or power of the living individual. Its production consequently presupposes his existence. Given the individual, the production of labor-power consists in his reproduction of himself or his maintenance. For his maintenance he requires a given quantity of the means of subsistence ... the value of labor-power is the value of the means of subsistence necessary for the maintenance of the laborer ... His means of subsistence must therefore be sufficient to maintain him in his normal state as a laboring individual. His natural wants, such as food, clothing, fuel, and housing, vary according to the climatic and other physical conditions of his country. On the other hand, <em>the number and extent of his so-called necessary wants, as also the modes of satisfying them</em>, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilization of a country, more particularly on the conditions under which, and consequently the habits and degree of comfort which, the class of free laborers has been formed. In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labor-power a historical and moral element. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">In other words, since, by way of illustration, England is more civilized than, let us say, South Africa, and Strachey is accustomed to a greater degree of comfort than the South African miner, presumably the value Strachey’s means of subsistence (or of the British miner) exceeds that of the South African. And the value of the means of subsistence required for Mr. John Strachey today, or the British miner today, clearly is far greater than the value of the means of subsistence required for, say, Mr. Lytton Strachey some decades ago or that of a British miner a generation or more ago.</p>
<p>Marx was certainly guilty of many mistakes. He certainly didn’t foresee that capitalism would survive decades beyond the point where it clearly outlived its social usefulness. He also could not have been expected to have foreseen the Bolshevik revolution and the Stalinist counter-revolution. But surely before his basic thoughts are twisted and distorted, he has the right to assume that his critics (friendly they may be in the case of Strachey) will at least have made an effort to read and understand his works!</p>
<p>Strachey, however, is not concerned with what Marx wrote. He has a point to make:</p>
<p class="quoteb">“Therefore a subsistence theory of wages has always been, explicitly for Ricardo, explicitly for Marx, an essential part of labor theory of value. <em>But wages have not</em> remained at subsistence. <em></em>Therefore one vitally important commodity namely, labor power, has not even tended to sell at its value. This formidable fact has driven a great hole, not only in the labor theory of but also in the associated Ricardian-Marxian diagram of what the distribution of the national product will be among the classes. <em>It is the fact of rising real wages which has above all done the damage to the whole schema</em>.” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">It would be pretty difficult to crowd more errors into one short paragraph than Strachey does in the above. To be sure, the very next two sentences read (p. 71): “Nevertheless we shall find that it has by no means destroyed its importance as an elucidation of would happen unless tireless and drastic steps were taken to prevent. That, I repeat, is one of the reasons why it is still indispensable to master the labor theory of value.” (<em>sic</em>) It is a pity that Strachey has not followed his own advice, for one thing he cannot be accused of is having mastered the labor theory of value.</p>
<p>In passing, it should be obvious Strachey’s attributing to Marx on an “iron law” of wages requires him also to ignore the fact that Marx developed the theory of the class struggle. To summarize Marx’s central message, as does Strachey (p.102): “This is the statement that wages will in all capitalist societies tend towards what is for that time and phase a subsistence level” – which implies the influence of historical forces upon the determination of wages – and to deny the influence of the class struggle upon the level of wages, is to perpetrate an absurdity. To be sure, the forces of the class struggle cannot drive wages up to the point where for any length of time the profits of the capitalist class disappear without at the same time destroying capitalism.</p>
<p>To assert that Marx ignored the possibility that the productivity of labor could alter or increase is enough to make Marx turn over in his grave. Marx even devotes an entire chapter of Volume I of <strong>Capital</strong> to <em>Changes of Magnitude in the Price of Labor-Power and in Surplus-Value</em> (Chapter XVII), wherein he considers as the three decisive forces in determining these changes:</p>
<p class="quoteb">“(1) the length of the working day, or the extensive magnitude of labor; (2) the normal intensity of labor, its intensive magnitude, whereby a given quantity of labor is expended in a given time; (3) the productiveness of labor, whereby the same quantum of labor yields, in a given time, a greater or less quantum of product, dependent on the degree of development in the conditions of production.” (p. 569).</p>
<p class="fst">While Strachey pays homage to Marx for being the first to throw light on the business cycle, with his theory of crisis, Marx’s basic achievement was to analyze the conditions that led to, and to predict, the centralization of capital. His basic error was to assert the labor theory of value as a law rather than as a tendency. And the thing which destroys Marxism as a valid social theory is that from this labor theory of value, instead of merely asserting a tendency toward a polarization of classes, Marx predicted “ever-increasing misery” for the mass of the population. And it was this “ever-increasing misery” that would lead the masses to the revolutionary overthrow of capitalism.</p>
<p>Since, according to Strachey, in the advanced capitalist nations, the average standard of living has increased, there is no ever-increasing misery and, consequently, Marxism is outmoded as a scientific basis for socialism. There is, says Strachey, to be perfectly fair to Marx, atendency under capitalism for the entire increase in production to accrue to the benefit of the capitalist class,</p>
<p class="quoteb">“But this tendency has been overruled, in the advanced capitalist societies, but not elsewhere, by essentially non-economic forces, the existence of which Marx overlooked.” (Strachey’s emphasis, p. 129.)</p>
<p class="fst">What Marx meant by the increasing pauperization of labor (a thought which cannot be found in <strong>Capital</strong>, but only in <strong>The Communist Manifesto</strong> and certain propagandistic works) is not quite as simple as Strachey thinks. The evidence would seem to indicate that Marx based this prediction on his basic law of capital accumulation; namely, that an increase in capital accumulation leads to an increase in the industrial reserve army (unemployment). That this tendency still exists, even under the Permanent War Economy, we have shown in our original series of articles on the Permanent War Economy (cf. <strong>The New International</strong>, Vol. XVII). Nevertheless, as we have already demonstrated, the development of the Permanent War Economy stage of capitalism has altered Marx’s fundamental law of capitalist accumulation. To this extent, the doctrine of ever-increasing misery is in need of revision. Marx, so far as we can determine, never stated that the standards of living of the employed working class would deteriorate. He expected that the weight of the <em>lazarus-layers</em> of the working class (the unemployed) would carry down the average standard of living of the entire working class. Only in this sense is it proper to speak of ever-increasing misery.</p>
<p>And until the last decade, or until the development of the Permanent War Economy, it looked, as Strachey tacitly admits, that Marx was more or less correct. If, however, we are to admit that the average standard living of the employed working class is higher today than, let us say, it was two, three or four decades ago, we might try to include in this total evaluation, for surely it is part of total misery, the casualties of wartime, both in war and peace, and the psychological impact on want satisfactions on a world that lives under the constant threat of total annihilation. Moreover, as Strachey stresses, the major egalitarian trends that are truly significant occurred mainly during World War II.</p>
<p>As we stated at the outset, if capitalism can progressively raise average standards of living, and at the same time maintain a relatively peaceful international equilibrium, then it is still a viable historical system. We then need neither Marx nor Strachey but it is suggested that before everyone joins the capitalist band-wagon, we wait another decade, or even less to see if capitalism has really solved the problems of economic and political stability and progress.</p>
<p>The real significance of Strachey’s present volume is that he recognises that we have entered a new stage of capitalism, that capitalism no longer is self-regulating, that it is (and must in order to survive) be controlled. He gives Keynes great credit for recognizing that capitalism was no longer self-regulating. What he fails to see is that Keynes was the great bourgeois’ economist of the depression. His views on state intervention were acceptable only so long as the Great Depression prevailed. Once World War II and the ensuing Permanent War Economy developed, Keynes went into considerable decline, especially within American governmental circles.</p>
<p>It is interesting to note that <em>Merchant’s View</em> column in <strong>The New York Times</strong> of August 11, 1957 poses the question: “Can the national economy be controlled? It would appear that Government officials are experimenting with this problem in ways, perhaps, that appear to be baffling to the average business man.” Apparently, even <strong>The New York Times</strong> is not aware of the fact that <em>the economy has been controlled for the past decade and more</em>. The nature of the controls, their success and their impact on capitalism are necessarily subject of a future article. Suffice it to say, that we are of the opinion that under the Permanent War Economy, the capitalist state must control the economy. How long-lasting and successful this type of state intervention will be is a separate question. The permanent peace-and-prosperity school ought to wait a few years before they declare the present precarious equilibrium to be permanent.</p>
<p>After all, capitalist planning is not the same thing as socialist planning. Moreover, the capitalist world is in a curious dilemma with respect to the Stalinist sector of the world. Capitalism needs Stalinism to help maintain the existing international equilibrium and to provide a socially acceptable <em>raison d’etre</em> for the huge war outlays that alone provide the current decisive underpinnings of the entire economic system. Yet, the maintenance of Stalinism can lead to its strengthening, and the further whittling-away of the capitalist market, not to mention the ever-present danger that Stalinist political-military maneuvers will be successful and that, consequence, the physical dimensions of the capitalist world will be reduced still further.</p>
<p>Strachey would like to believe that a marriage of Keynesianism and social democracy can solve the problems of the world. In any event, he rejects any concept of the Permanent War Economy. He states (p. 295 <em>et sequitur</em>):</p>
<p class="quoteb">There is another and less palatable reason why it would be a great mistake to dismiss the Keynesian techniques as illusory. As we noted, those Marxians [Stalinists?] who are unable any longer to deny that capitalism in the nineteen-fifties is behaving very differently from what it did in the nineteen-thirties, explain that this is simply due to vast expenditures upon armaments ...</p>
<p class="quoteb">The case of these – mainly communist – critics is, briefly, as follows: “No doubt it is true that <em>if</em> a capitalist government supplements the activities of its profit-seeking entrepreneurs by itself spending or investing sufficiently massive sums, it can sustain the economy at a level of full employment. But a capitalist government will be intensely unwilling to do this <em>for peaceful purposes</em> ..<em>.</em> Such (military) government expenditure fits into the generally aggressive policies of capitalist governments of the latest stage. It is this kind of government expenditure and this kind alone which the capitalist governments have undertaken on a scale sufficient to be economically significant since 1945.” ...</p>
<p class="quoteb">Such an explanation is a crude caricature of the complex realities of the contemporary situation ... The American economy had, it is true, suffered a very shallow depression in 1948–49 ... But the figures show incontrovertibly (they will be given in a later part of this study) that this depression was over and the progress of full employment had been resumed before the outbreak of the Korean war and long before the American rearmament program began.</p>
<p class="fst">It is a pity that Strachey does not submit his figures on the American situation in the current volume, for the future of capitalism depends on the United States, not on Britain. This provides us with an opportunity, without any elaborate explanation, to present our latest figures on the relationship of war outlays to total output in the United States during the past ten years of the Permanent War Economy.</p>
<table align="center" cellspacing="1" cellpadding="1" width="550">
<tbody><tr>
<td colspan="6">
<p class="smc"><strong>Direct and Indirect War Outlays, 1947–1956 and Their Relationship to Total Output</strong><br>
(Dollar Figures in Billions)</p>
</td>
</tr>
<tr>
<td rowspan="2">
<p class="smc"> </p>
</td>
<td rowspan="2" valign="top">
<p class="smc"><em>Net<br>
National<br>
Product</em></p>
</td>
<td colspan="3">
<p class="smc"><em>WAR OUTLAYS</em></p>
</td>
<td rowspan="2">
<p class="smc"><em>Ratio of War Outlays<br>
to Total Production;<br>
Col. (4) as % of Col. (1)</em></p>
</td>
</tr>
<tr>
<td>
<p class="smc"><em>Direct</em></p>
</td>
<td>
<p class="smc"><em>Indirect</em></p>
</td>
<td>
<p class="smc"><em>Total</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em>Year</em></p>
</td>
<td>
<p class="smc">(1)</p>
</td>
<td>
<p class="smc">(2)</p>
</td>
<td>
<p class="smc">(3)</p>
</td>
<td>
<p class="smc">(4)</p>
</td>
<td>
<p class="smc">(5)</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1947</p>
</td>
<td>
<p class="smc">218.1</p>
</td>
<td>
<p class="smc">12.3</p>
</td>
<td>
<p class="smc">13.1</p>
</td>
<td>
<p class="smc">25.4</p>
</td>
<td>
<p class="smc">11.6</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1948</p>
</td>
<td>
<p class="smc">240.8</p>
</td>
<td>
<p class="smc">11.6</p>
</td>
<td>
<p class="smc">12.9</p>
</td>
<td>
<p class="smc">24.5</p>
</td>
<td>
<p class="smc">10.2</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1949</p>
</td>
<td>
<p class="smc">238.9</p>
</td>
<td>
<p class="smc">13.6</p>
</td>
<td>
<p class="smc">13.7</p>
</td>
<td>
<p class="smc">27.3</p>
</td>
<td>
<p class="smc">11.4</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1950</p>
</td>
<td>
<p class="smc">264.6</p>
</td>
<td>
<p class="smc">14.3</p>
</td>
<td>
<p class="smc">11.7</p>
</td>
<td>
<p class="smc">26.0</p>
</td>
<td>
<p class="smc"> 9.8</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1951</p>
</td>
<td>
<p class="smc">304.8</p>
</td>
<td>
<p class="smc">33.9</p>
</td>
<td>
<p class="smc"> 9.3</p>
</td>
<td>
<p class="smc">43.2</p>
</td>
<td>
<p class="smc">14.2</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952</p>
</td>
<td>
<p class="smc">321.6</p>
</td>
<td>
<p class="smc">46.4</p>
</td>
<td>
<p class="smc"> 8.0</p>
</td>
<td>
<p class="smc">54.4</p>
</td>
<td>
<p class="smc">16.9</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953</p>
</td>
<td>
<p class="smc">336.7</p>
</td>
<td>
<p class="smc">49.3</p>
</td>
<td>
<p class="smc"> 7.2</p>
</td>
<td>
<p class="smc">56.5</p>
</td>
<td>
<p class="smc">16.8</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1954</p>
</td>
<td>
<p class="smc">331.9</p>
</td>
<td>
<p class="smc">41.2</p>
</td>
<td>
<p class="smc"> 6.9</p>
</td>
<td>
<p class="smc">48.1</p>
</td>
<td>
<p class="smc">14.5</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1955</p>
</td>
<td>
<p class="smc">359.5</p>
</td>
<td>
<p class="smc">39.1</p>
</td>
<td>
<p class="smc"> 7.6</p>
</td>
<td>
<p class="smc">46.7</p>
</td>
<td>
<p class="smc">13.0</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1956</p>
</td>
<td>
<p class="smc">378.4</p>
</td>
<td>
<p class="smc">40.4</p>
</td>
<td>
<p class="smc"> 7.6</p>
</td>
<td>
<p class="smc">48.0</p>
</td>
<td>
<p class="smc">12.7</p>
</td>
</tr>
<tr>
<td colspan="6">
<p class="sm1"><small><em>Source:</em> July 1957 <strong>Survey of Current Business</strong> for net national product and direct war outlays. Indirect war outlays calculated as explained in Part I of <em>The Permanent War Economy</em> (<a href="../../1951/permwar/part1.htm" target="new">Jan.–Feb. 1951</a> issue of <strong>The New International</strong> and the <a href="../../1953/04/pwe-eisenhower.html">March–April 1953</a> issue of <strong>The New International</strong>, pp. 94–95.</small></p>
</td>
</tr>
</tbody></table>
<p class="fst">While many of our prior actuals are herewith revised, the only important change is for the year 1947 where our present figures are considerably lower and the ratio of war outlays to total production is revised downwards from the previous 13.7% to the present 11.6%. It will be seen that in the year 1950, in the middle of which the Korean war broke out, the ratio declined below 10% to 9.8%. It should be remembered that at that point official unemployment statistics in the United States reached a total of 4,700,000. It was only the rapid increase in the ratio of war outlays to total production that prevented a serious unemployment situation from having far-reaching political effects; and, of course, it was the sharp rise in the war outlays ratio to a peak of almost 17% in 1952 and 1953 that reduced the level of unemployment to politically tolerable and relatively minor levels.</p>
<p>The gradual reduction and leveling off in war outlays in the post-Korean period has brought about a decline in the ratio of war outlays to total production. Attrition begins to set in. The big bourgeoisie demand a halt to inflation, or rather they use the concern of the working classes to prevent inflation as a device for getting the government to raise interest rates to place a squeeze on small and medium-size business. The “battle the budget” has all kinds of political motivations and overtones, but it is already clear that to the extent the government succeeds in halting inflation, the ratio of war outlays will continue to inch downward and unemployment will continue to creep upwards.</p>
<p>That the government is not entirely unaware of the economic implications of reductions in military outlays is graphically revealed by Marc Childs in his widely syndicated column of August 20, 1957, wherein he comments on “Jobs and Defense by stating, in part:</p>
<p class="quoteb">“The aviation industry is beginning to feel the effects of cutbacks in competing missile programs and in military aircraft production. <em>The resulting unemployment</em> when it is put together with pockets of joblessness, <em>has raised the fear in the administration that the rising spiral of prices may eventually and sooner rather than later – bring deflation. As a result, Sherman Adams, the assistant to the President, instructed Clarence Randall, White House adviser on trade and economic affairs, to review every government cutback that might adversely affect a plant having more than 5,000 employees</em>.</p>
<p class="quoteb">Randall is confident the economy can absorb this unemployment and continue at the present high level, but there are others not so optimistic”. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">We belong in the latter group, Strachey presumably would side with the optimists. In any case, it should already be clear (and, if not, it will become increasingly so) that contemporary capitalism, while a new stage (the Permanent War Economy), has achieved only the most precarious of equilibria, both domestically and internationally. The continual production of ever-increasing amounts of the means of consumption depends not only on constantly increasing production of the means of production, but on maintenance of the high level of production of the means of destruction. The impossibility of continuing to expand in all three departments of production will lead to a deteriorating economic situation and in the relatively near future to the beginnings of a first-rate political crisis.</p>
<table width="100%">
<tbody><tr>
<td width="75%">
<p> </p>
</td>
<td>
<p class="fst"><em>T.N. Vance</em><br>
August 1957</p>
</td>
</tr>
</tbody></table>
<h3>Footnotes</h3>
<p class="note"><a href="#f1" name="n1">1.</a> <strong>Contemporary Capitalism</strong> by John Strachey, 1956, published by Random House, Inc., 374 pp., $5.00.</p>
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T.N. Vance
An Amalgam of Marx and Keynes
John Strachey’s View of Contemporary Capitalism
(August 1957)
T.N.Vance, An Amalgam of Marx and Keynes, The New International, Vol. XXIII No. 3, Summer 1957, pp. :170–179.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
If capitalism (i.e. advanced capitalism such as Britain and America) can through the exercise of non-economic democratic political pressures be reformed or so controlled in its operations that progressively the average standard of living is raised, the capacity of the productive forces increased, and some type of peace maintained, then what is the need for any type of socialist movement? This question insistently intrudes itself after a reading of John Strachey’s Contemporary Capitalism [1], despite the fact that at the end of his Acknowledgments, the author states: “Contemporary Capitalism is the first volume of a projected series of studies on the principles of democratic socialism.”
In fact, so many projected studies are indicated in the course of this one volume, that one must wish Strachey an exceptionally long life in order that he may set forth in writing his magnum opus. For, despite numerous disagreements that this writer has with many ideas expressed by Strachey, he is discussing questions of fundamental importance in a serious manner. Moreover, Strachey is aware that capitalism through a process of mutation, as he calls it, has changed fundamentally. In addition, while rejecting many of Marx’s principles, others are accepted. There are far too few analyses of contemporary society from the standpoint of democratic socialism to ignore Strachey because his economics are based on a curious amalgam of Marx and Keynes or because his politics appear to be acceptable to Bevan.
Contemporary capitalism, according to Strachey, has succeeded in raising the average standard of living’ because of trade union and leftist (democratic) pressures. Now, however, with the stage of oligopoly having been reached, there is a conflict between capitalism and democracy. “Capitalism in its latest stage, when it is progressively outgrowing the forms of ownership which were once appropriate to it, threatens to turn upon what was once its own political counterpart, namely, democracy.” (p. 344) It is the fact that capitalism through ever-increasing centralization constantly undermines the foundations of democracy that necessitates the struggle for socialism, according to Strachey It is his belief that only democratic socialists are the true fighters for democracy. The struggle for socialism is in reality the struggle for democracy. And, despite Strachey’s failure to distinguish clearly between democracy and democratic rights and between bourgeois and socialist democracy, it must be admitted that there is much truth in this dichotomy
If all classes in modern society before capitalist and Stalinist, were prepare to accept indefinitely the absence of democratic rights, then it is theoretically conceivable that a precarious international equilibrium could be maintained indefinitely. The apposition between capitalism and democracy is, in reality, the basic constructive theme of Strachey’s work. Among many quotable sentences of author’s thesis is the following
“Thus the continuance of effective democracy depends upon the protection of big capital’s control of the media of expression becoming absolute. And upon the continuance of effective democracy in two or three key societies of the world everything else will be found to depend.”
It is interesting to note Paul Homan’s evaluation of Strachey in a article in the June 1957 issue of The American Economic Review, Socialist Thought in Great Britain:
Strachey has now taken time out for reflective thought; his book is a restatement of his philosophical position and a misinterpretation of the process of social change. The title is somewhat misleading, because the book contains very little on the institutional characteristics of contemporary – economic organization – in fact, hardly more than a stereotype of oligopoly. What he does, essentially, is to set up two abstract creatures, capitalism and democracy, put them in the prize ring and let them fight it out, while he cheers in the corner of democracy. Capitalism is a sort of brutal monstrosity – the apotheosis of every inhumane, anti-social pursuit of private self-interest. Democracy is the champion of all generous-hearted efforts to attain general well-being and communal interest. The complete victory of democracy, would usher in socialism.
The professor’s sarcasm is not well taken for Strachey does have an analysis of the laws of motion of contemporary capitalism. Even if one disagrees with Strachey, which this reviewer does in certain fundamental respects that will be set forth below, the fact of the matter is that Strachey in thinking about important problems, which is more than most professors of economics permit themselves to do these days.
Strachey is also to be commended for realizing the importance of theory. He knows that capitalism has altered in certain of its basic characteristics in certain aspects of its functioning. He is not content with superficial description of these structural alterations, important though they may be. He wants to know “why.” He wants to be able to predict. In short, he seeks a theory of the latest stage of capitalism that will serve as a guide to action. Again, the fact that Strachey has exchanged his prewar Stalinist theories for his current amalgamation of Marx and Keynes, is hardly justification for rejecting him out of hand. In fact, how immeasurably superior is Strachey’s crude analysis of contemporary capitalism to the apologetics of bourgeois professors!
Strachey’s beginning is most encouraging, for he realizes that the wholesale modifications of the market that have occurred in recent years have led capitalism into a new stage. As he says,
“The first and decisive reason why an economy of large and few units exhibits new characteristics is because at a certain point in the increase of their size and decrease of their number, the managers of the remaining units begin to be able to affect prices instead of being exclusively affected by them. It is impossible to exaggerate the importance of this transformation.” (p. 22, italics mine – T.N.V.)
While he uses different terms, Strachey is aware of the development of state monopoly capitalism and the era of administered prices that it has ushered in, and to a certain extent of its consequences. For example (p. 31):
“Accordingly, the State has come, in the advanced industrial nations, to feel that it must, and can, control such basic things as the pattern of the distribution of income between social classes and individual citizens, instead of leaving that pattern to the consequences of the play of the market.”
To examine each and every argument presented by Strachey, both those with which we concur as well as those with which we disagree, as well as to indicate significant areas of omission, would require a book rather than a review article. Suffice it to say that we believe Strachey to be fundamentally correct in his emphasis on the importance of prices now being administered in large measure, rather than determined competitively in the market. The “essence of the mutation,” as the author describes it, is (p. 39):
“the ability of the producers in some, but not in all, of the spheres of production to affect prices, instead of merely being affected by them ... Thus the ability to influence prices will inevitably sap the automatic, self-regulating character of the economy. It will consequently provoke and require more and more State intervention, and will lead to an intensified struggle for the now all-important levers of economic power which will be in the hands of the State ... Thus the characteristics of the latest stage of capitalism both make possible a much higher degree of social control and at the same time make such control imperative.”
his is insight and understanding of a high order.
Strachey devotes an important section of his book to value theory in economics. While he accepts Marx’s analysis of the centralization of capital, accepting as he does the term “oligopoly” from modern bourgeois economists, he rejects the labor theory of value as faulty and the theory of ever-increasing misery as Marx’s cardinal error. Strachey notes that from Ricardo on increasing disparities occurred between the price and value of many commodities. He feels that the labor theory of value has neglected to take into account the role of capital in the determination of prices. He states (p. 67):
“In other words, in real life not only man-hours of socially necessary labor but also a reward of some sort for capital entered into the determination of the points round which prices fluctuated.” (Italic in original)
Why Strachey is under the mistaken notion that Marx ignored the role of constant capital in the determination of the price of production and henceforth of market price is a complete mystery, since he merely makes the assertion, whereas Marx devoted large part of Volume III of Capital to an explanation of these interrelationships in connection with capitalist production as a whole. The skeptics are referred merely to Chapter of Volume III, although Kautsky will serve as a good introduction. Consider just the following two paragraphs from the first chapter on Cost, Price and and Profit (Capital, Kerr edition, Volume III, pp. 38–39)
However, the cost of this commodity to the capitalist, and the actual cost of this commodity, are two vastly different amounts. That portion of the value of the commodity which consists of surplus value does not cost the capitalist anything for the reason that it costs the laborer unpaid labor. But on the basis of capitalist production, the laborer plays the role of an ingredient of productive capital as soon as he has been incorporated in the process of production. Under these circumstances the capitalist poses as the actual producer of the commodity. For this reason the cost price of a commodity to the capitalist producer necessarily appears to him as the added cost of the commodity. If we designate the cost-price by k, we can transcribe the formula C=c+v+s into the formula C=k+s, that is to say, the value of the commodity is equal to the cost plus the surplus-value.
In this way the classification of the various values making good the values the capital consumed in the production of the commodity under the term one price expresses, on the one hand, the specific character of capitalist production. The capitalist cost of the commodity is measured by the expenditure of capital, while the actual cost of the commodity is measured by the expenditure of labor. The capitalist cost-price of the commodity, then, is a quantity different from its Value, or its actual cost-price. It is smaller than the value of the commodity. For since C=k+s, it is evident that k=C−s. On the other hand, the cost-price of a commodity is by no means a mere heading in capitalist bookkeeping. The actual existence of this portion of value continually exerts its practical influence in the actual production of the commodity, because it must be ever re-converted from its commodity-form, by way of the process of circulation, into the form of productive capital, so the cost-price of the commodity must always buy anew the elements of production consumed in its creation. (Italics in last sentence only mine. – T.N.V.)
How could the originator of the theory of the increasing organic composition of capital ignore the role of capital in the determination of price? Strachey ought to acquire his economics first-hand rather than through the courtesy of Joan Robinson. Implicitly, Strachey has fallen into the common bourgeois fallacy of “productivity of capital” as distinct from “productivity of labor.” And, if he thinks he can explain the origin of profit without recourse to the labor theory value, the bourgeoisie have been trying unsuccessfully for a hundred years to develop a theory that would both explain the origin of and justify profit, and at the same time correspond to reality. It might be added that the absence of a theory of profit creates numerous difficulties for Strachey, of which he seems to be totally unaware. He does understand that the accumulation of capital is the mainspring of capitalism (cf. Chapter 10), but why capital is accumulated or the laws governing its accumulation he doesn’t know because Mrs. Joan Robinson, his mentor, does not know.
It is sufficient to quote the following from p. 247):
“What in the world, then, determines the level of investment? Mrs. Joan Robinson, in a striking passage (from her The Accumulation of Capital), declares simply that we do not know! She writes: ‘... as to what governs the level at which it’ (investment) ‘gets itself established we know very little ...’”
Mrs. Robinson is here feeling the need of some kind of summa, transcending, although including, economics and laying the basis of an inclusive science of human society, a summa at which Marxism is at present the sole attempt. She is confronted with the fact that her analysis has led her to conclude that the true prime mover of a capitalist economy – the decision to invest – is determined by causes which are largely outside the scope of economic analysis.
The absence of a theory, even a much-abused Marxist theory, leads to all kinds of difficulties. Above all, if the government, through fear of the electorate or whatever motivation one wants, decides that slumps must be avoided at all costs, and that consequently the decisions to invest (i.e. the determination of the rate and mass of capital accumulation) cannot be left in the hands of profit-seeking private capitalists, and if further this can be achieved under bourgeois democracy or under a “labor” government, then why is there a need for socialism?
Intuitively, Strachey feels that he must reject the labor theory of value, not because he (Strachey) does not understand it, but because he wishes to attribute to Marx an “iron law” or subsistence theory of wages as an out-growth of the labor theory of value, and hence a failure to allow for increasing productivity of labor and consequently to deny the possibility and the actuality of increasing the national product and the average standard of living. The original sin of the labor theory of value thus becomes the source of the disastrous theory of ever-increasing misery.
Strachey puts it this way (p. 70): “Reckoning in terms of man-hours of socially necessary labor, the total national product is a given figure: all that can really be considered is its division between the social classes.” (Italics in original). Why this should be so when the amount of socially necessary labor required to produce the means of sustenance of labor or for labor to reproduce itself, i.e. the value of labor-power, is clearly dependent on the general historical and specific geographic environment, is not explained by Strachey. He merely asserts it. It is as if he never bothered to read Marx, for just reading the first few hundred pages of Volume I of Capital would have destroyed his entire fallacious attack on Marx’s development of the labor theory of value and surplus value.
Let Marx speak for himself (Volume I, pp. 189–190):
The value of labor-power is determined, as in the case of every other commodity, by the labor-time necessary for the production, and consequently also the reproduction, of this special article. So far as it has value, it represents no more than a definite quantity of the average labor of society incorporated in it. Labor-power exists only as a capacity, or power of the living individual. Its production consequently presupposes his existence. Given the individual, the production of labor-power consists in his reproduction of himself or his maintenance. For his maintenance he requires a given quantity of the means of subsistence ... the value of labor-power is the value of the means of subsistence necessary for the maintenance of the laborer ... His means of subsistence must therefore be sufficient to maintain him in his normal state as a laboring individual. His natural wants, such as food, clothing, fuel, and housing, vary according to the climatic and other physical conditions of his country. On the other hand, the number and extent of his so-called necessary wants, as also the modes of satisfying them, are themselves the product of historical development, and depend therefore to a great extent on the degree of civilization of a country, more particularly on the conditions under which, and consequently the habits and degree of comfort which, the class of free laborers has been formed. In contradistinction therefore to the case of other commodities, there enters into the determination of the value of labor-power a historical and moral element. (Italics mine – T.N.V.)
In other words, since, by way of illustration, England is more civilized than, let us say, South Africa, and Strachey is accustomed to a greater degree of comfort than the South African miner, presumably the value Strachey’s means of subsistence (or of the British miner) exceeds that of the South African. And the value of the means of subsistence required for Mr. John Strachey today, or the British miner today, clearly is far greater than the value of the means of subsistence required for, say, Mr. Lytton Strachey some decades ago or that of a British miner a generation or more ago.
Marx was certainly guilty of many mistakes. He certainly didn’t foresee that capitalism would survive decades beyond the point where it clearly outlived its social usefulness. He also could not have been expected to have foreseen the Bolshevik revolution and the Stalinist counter-revolution. But surely before his basic thoughts are twisted and distorted, he has the right to assume that his critics (friendly they may be in the case of Strachey) will at least have made an effort to read and understand his works!
Strachey, however, is not concerned with what Marx wrote. He has a point to make:
“Therefore a subsistence theory of wages has always been, explicitly for Ricardo, explicitly for Marx, an essential part of labor theory of value. But wages have not remained at subsistence. Therefore one vitally important commodity namely, labor power, has not even tended to sell at its value. This formidable fact has driven a great hole, not only in the labor theory of but also in the associated Ricardian-Marxian diagram of what the distribution of the national product will be among the classes. It is the fact of rising real wages which has above all done the damage to the whole schema.” (Italics mine – T.N.V.)
It would be pretty difficult to crowd more errors into one short paragraph than Strachey does in the above. To be sure, the very next two sentences read (p. 71): “Nevertheless we shall find that it has by no means destroyed its importance as an elucidation of would happen unless tireless and drastic steps were taken to prevent. That, I repeat, is one of the reasons why it is still indispensable to master the labor theory of value.” (sic) It is a pity that Strachey has not followed his own advice, for one thing he cannot be accused of is having mastered the labor theory of value.
In passing, it should be obvious Strachey’s attributing to Marx on an “iron law” of wages requires him also to ignore the fact that Marx developed the theory of the class struggle. To summarize Marx’s central message, as does Strachey (p.102): “This is the statement that wages will in all capitalist societies tend towards what is for that time and phase a subsistence level” – which implies the influence of historical forces upon the determination of wages – and to deny the influence of the class struggle upon the level of wages, is to perpetrate an absurdity. To be sure, the forces of the class struggle cannot drive wages up to the point where for any length of time the profits of the capitalist class disappear without at the same time destroying capitalism.
To assert that Marx ignored the possibility that the productivity of labor could alter or increase is enough to make Marx turn over in his grave. Marx even devotes an entire chapter of Volume I of Capital to Changes of Magnitude in the Price of Labor-Power and in Surplus-Value (Chapter XVII), wherein he considers as the three decisive forces in determining these changes:
“(1) the length of the working day, or the extensive magnitude of labor; (2) the normal intensity of labor, its intensive magnitude, whereby a given quantity of labor is expended in a given time; (3) the productiveness of labor, whereby the same quantum of labor yields, in a given time, a greater or less quantum of product, dependent on the degree of development in the conditions of production.” (p. 569).
While Strachey pays homage to Marx for being the first to throw light on the business cycle, with his theory of crisis, Marx’s basic achievement was to analyze the conditions that led to, and to predict, the centralization of capital. His basic error was to assert the labor theory of value as a law rather than as a tendency. And the thing which destroys Marxism as a valid social theory is that from this labor theory of value, instead of merely asserting a tendency toward a polarization of classes, Marx predicted “ever-increasing misery” for the mass of the population. And it was this “ever-increasing misery” that would lead the masses to the revolutionary overthrow of capitalism.
Since, according to Strachey, in the advanced capitalist nations, the average standard of living has increased, there is no ever-increasing misery and, consequently, Marxism is outmoded as a scientific basis for socialism. There is, says Strachey, to be perfectly fair to Marx, atendency under capitalism for the entire increase in production to accrue to the benefit of the capitalist class,
“But this tendency has been overruled, in the advanced capitalist societies, but not elsewhere, by essentially non-economic forces, the existence of which Marx overlooked.” (Strachey’s emphasis, p. 129.)
What Marx meant by the increasing pauperization of labor (a thought which cannot be found in Capital, but only in The Communist Manifesto and certain propagandistic works) is not quite as simple as Strachey thinks. The evidence would seem to indicate that Marx based this prediction on his basic law of capital accumulation; namely, that an increase in capital accumulation leads to an increase in the industrial reserve army (unemployment). That this tendency still exists, even under the Permanent War Economy, we have shown in our original series of articles on the Permanent War Economy (cf. The New International, Vol. XVII). Nevertheless, as we have already demonstrated, the development of the Permanent War Economy stage of capitalism has altered Marx’s fundamental law of capitalist accumulation. To this extent, the doctrine of ever-increasing misery is in need of revision. Marx, so far as we can determine, never stated that the standards of living of the employed working class would deteriorate. He expected that the weight of the lazarus-layers of the working class (the unemployed) would carry down the average standard of living of the entire working class. Only in this sense is it proper to speak of ever-increasing misery.
And until the last decade, or until the development of the Permanent War Economy, it looked, as Strachey tacitly admits, that Marx was more or less correct. If, however, we are to admit that the average standard living of the employed working class is higher today than, let us say, it was two, three or four decades ago, we might try to include in this total evaluation, for surely it is part of total misery, the casualties of wartime, both in war and peace, and the psychological impact on want satisfactions on a world that lives under the constant threat of total annihilation. Moreover, as Strachey stresses, the major egalitarian trends that are truly significant occurred mainly during World War II.
As we stated at the outset, if capitalism can progressively raise average standards of living, and at the same time maintain a relatively peaceful international equilibrium, then it is still a viable historical system. We then need neither Marx nor Strachey but it is suggested that before everyone joins the capitalist band-wagon, we wait another decade, or even less to see if capitalism has really solved the problems of economic and political stability and progress.
The real significance of Strachey’s present volume is that he recognises that we have entered a new stage of capitalism, that capitalism no longer is self-regulating, that it is (and must in order to survive) be controlled. He gives Keynes great credit for recognizing that capitalism was no longer self-regulating. What he fails to see is that Keynes was the great bourgeois’ economist of the depression. His views on state intervention were acceptable only so long as the Great Depression prevailed. Once World War II and the ensuing Permanent War Economy developed, Keynes went into considerable decline, especially within American governmental circles.
It is interesting to note that Merchant’s View column in The New York Times of August 11, 1957 poses the question: “Can the national economy be controlled? It would appear that Government officials are experimenting with this problem in ways, perhaps, that appear to be baffling to the average business man.” Apparently, even The New York Times is not aware of the fact that the economy has been controlled for the past decade and more. The nature of the controls, their success and their impact on capitalism are necessarily subject of a future article. Suffice it to say, that we are of the opinion that under the Permanent War Economy, the capitalist state must control the economy. How long-lasting and successful this type of state intervention will be is a separate question. The permanent peace-and-prosperity school ought to wait a few years before they declare the present precarious equilibrium to be permanent.
After all, capitalist planning is not the same thing as socialist planning. Moreover, the capitalist world is in a curious dilemma with respect to the Stalinist sector of the world. Capitalism needs Stalinism to help maintain the existing international equilibrium and to provide a socially acceptable raison d’etre for the huge war outlays that alone provide the current decisive underpinnings of the entire economic system. Yet, the maintenance of Stalinism can lead to its strengthening, and the further whittling-away of the capitalist market, not to mention the ever-present danger that Stalinist political-military maneuvers will be successful and that, consequence, the physical dimensions of the capitalist world will be reduced still further.
Strachey would like to believe that a marriage of Keynesianism and social democracy can solve the problems of the world. In any event, he rejects any concept of the Permanent War Economy. He states (p. 295 et sequitur):
There is another and less palatable reason why it would be a great mistake to dismiss the Keynesian techniques as illusory. As we noted, those Marxians [Stalinists?] who are unable any longer to deny that capitalism in the nineteen-fifties is behaving very differently from what it did in the nineteen-thirties, explain that this is simply due to vast expenditures upon armaments ...
The case of these – mainly communist – critics is, briefly, as follows: “No doubt it is true that if a capitalist government supplements the activities of its profit-seeking entrepreneurs by itself spending or investing sufficiently massive sums, it can sustain the economy at a level of full employment. But a capitalist government will be intensely unwilling to do this for peaceful purposes ... Such (military) government expenditure fits into the generally aggressive policies of capitalist governments of the latest stage. It is this kind of government expenditure and this kind alone which the capitalist governments have undertaken on a scale sufficient to be economically significant since 1945.” ...
Such an explanation is a crude caricature of the complex realities of the contemporary situation ... The American economy had, it is true, suffered a very shallow depression in 1948–49 ... But the figures show incontrovertibly (they will be given in a later part of this study) that this depression was over and the progress of full employment had been resumed before the outbreak of the Korean war and long before the American rearmament program began.
It is a pity that Strachey does not submit his figures on the American situation in the current volume, for the future of capitalism depends on the United States, not on Britain. This provides us with an opportunity, without any elaborate explanation, to present our latest figures on the relationship of war outlays to total output in the United States during the past ten years of the Permanent War Economy.
Direct and Indirect War Outlays, 1947–1956 and Their Relationship to Total Output
(Dollar Figures in Billions)
Net
National
Product
WAR OUTLAYS
Ratio of War Outlays
to Total Production;
Col. (4) as % of Col. (1)
Direct
Indirect
Total
Year
(1)
(2)
(3)
(4)
(5)
1947
218.1
12.3
13.1
25.4
11.6
1948
240.8
11.6
12.9
24.5
10.2
1949
238.9
13.6
13.7
27.3
11.4
1950
264.6
14.3
11.7
26.0
9.8
1951
304.8
33.9
9.3
43.2
14.2
1952
321.6
46.4
8.0
54.4
16.9
1953
336.7
49.3
7.2
56.5
16.8
1954
331.9
41.2
6.9
48.1
14.5
1955
359.5
39.1
7.6
46.7
13.0
1956
378.4
40.4
7.6
48.0
12.7
Source: July 1957 Survey of Current Business for net national product and direct war outlays. Indirect war outlays calculated as explained in Part I of The Permanent War Economy (Jan.–Feb. 1951 issue of The New International and the March–April 1953 issue of The New International, pp. 94–95.
While many of our prior actuals are herewith revised, the only important change is for the year 1947 where our present figures are considerably lower and the ratio of war outlays to total production is revised downwards from the previous 13.7% to the present 11.6%. It will be seen that in the year 1950, in the middle of which the Korean war broke out, the ratio declined below 10% to 9.8%. It should be remembered that at that point official unemployment statistics in the United States reached a total of 4,700,000. It was only the rapid increase in the ratio of war outlays to total production that prevented a serious unemployment situation from having far-reaching political effects; and, of course, it was the sharp rise in the war outlays ratio to a peak of almost 17% in 1952 and 1953 that reduced the level of unemployment to politically tolerable and relatively minor levels.
The gradual reduction and leveling off in war outlays in the post-Korean period has brought about a decline in the ratio of war outlays to total production. Attrition begins to set in. The big bourgeoisie demand a halt to inflation, or rather they use the concern of the working classes to prevent inflation as a device for getting the government to raise interest rates to place a squeeze on small and medium-size business. The “battle the budget” has all kinds of political motivations and overtones, but it is already clear that to the extent the government succeeds in halting inflation, the ratio of war outlays will continue to inch downward and unemployment will continue to creep upwards.
That the government is not entirely unaware of the economic implications of reductions in military outlays is graphically revealed by Marc Childs in his widely syndicated column of August 20, 1957, wherein he comments on “Jobs and Defense by stating, in part:
“The aviation industry is beginning to feel the effects of cutbacks in competing missile programs and in military aircraft production. The resulting unemployment when it is put together with pockets of joblessness, has raised the fear in the administration that the rising spiral of prices may eventually and sooner rather than later – bring deflation. As a result, Sherman Adams, the assistant to the President, instructed Clarence Randall, White House adviser on trade and economic affairs, to review every government cutback that might adversely affect a plant having more than 5,000 employees.
Randall is confident the economy can absorb this unemployment and continue at the present high level, but there are others not so optimistic”. (Italics mine – T.N.V.)
We belong in the latter group, Strachey presumably would side with the optimists. In any case, it should already be clear (and, if not, it will become increasingly so) that contemporary capitalism, while a new stage (the Permanent War Economy), has achieved only the most precarious of equilibria, both domestically and internationally. The continual production of ever-increasing amounts of the means of consumption depends not only on constantly increasing production of the means of production, but on maintenance of the high level of production of the means of destruction. The impossibility of continuing to expand in all three departments of production will lead to a deteriorating economic situation and in the relatively near future to the beginnings of a first-rate political crisis.
T.N. Vance
August 1957
Footnotes
1. Contemporary Capitalism by John Strachey, 1956, published by Random House, Inc., 374 pp., $5.00.
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<h2>Frank Demby</h2>
<h1>Suppose They Limit Profits to 6%,<br>
What Does It Mean?</h1>
<h3>(October 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_35" target="new">Vol. 5 No. 40</a>, 6 October 1941, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">In response to the-growing dissatisfaction with the tremendous amount of profiteering that is taking place under the “defense” program, Secretary of the Treasury Henry Morgenthau, Jr., precipitated one of the bitterest economic controversies ever touched off by the Roosevelt Administration when he proposed that the .government take all profits over 6 per cent of the capital invested. The eminent Secretary was testifying in favor of price control as the only alternative to inflation. The bombshell was let loose in response to a question from a reporter about controlling the present rise in prices. Immediately a storm arose on Capitol Hill and in the boss press about the “radical” Morgenthau trying to “carry out the New Deal program for the establishment of socialism” and “the destruction of private initiative.” Both the proposal and the response are extremely interesting and deserve the careful attention of the workers. Morgenthau was very careful to dress his proposal up as an additional measure to prevent inflation. He did not dare to mention the super-colossal profiteering going on now in all branches of industry and business. But there is no doubt that the chief motivation for the 6 per cent profit limitation is the widespread feeling that there is something slightly unethical, to say the least, when the big corporations are raking in the dough so fast that they can’t count it. <em>It strikes the masses of the population as something: less than 100 per cent patriotism when the bosses are making from 100 to 400 per cent profit in many cases – during a period officially proclaimed as a “national emergency.” This is bad for the morale of the people. It leaves the workers and the soldiers feeling very disgruntled. The common man begins to feel that he is holding the bag, so to speak, while the bosses empty it – which is as good a description of the present situation as any. Such a situation breeds strikes and unrest. Worst of all, it sharpens class antagonisms. The best way, from the point of view of the bosses, is to PRETEND to impose sacrifices on the bosses.</em><br>
</p>
<h4>We’re From Missouri</h4>
<p class="fst">We welcome the idea of a 100 per cent excess profits tax. This is an essential first step in the direction of elementary social justice. Yet I hope that our readers will forgive us if we introduce a slightly skeptical note.</p>
<p><em>In the first place, “we’re from Missouri.” We don’t believe the bosses will tolerate a 6 per cent limit on their profits – even on paper. Already, it is indicated that the government will have to “compromise” if it wants to get any bill passed which limits profits. The nature of such a “compromise” measure is not hard to guess. It will still permit the bosses to coin fabulous profits. A meaningless gesture to appease the outraged sentiment of the workers is all that can be expected from a boss government, dominated by “dollar-a-year” men. If the bosses refused to produce during the first period of the “defense” program until the Vinson-Trammell Act, limiting profits on naval order to 8 per cent, was repealed; if they virtually went on a “sit-down” strike until they got a fake excess profits bill passed, coupled with a very liberal amortization clause that allows them to write off the cost of new plants in five years instead of the customary 20 years – there doesn’t seem to be any reason for believing that the big capitalists will sit idly by and watch the government reduce their profits to a “starvation” minimum.</em></p>
<p>But, since the age of miracles has not yet passed and this war is a very serious business, let us suppose that the government gets a 6 per cent profit limitation bill passed. This brings us to the second reason for our skepticism. <em>Profits can be concealed, with or without the connivance of the Treasury’s tax experts</em>, so that what appears to be a 6 per cent profit away well turn out to be 60 or 100 per cent or more. The International Federation of Trade Unions, for example, reports that even in Germany, with a 6 per cent limit on profits, supposedly enforced by a powerful and ruthless government, the big capitalists are able to conceal fantastic profits under the legal 6 per cent clause.</p>
<p><em>One of the favorite tricks is to “water the stock.” In this favorite dodge of the big bosses, the Americans don’t have anything to learn from the Germans. The aircraft companies, among many others, are excellent examples of this technique. Let us say that a corporation has raised $10,000,000 through issuing common stock. Six per cent on this capital invested would mean that the most that could be paid out in dividends is $600,000. Now let us suppose this stock is “watered.” That is, more stock is issued than the corporation is worth. What happens? Just this – if, for example, twice the amount of stock is issued (and it only requires a “vote” of the stockholders to authorize such a maneuver), then the corporation presumably has a capital of $20,000,000. Six per cent on this amount would mean double the profit, or $1,200,000. There is practically no limit to the extent to which this profit-concealing device can be used.</em></p>
<p>And if they get tired of using this method of concealing profits, there are many others that the bosses can use and are using every day. One of the favorites is to pay out huge salaries and bonuses to the officers (for their hard work in concealing profits, of course). Such items become part of the costs of manufacturing, according to capitalist bookkeeping methods. They are, is reality, profits.<br>
</p>
<h4>What Shall We Do?</h4>
<p class="fst">There are many other methods that the bosses use to conceal their profits. Corporation lawyers are paid fancy salaries for precisely this reason and we are sure that with the incentive for concealing profits increased by a profit-limitation bill, the corporation lawyers will work overtime to find new methods to conceal profits. As long as the bosses control the economic set-up, any profit-limitation can only be a paper one.</p>
<p><em>If the government is serious in its desire to control and limit profits, then let the workers examine the books of the bosses. Only the workers know the real situation in their own factories. Only the workers can make sure that the profits of the bosses are really limited. The workers, however, will never get this right from the bosses or from the boss government. They must fight for it, make it one of their demands on the picket line. This, and only this, is the way to limit profits.</em></p>
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Frank Demby
Suppose They Limit Profits to 6%,
What Does It Mean?
(October 1941)
From Labor Action, Vol. 5 No. 40, 6 October 1941, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
In response to the-growing dissatisfaction with the tremendous amount of profiteering that is taking place under the “defense” program, Secretary of the Treasury Henry Morgenthau, Jr., precipitated one of the bitterest economic controversies ever touched off by the Roosevelt Administration when he proposed that the .government take all profits over 6 per cent of the capital invested. The eminent Secretary was testifying in favor of price control as the only alternative to inflation. The bombshell was let loose in response to a question from a reporter about controlling the present rise in prices. Immediately a storm arose on Capitol Hill and in the boss press about the “radical” Morgenthau trying to “carry out the New Deal program for the establishment of socialism” and “the destruction of private initiative.” Both the proposal and the response are extremely interesting and deserve the careful attention of the workers. Morgenthau was very careful to dress his proposal up as an additional measure to prevent inflation. He did not dare to mention the super-colossal profiteering going on now in all branches of industry and business. But there is no doubt that the chief motivation for the 6 per cent profit limitation is the widespread feeling that there is something slightly unethical, to say the least, when the big corporations are raking in the dough so fast that they can’t count it. It strikes the masses of the population as something: less than 100 per cent patriotism when the bosses are making from 100 to 400 per cent profit in many cases – during a period officially proclaimed as a “national emergency.” This is bad for the morale of the people. It leaves the workers and the soldiers feeling very disgruntled. The common man begins to feel that he is holding the bag, so to speak, while the bosses empty it – which is as good a description of the present situation as any. Such a situation breeds strikes and unrest. Worst of all, it sharpens class antagonisms. The best way, from the point of view of the bosses, is to PRETEND to impose sacrifices on the bosses.
We’re From Missouri
We welcome the idea of a 100 per cent excess profits tax. This is an essential first step in the direction of elementary social justice. Yet I hope that our readers will forgive us if we introduce a slightly skeptical note.
In the first place, “we’re from Missouri.” We don’t believe the bosses will tolerate a 6 per cent limit on their profits – even on paper. Already, it is indicated that the government will have to “compromise” if it wants to get any bill passed which limits profits. The nature of such a “compromise” measure is not hard to guess. It will still permit the bosses to coin fabulous profits. A meaningless gesture to appease the outraged sentiment of the workers is all that can be expected from a boss government, dominated by “dollar-a-year” men. If the bosses refused to produce during the first period of the “defense” program until the Vinson-Trammell Act, limiting profits on naval order to 8 per cent, was repealed; if they virtually went on a “sit-down” strike until they got a fake excess profits bill passed, coupled with a very liberal amortization clause that allows them to write off the cost of new plants in five years instead of the customary 20 years – there doesn’t seem to be any reason for believing that the big capitalists will sit idly by and watch the government reduce their profits to a “starvation” minimum.
But, since the age of miracles has not yet passed and this war is a very serious business, let us suppose that the government gets a 6 per cent profit limitation bill passed. This brings us to the second reason for our skepticism. Profits can be concealed, with or without the connivance of the Treasury’s tax experts, so that what appears to be a 6 per cent profit away well turn out to be 60 or 100 per cent or more. The International Federation of Trade Unions, for example, reports that even in Germany, with a 6 per cent limit on profits, supposedly enforced by a powerful and ruthless government, the big capitalists are able to conceal fantastic profits under the legal 6 per cent clause.
One of the favorite tricks is to “water the stock.” In this favorite dodge of the big bosses, the Americans don’t have anything to learn from the Germans. The aircraft companies, among many others, are excellent examples of this technique. Let us say that a corporation has raised $10,000,000 through issuing common stock. Six per cent on this capital invested would mean that the most that could be paid out in dividends is $600,000. Now let us suppose this stock is “watered.” That is, more stock is issued than the corporation is worth. What happens? Just this – if, for example, twice the amount of stock is issued (and it only requires a “vote” of the stockholders to authorize such a maneuver), then the corporation presumably has a capital of $20,000,000. Six per cent on this amount would mean double the profit, or $1,200,000. There is practically no limit to the extent to which this profit-concealing device can be used.
And if they get tired of using this method of concealing profits, there are many others that the bosses can use and are using every day. One of the favorites is to pay out huge salaries and bonuses to the officers (for their hard work in concealing profits, of course). Such items become part of the costs of manufacturing, according to capitalist bookkeeping methods. They are, is reality, profits.
What Shall We Do?
There are many other methods that the bosses use to conceal their profits. Corporation lawyers are paid fancy salaries for precisely this reason and we are sure that with the incentive for concealing profits increased by a profit-limitation bill, the corporation lawyers will work overtime to find new methods to conceal profits. As long as the bosses control the economic set-up, any profit-limitation can only be a paper one.
If the government is serious in its desire to control and limit profits, then let the workers examine the books of the bosses. Only the workers know the real situation in their own factories. Only the workers can make sure that the profits of the bosses are really limited. The workers, however, will never get this right from the bosses or from the boss government. They must fight for it, make it one of their demands on the picket line. This, and only this, is the way to limit profits.
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<h2>T.N. Vance</h2>
<h1>Features of U.S. Imperialism</h1>
<h3>(May 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue2.htm#ni41_05" target="new">Vol. 7 No. 4</a>, May 1941, pp. 73–76.<br>
Written by T.N Vance under the name “Frank Demby”<br>
Transcribed & marked up by Damon Maxwell for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.<br>
Proofread by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> (December 2012).</p>
<hr noshade="noshade" size="1" width="100%">
<p class="fst">EVER SINCE THE UNITED STATES became a creditor nation in 1917, the specific weight of American imperialism in world affairs has steadily grown. The maturation of American capitalism during the decade of the 1920’s brought about significant structural developments within its anatomy. These developments have greatly influenced the growth of American imperialism and its influence on the course of world history. Nowhere is this more strikingly illustrated than in the present situation, which clearly centers around the war. It is with the hope of throwing some light on this key problem that this examination of the internal structure of the American bourgeoisie and its foreign investments is undertaken.</p>
<p>The fact that the capitalist class in a particular country is far from homogeneous is certainly not a new discovery. It goes back at least as far as Marx and was clearly understood and amplified by Lenin in his study of modern finance capitalist imperialism. Nevertheless, there has been a tendency within the Marxian movement (and, it goes without saying, amongst the bourgeois economists and historians) to minimize and even to overlook the importance of the various groupings within the bourgeoisie (determined essentially by the form and location of their capital accumulations – such as finance, banking, industrial, commercial and agricultural) and to treat the various national bourgeoisies as more or less homogeneous wholes.</p>
<p>In this fashion, half-truths are paraded as the last word in realistic analysis. The democratic bourgeoisies are interested in preserving their empires. The fascist bourgeoisies are interested in acquiring these empires. Everything becomes very simple – indeed, too simple. For, in spite of all the nationalistic propaganda that they and their agents have spewed forth, the modern (twentieth century) bourgeoisie is the most internationally-minded class that history has yet produced.</p>
<p>It is necessary to begin first with a brief presentation of economic data concerning American foreign investments, for these exports of surplus capital are most important in establishing the framework within which American imperialism must operate during the coming period.</p>
<p>“Prior to the present century American investments abroad were comparatively small. An estimate by Nathaniel T. Bacon placed American investments abroad in 1900 at $500,000,000 ... Charles F. Speare placed American investments abroad in 1909 at $2,020,000,000 and John B. Osborne estimated them at $1,902,500,000 for 1912.” (Moody’s 1940 <strong>Manual of Investments</strong>). Thus, even before World War I, American capitalism was casting about for a more profitable outlet for its surplus capital accumulations. The war of 1914–1918 greatly accelerated the process. In the decade from 1912–1922, American foreign investments increased 300 per cent. Moreover, in the course of this phenomenal increase, a profound change took place in the structure of American imperialism – a change which was a direct result of the war. From a debtor nation ever since its origin, the United States became in 1917 a creditor nation.<br>
</p>
<h4>Growth of American Investments</h4>
<p class="fst">During the period of the First World War most of the financial interests of American imperialism, consisting of financial loans, trade and investments, were in Europe, and most of these were in England. But in the course of the subsequent two decades, many changes have taken place in the foreign investment position of American capital. While different sources give different estimates of the amounts invested abroad, the most official figures available are those of the Department of Commerce. These show a steady rise until 1931, as follows (these figures are based on conditions existing on January 1 of the given year):</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<th>
<p class="smc">Year</p>
</th>
<td rowspan="11">
<p class="smc"> </p>
</td>
<th>
<p class="smc">Amount</p>
</th>
</tr>
<tr>
<td>
<p class="smc">1922</p>
</td>
<td>
<p class="smr">$8,020,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1923</p>
</td>
<td>
<p class="smr">8,877,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1924</p>
</td>
<td>
<p class="smr">9,135,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1925</p>
</td>
<td>
<p class="smr">10,004,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1926</p>
</td>
<td>
<p class="smr">10,876,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1927</p>
</td>
<td>
<p class="smr">11,684,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1928</p>
</td>
<td>
<p class="smr">12,656,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1929</p>
</td>
<td>
<p class="smr">13,973,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1930</p>
</td>
<td>
<p class="smr">14,764,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1931</p>
</td>
<td>
<p class="smr">15,170,000,000</p>
</td>
</tr>
</tbody></table>
<p class="fst">This decade, in other words, represents the heyday of American imperialism. Foreign investments increased almost 100 per cent and reached the huge absolute figure of more than 15 billion dollars (some estimates place it as high as 18 billions). Interest payments and dividends on these investments annually ran to more than a billion dollars, a substantial item in the international balance of payments. The American octopus had extended its tentacles over virtually the entire globe. In so doing, it had produced some important qualitative changes. Investments in Europe remained more or less the same. The big increase occurred in the Western Hemisphere.</p>
<p>A survey made by <strong>Fortune</strong> in July 1931 gives the following figures for the year 1929-1930:</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<th>
<p class="smc">Location</p>
</th>
<th>
<p class="smc">Amount</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">Europe</p>
</td>
<td>
<p class="smr">$5,000,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Western Hemisphere</p>
</td>
<td>
<p class="smr">$9,350,000,000</p>
</td>
</tr>
<tr>
<td colspan="2">
<p class="sm1">(Latin America – $5,500,000,000)<br>
(Canada – $3,850,000,000)</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Far East</p>
</td>
<td>
<p class="smr">$1,300,000,000</p>
</td>
</tr>
<tr>
<td colspan="2">
<p class="sm1">(Asia – $900,000,000)<br>
(Australia – $400,000,000)</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Africa</p>
</td>
<td>
<p class="smr">$100,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Total</p>
</td>
<td>
<p class="smr">$15,750,000,000</p>
</td>
</tr>
</tbody></table>
<p class="fst">Note well that investments in Latin America now exceeded those in Europe. Important as this change is, its full significance only becomes apparent during the decline of about $4,000,000,000 that took place in American foreign investments during the decade of the 1930’s. From the beginning of 1931, the decline is steady, most of it being recorded in the first six years of this decade. The Department of Commerce (July 1940) records a total foreign investment of American capital at the end of 1939 of $11,365,000,000.</p>
<p>If one compares the proportionate amounts invested in different geographical areas in 1929 and in 1939, then the changes are quite striking:</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr valign="top">
<th>
<p class="smc">Area</p>
</th>
<th>
<p class="smc">Percentage of<br>
total investment<br>
1929</p>
</th>
<th>
<p class="smc">Percentage of<br>
total investment<br>
1939</p>
</th>
<th>
<p class="smc">(Amount 1939)</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">Europe</p>
</td>
<td>
<p class="smc">31</p>
</td>
<td>
<p class="smc">20</p>
</td>
<td>
<p class="smc">($2,278,000,000)</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Western Hemisphere</p>
</td>
<td>
<p class="smc">59</p>
</td>
<td>
<p class="smc">70</p>
</td>
<td>
<p class="smc">($7,915,000,000)</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Far East and Africa</p>
</td>
<td>
<p class="smc">10</p>
</td>
<td>
<p class="smc">10</p>
</td>
<td>
<p class="smc">($1,172,000,000)</p>
</td>
</tr>
</tbody></table>
<p class="fst"><em>The fact which emerges as predominant is that 70 per cent of America’s foreign investments are in the Western Hemisphere</em>, as World War II confronts American imperialism with even more decisive questions than did World War I. Moreover, the decline in the absolute amount of capital invested in Europe (which is more than 50 per cent during the last decade) has undoubtedly been accelerated during the past year as the Nazis have attempted to put their grossraumwirtschaft into operation in Europe.<br>
</p>
<h4>Banking Capital Asserts Itself</h4>
<p class="fst">In the case of World War I, American investments were largely in Europe. In the case of World War II, American investments are overwhelmingly in the Western Hemisphere. World War I saw America emerge as the dominant imperialist power of the world; almost, but not quite, “master of the world,” as Mr. Thomas W. Lament of the House of Morgan had hoped. During the decade of the 1920’s, American imperialism put Europe on rations and extended its sway through-out the world, especially in the Western Hemisphere. The decade of the 1930’s saw American imperialism enter into the period of decline that has characterized world capitalism as a whole since 1914, and many readjustments were forced upon it both internally and externally. Not the least of these was the necessity of relinquishing the attempt to reduce Europe to the status of a colonial dependency of the United States. The Western Hemisphere was found to be a more profitable and safer field for exploitation than Europe. Here, in reality, lies the origin of Roosevelt’s “Good Neighbor” policy and the imperative necessity for the Act of Havana. The position of American imperialism <em>vis-à-vis</em> World War II is clearly not quite the same as was its relation to World War I.</p>
<p>American capitalism entered the highest stage of its development – the imperialist stage – during the last years of the nineteenth century. Two events, among many, signalled the emergence of the brash youth from its precocious adolescence into the estate of manhood amongst the capitalist nations of the world. They were the Spanish-American War and the formation of the gigantic billion dollar monopoly, the United States Steel Corporation in 1901. The first event served notice on all competitors that American imperialism could not be ignored in any distribution or redistribution of the world’s markets, colonies or spheres of influence. The second event served to emphasize and to punctuate the importance of the first. When the canny Scot, Andrew Carnegie, sold his industrial properties to the successful banker, J.P. Morgan, the process of merging banking capital with industrial capital came to a climax and then continued on a grand scale. American imperialism throughout the twentieth century is thus characterized by the domination of finance capital.</p>
<p>The fusion of banking capital with industrial capital to form finance capital does not disclose the same story in each case. On the contrary, two major trends can be noted in the United States. The more classic case is that of banking capital, through its role as promoter, invading the field of industry. Occasionally by outright purchase, but more often by various forms of intimidation and pressure, it secured control of various industries. The outstanding example of this method is, of course, the Morgan interests. The National Resources Committee in its study of <strong>The Structure of American Economy</strong> (1939) estimates that there are eight large interest groups. Of these, what is called the Morgan-First National group is by far the largest. Corporations directly controlled by this group possess assets of more than $30,000,000,000.</p>
<p>The other major method by which finance capital evolves is best exemplified by the Rockefeller interest group. Capital is originally accumulated in the field of industry or mining (in this case, oil). It expands until the pressure of accumulated surplus reserves and the struggle for survival and domination force it to acquire control of banking capital. In 1930, for example, the Rockefellers bought into the Chase National Bank and, through the help of the Banking Act of 1933, established Mr. Rockefeller’s son-in-law, Winthrop W. Aldrich, as chairman of the Board of Directors. The Board of Directors was pruned and reorganized with the object of forcing the Morgan men out. Today, the Chase National Bank, with total assets of three and one-half billion dollars, is the largest bank in the world and is clearly a Rockefeller-controlled institution.</p>
<p>The total assets of the 50 largest banks in the country plus the 200 largest non-financial corporations are approximately $100,000,000,000, or almost one-half of the total national wealth. The eight finance capital groups, Morgan-First National, Rockefeller, Kuhn-Loeb, Mellon, Chicago, DuPont, Cleveland, and Boston, control 62 per cent of the assets of this list of the principal 250 corporations. In a very measurable sense, therefore, finance capital controls the United States.<br>
</p>
<h4>The Morgan-Rockefeller Groups</h4>
<p class="fst">Within these eight major interest groups, the two most important, especially from the point of view of their ability to influence domestic and foreign policy, are the Morgan and Rockefeller groups. The other six groups generally occupy a position subordinate to the two main groups. Moreover, the Morgan and Rockefeller groups were the first to appear on the historical scene as important molders of policy. To a large extent the history of the United States during the first part of its finance imperialist phase (1890–1917) is a history of the conflicts between these two groups. Following World War I, however, during the phenomenal expansion of American imperialism in the 1920’s, many changes took place within the anatomy of American imperialism. These left their mark on the Morgan and Rockefeller groups.</p>
<p>The fairly sharply defined Morgan and Rockefeller groups have given way, as a result of a maze of interlocking directorates formed under relentless pressure by the requirements of monopolistic competition, to loose, informal groupings of “friendly enemies.” Both the Morgan and Rockefeller families have declined tremendously in importance. The dominant figures in both groups are chiefly successful business men who have demonstrated by their ability and success their right to positions of leadership within the American bourgeoisie. Changes are made as often as circumstances require within this leadership. That which gives these groups continuity is their more or less respectively similar interests plus the perpetuation of the Morgan name in close association with one group and the Rockefeller name with the other. The original antagonisms between the Morgan group and the Rockefeller group, based on the conflict between finance capital and industrial capital, have not been completely obliterated. They still remain latent and, on occasion, burst into the open. Both groups, today, are full-fledged finance capital groups. But, because of the nature of their origins, their investments are not identical. The Rockefeller group, wherever a conflict arises between industrial capital and finance capital, is inclined towards the industrial capital position. The Morgan group, however, even though its industrial interests are larger than its banking interests, is both in origin and outlook a banking group. Hence, whenever a conflict arises between industrial capital and finance capital, as more genuine finance capitalists, the Morgans incline towards the banker’s point of view.</p>
<p>Labor policy, price policy, the New Deal and domestic politics, as well as foreign policy, have, on occasion, served as battlegrounds between the two groups. The Rockefellers and their allies have been much firmer in their insistence on an open shop policy than the Morgans. They have pursued a much more rigid, inflexible price policy than the latter. They have been openly anti-New Deal, whereas the Morgans have varied in their attitude, at times being quite friendly to the Roosevelt Administration. The Rockefellers have concentrated more and more on the Republican Party, while the Morgans have continued their interest in both political machines. Finally, the original appeasement sentiment in this country (after the outbreak of the war) was pretty much concentrated in the Rockefeller group.</p>
<p>If one considers solely American direct investments abroad (this type of capital investment is the more stable and, other things being equal, will more likely influence policy than portfolio or short-term investments), the reason for the cleavage on foreign policy between the two major groups within the American capitalist class that ran from the outbreak of World War II until almost the date of the 1940 election appears to be quite clear. At the end of 1936 (whatever shifts have taken place since are relatively minor and can only serve to reinforce the general picture which I am presenting), 72 per cent of American direct investments were in the Western Hemisphere, 18 per cent were in Europe, and the remaining 10 per cent were largely in the Far East. Manufacturing, public utilities and transportation investments are chiefly Morgan. Petroleum, mining and smelting are chiefly Rockefeller. An analysis of the location of these different types of investments reveals that the bulk of the investments in Europe are Morgan-controlled; the bulk of the investments in the Far East are Rockefeller-controlled. Both groups have very important in-vestments in the Western Hemisphere.</p>
<p>From what I have said above, the following conclusions seem to be indicated:</p>
<ol>
<li>The most successful policy that American imperialism can pursue is one that will secure the maximum agreement within the American bourgeoisie. So far as foreign investments are concerned, this means that the cornerstone of American policy must be the protection of the 70 per cent of American investments in the Western Hemisphere. For it is here that all groups of American imperialists have important interests. The alliance with Canada, the Act of Havana, the creation of the Pan-American Bank, the granting of a $500,000,000 capital to the Export-Import Bank for loans to Latin America, the military plans for Hemisphere “Defense,” these are virtually the only items in American foreign policy today that have the unanimous approval of all sections of the American bourgeoisie.<br>
</li>
<li>While all American imperialists are interested in the Western Hemisphere, some are not particularly interested in Europe or the fate of England. Others are. The House of Morgan, for example, is vitally interested in defending England. More is involved here than the simple fact that the Morgans have considerable investments in England. England (the City of London) has been the world center of international trade, the focal point from which finance capital throughout the world operates. If England goes under, not only do the Morgans lose considerably in wealth, power and prestige, but world finance imperialism will be considerably shaken. If it lies within the power of Morgan and those financial interests allied with him, history will repeat itself. America will enter World War II for the same laudable purpose as last time – to protect American trade with and investments in England.<br>
</li>
<li>Some American imperialists are more worried about the threat offered by Japanese imperialism than that offered by German imperialism. They are not only the ones who have the chief stake in the Far East, but who, above all, see in the Far East a great potential sphere of interest. This vast market, embracing almost one-half of the world’s population, possesses unlimited opportunities for capital investment, securing raw materials, and for trade. It is in the Far East that the destiny of American imperialism lies, in their opinion.<br>
</li>
<li>These difference within the ranks of American imperialists, plus the course of the war to date, have forced the Roosevelt Administration to operate on the basis of the least common denominator between the two major groupings of American imperialists – Hemisphere “Defense.” The immediate purpose of an army of 4,000,000 American conscripts is likely to be as an army of occupation throughout the strategic points of the Western Hemisphere.<br>
</li>
<li>The aim of American imperialism in this war must be complete mastery of the world. Or, in the words of Wendell Willkie, a Morgan man if there ever was one in American politics: “After this war, the capital of the world will either be in Berlin or in Washington.” But there are still some differences of opinion within the bourgeoisie on how this program of world domination is to be accomplished.<br>
</li>
</ol>
<h4>The War and Group Unity</h4>
<p class="fst">The continued resistance of England, which gives currency to the forecasts of a type of Napoleonic war, has strengthened the Morgan hand. Their task now is to involve the United States in the war in a military manner as quickly as feasible. To do this, they must, if possible, cement their agreements with the Rockefellers. The government, therefore, must increasingly represent, for the bourgeoisie, a regime of national unity. Roosevelt has already taken the first steps in this direction. His appointments of Stimson and Knox, two Republicans, to the key cabinet positions of War and Navy, were more than a clever election maneuver. It was the first step in the direction of a government of national unity. The personnel of the National “Defense” setup is steadily broadened out to embrace all sections of finance capital. Aside from Stettinius, with his Morgan link, and Knudsen, with his Morgan-DuPont link, one of the most significant of recent appointees has been that of Nelson Rockefeller to the position of Coordinator of Cultural Relations with Latin America.</p>
<p>In general, the crisis of capitalism requires more and more constant intervention on the part of the capitalist state in the affairs of business. This is what Lenin called the domestic counterpart of modern finance imperialism – the development of state monopoly capitalism. An additional reason for the hastening of this process is that an immediate solution, in view of the war situation, for these internecine conflicts within the bourgeoisie is required – and only the capitalist state can solve them.</p>
<p>Along with this growing unification of the capitalist class within the capitalist state will come the hammering out of a clearly defined policy of action for American imperialism, both in regard to domestic affairs and foreign policy. Its out-lines have already been clearly indicated by Roosevelt during the past year. Price policy is to be dictated by the capitalist state in the interests of the entire capitalist class – witness the establishment of a price ceiling in steel. Prices are no longer to be subject to the vagaries of the market, as influenced by the necessities of fratricidal warfare amongst the capitalists. Profits will not be ignored. Far from it. They will now be guaranteed by the capitalist state at a higher level than the capitalists could hope to maintain by themselves in “normal” times. Along with and as a result of this tendency small business will be completely wiped out. The American industrial structure will be streamlined along the lines of 100 per cent monopoly. Since time does not permit, those industrialists who insist on the patriotic necessity of crushing labor in order to improve the war effort, will be forced by the capitalist state to acquiesce in Roosevelt’s policy of an alliance with labor, modeled after the British setup – witness the establishment of the National Defense Mediation Board and the manner of settling the Bethlehem, Ford and Harvester strikes. Foreign policy is now well formulated – witness the passage of the Lease-Lend Bill and other more recent steps and the enthusiastic approval given to these measures by the outstanding spokesmen for both the Morgan and Rockefeller groups. German imperialism is the main threat and must be defeated at all costs. This will take care of Japan and, incidentally, in the process of “helping” England, British imperialism will become subservient to the greater interests of American imperialism.</p>
<p>The tendency which was exhibited by industrial capital in France towards appeasement and towards conserving its direct investments by avoiding the defense of Paris cannot be expected here. Finance capital is too cosmopolitan, too broad in its outlook to take such a narrow view of its interests. The paucity of investments in the Far East and Africa, as well as Europe, dictates to American imperialism a policy of attempting to achieve world domination. This policy is reinforced by the tremendous pressure being exerted by untold billions of surplus capital lying idle within the country, and by the constantly growing pressure of an expanding armaments economy – which more and more exhibits a tendency to become permanent. We will not enter a foreign war, says President Roosevelt, “except in case of attack.” But American imperialist interests have already been attacked by Germany and Japan. They will be more so in the near future. How soon, then, will it be before there is another Lusitania incident, before Roosevelt and the rest of the capitalist propagandists have the pretext or invent the pretext of “attack” by a foreign power and America is launched in actual military participation in World War II?</p>
<p class="author">FRANK DEMBY</p>
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T.N. Vance
Features of U.S. Imperialism
(May 1941)
From The New International, Vol. 7 No. 4, May 1941, pp. 73–76.
Written by T.N Vance under the name “Frank Demby”
Transcribed & marked up by Damon Maxwell for the Encyclopaedia of Trotskyism On-Line (ETOL).
Proofread by Einde O’Callaghan (December 2012).
EVER SINCE THE UNITED STATES became a creditor nation in 1917, the specific weight of American imperialism in world affairs has steadily grown. The maturation of American capitalism during the decade of the 1920’s brought about significant structural developments within its anatomy. These developments have greatly influenced the growth of American imperialism and its influence on the course of world history. Nowhere is this more strikingly illustrated than in the present situation, which clearly centers around the war. It is with the hope of throwing some light on this key problem that this examination of the internal structure of the American bourgeoisie and its foreign investments is undertaken.
The fact that the capitalist class in a particular country is far from homogeneous is certainly not a new discovery. It goes back at least as far as Marx and was clearly understood and amplified by Lenin in his study of modern finance capitalist imperialism. Nevertheless, there has been a tendency within the Marxian movement (and, it goes without saying, amongst the bourgeois economists and historians) to minimize and even to overlook the importance of the various groupings within the bourgeoisie (determined essentially by the form and location of their capital accumulations – such as finance, banking, industrial, commercial and agricultural) and to treat the various national bourgeoisies as more or less homogeneous wholes.
In this fashion, half-truths are paraded as the last word in realistic analysis. The democratic bourgeoisies are interested in preserving their empires. The fascist bourgeoisies are interested in acquiring these empires. Everything becomes very simple – indeed, too simple. For, in spite of all the nationalistic propaganda that they and their agents have spewed forth, the modern (twentieth century) bourgeoisie is the most internationally-minded class that history has yet produced.
It is necessary to begin first with a brief presentation of economic data concerning American foreign investments, for these exports of surplus capital are most important in establishing the framework within which American imperialism must operate during the coming period.
“Prior to the present century American investments abroad were comparatively small. An estimate by Nathaniel T. Bacon placed American investments abroad in 1900 at $500,000,000 ... Charles F. Speare placed American investments abroad in 1909 at $2,020,000,000 and John B. Osborne estimated them at $1,902,500,000 for 1912.” (Moody’s 1940 Manual of Investments). Thus, even before World War I, American capitalism was casting about for a more profitable outlet for its surplus capital accumulations. The war of 1914–1918 greatly accelerated the process. In the decade from 1912–1922, American foreign investments increased 300 per cent. Moreover, in the course of this phenomenal increase, a profound change took place in the structure of American imperialism – a change which was a direct result of the war. From a debtor nation ever since its origin, the United States became in 1917 a creditor nation.
Growth of American Investments
During the period of the First World War most of the financial interests of American imperialism, consisting of financial loans, trade and investments, were in Europe, and most of these were in England. But in the course of the subsequent two decades, many changes have taken place in the foreign investment position of American capital. While different sources give different estimates of the amounts invested abroad, the most official figures available are those of the Department of Commerce. These show a steady rise until 1931, as follows (these figures are based on conditions existing on January 1 of the given year):
Year
Amount
1922
$8,020,000,000
1923
8,877,000,000
1924
9,135,000,000
1925
10,004,000,000
1926
10,876,000,000
1927
11,684,000,000
1928
12,656,000,000
1929
13,973,000,000
1930
14,764,000,000
1931
15,170,000,000
This decade, in other words, represents the heyday of American imperialism. Foreign investments increased almost 100 per cent and reached the huge absolute figure of more than 15 billion dollars (some estimates place it as high as 18 billions). Interest payments and dividends on these investments annually ran to more than a billion dollars, a substantial item in the international balance of payments. The American octopus had extended its tentacles over virtually the entire globe. In so doing, it had produced some important qualitative changes. Investments in Europe remained more or less the same. The big increase occurred in the Western Hemisphere.
A survey made by Fortune in July 1931 gives the following figures for the year 1929-1930:
Location
Amount
Europe
$5,000,000,000
Western Hemisphere
$9,350,000,000
(Latin America – $5,500,000,000)
(Canada – $3,850,000,000)
Far East
$1,300,000,000
(Asia – $900,000,000)
(Australia – $400,000,000)
Africa
$100,000,000
Total
$15,750,000,000
Note well that investments in Latin America now exceeded those in Europe. Important as this change is, its full significance only becomes apparent during the decline of about $4,000,000,000 that took place in American foreign investments during the decade of the 1930’s. From the beginning of 1931, the decline is steady, most of it being recorded in the first six years of this decade. The Department of Commerce (July 1940) records a total foreign investment of American capital at the end of 1939 of $11,365,000,000.
If one compares the proportionate amounts invested in different geographical areas in 1929 and in 1939, then the changes are quite striking:
Area
Percentage of
total investment
1929
Percentage of
total investment
1939
(Amount 1939)
Europe
31
20
($2,278,000,000)
Western Hemisphere
59
70
($7,915,000,000)
Far East and Africa
10
10
($1,172,000,000)
The fact which emerges as predominant is that 70 per cent of America’s foreign investments are in the Western Hemisphere, as World War II confronts American imperialism with even more decisive questions than did World War I. Moreover, the decline in the absolute amount of capital invested in Europe (which is more than 50 per cent during the last decade) has undoubtedly been accelerated during the past year as the Nazis have attempted to put their grossraumwirtschaft into operation in Europe.
Banking Capital Asserts Itself
In the case of World War I, American investments were largely in Europe. In the case of World War II, American investments are overwhelmingly in the Western Hemisphere. World War I saw America emerge as the dominant imperialist power of the world; almost, but not quite, “master of the world,” as Mr. Thomas W. Lament of the House of Morgan had hoped. During the decade of the 1920’s, American imperialism put Europe on rations and extended its sway through-out the world, especially in the Western Hemisphere. The decade of the 1930’s saw American imperialism enter into the period of decline that has characterized world capitalism as a whole since 1914, and many readjustments were forced upon it both internally and externally. Not the least of these was the necessity of relinquishing the attempt to reduce Europe to the status of a colonial dependency of the United States. The Western Hemisphere was found to be a more profitable and safer field for exploitation than Europe. Here, in reality, lies the origin of Roosevelt’s “Good Neighbor” policy and the imperative necessity for the Act of Havana. The position of American imperialism vis-à-vis World War II is clearly not quite the same as was its relation to World War I.
American capitalism entered the highest stage of its development – the imperialist stage – during the last years of the nineteenth century. Two events, among many, signalled the emergence of the brash youth from its precocious adolescence into the estate of manhood amongst the capitalist nations of the world. They were the Spanish-American War and the formation of the gigantic billion dollar monopoly, the United States Steel Corporation in 1901. The first event served notice on all competitors that American imperialism could not be ignored in any distribution or redistribution of the world’s markets, colonies or spheres of influence. The second event served to emphasize and to punctuate the importance of the first. When the canny Scot, Andrew Carnegie, sold his industrial properties to the successful banker, J.P. Morgan, the process of merging banking capital with industrial capital came to a climax and then continued on a grand scale. American imperialism throughout the twentieth century is thus characterized by the domination of finance capital.
The fusion of banking capital with industrial capital to form finance capital does not disclose the same story in each case. On the contrary, two major trends can be noted in the United States. The more classic case is that of banking capital, through its role as promoter, invading the field of industry. Occasionally by outright purchase, but more often by various forms of intimidation and pressure, it secured control of various industries. The outstanding example of this method is, of course, the Morgan interests. The National Resources Committee in its study of The Structure of American Economy (1939) estimates that there are eight large interest groups. Of these, what is called the Morgan-First National group is by far the largest. Corporations directly controlled by this group possess assets of more than $30,000,000,000.
The other major method by which finance capital evolves is best exemplified by the Rockefeller interest group. Capital is originally accumulated in the field of industry or mining (in this case, oil). It expands until the pressure of accumulated surplus reserves and the struggle for survival and domination force it to acquire control of banking capital. In 1930, for example, the Rockefellers bought into the Chase National Bank and, through the help of the Banking Act of 1933, established Mr. Rockefeller’s son-in-law, Winthrop W. Aldrich, as chairman of the Board of Directors. The Board of Directors was pruned and reorganized with the object of forcing the Morgan men out. Today, the Chase National Bank, with total assets of three and one-half billion dollars, is the largest bank in the world and is clearly a Rockefeller-controlled institution.
The total assets of the 50 largest banks in the country plus the 200 largest non-financial corporations are approximately $100,000,000,000, or almost one-half of the total national wealth. The eight finance capital groups, Morgan-First National, Rockefeller, Kuhn-Loeb, Mellon, Chicago, DuPont, Cleveland, and Boston, control 62 per cent of the assets of this list of the principal 250 corporations. In a very measurable sense, therefore, finance capital controls the United States.
The Morgan-Rockefeller Groups
Within these eight major interest groups, the two most important, especially from the point of view of their ability to influence domestic and foreign policy, are the Morgan and Rockefeller groups. The other six groups generally occupy a position subordinate to the two main groups. Moreover, the Morgan and Rockefeller groups were the first to appear on the historical scene as important molders of policy. To a large extent the history of the United States during the first part of its finance imperialist phase (1890–1917) is a history of the conflicts between these two groups. Following World War I, however, during the phenomenal expansion of American imperialism in the 1920’s, many changes took place within the anatomy of American imperialism. These left their mark on the Morgan and Rockefeller groups.
The fairly sharply defined Morgan and Rockefeller groups have given way, as a result of a maze of interlocking directorates formed under relentless pressure by the requirements of monopolistic competition, to loose, informal groupings of “friendly enemies.” Both the Morgan and Rockefeller families have declined tremendously in importance. The dominant figures in both groups are chiefly successful business men who have demonstrated by their ability and success their right to positions of leadership within the American bourgeoisie. Changes are made as often as circumstances require within this leadership. That which gives these groups continuity is their more or less respectively similar interests plus the perpetuation of the Morgan name in close association with one group and the Rockefeller name with the other. The original antagonisms between the Morgan group and the Rockefeller group, based on the conflict between finance capital and industrial capital, have not been completely obliterated. They still remain latent and, on occasion, burst into the open. Both groups, today, are full-fledged finance capital groups. But, because of the nature of their origins, their investments are not identical. The Rockefeller group, wherever a conflict arises between industrial capital and finance capital, is inclined towards the industrial capital position. The Morgan group, however, even though its industrial interests are larger than its banking interests, is both in origin and outlook a banking group. Hence, whenever a conflict arises between industrial capital and finance capital, as more genuine finance capitalists, the Morgans incline towards the banker’s point of view.
Labor policy, price policy, the New Deal and domestic politics, as well as foreign policy, have, on occasion, served as battlegrounds between the two groups. The Rockefellers and their allies have been much firmer in their insistence on an open shop policy than the Morgans. They have pursued a much more rigid, inflexible price policy than the latter. They have been openly anti-New Deal, whereas the Morgans have varied in their attitude, at times being quite friendly to the Roosevelt Administration. The Rockefellers have concentrated more and more on the Republican Party, while the Morgans have continued their interest in both political machines. Finally, the original appeasement sentiment in this country (after the outbreak of the war) was pretty much concentrated in the Rockefeller group.
If one considers solely American direct investments abroad (this type of capital investment is the more stable and, other things being equal, will more likely influence policy than portfolio or short-term investments), the reason for the cleavage on foreign policy between the two major groups within the American capitalist class that ran from the outbreak of World War II until almost the date of the 1940 election appears to be quite clear. At the end of 1936 (whatever shifts have taken place since are relatively minor and can only serve to reinforce the general picture which I am presenting), 72 per cent of American direct investments were in the Western Hemisphere, 18 per cent were in Europe, and the remaining 10 per cent were largely in the Far East. Manufacturing, public utilities and transportation investments are chiefly Morgan. Petroleum, mining and smelting are chiefly Rockefeller. An analysis of the location of these different types of investments reveals that the bulk of the investments in Europe are Morgan-controlled; the bulk of the investments in the Far East are Rockefeller-controlled. Both groups have very important in-vestments in the Western Hemisphere.
From what I have said above, the following conclusions seem to be indicated:
The most successful policy that American imperialism can pursue is one that will secure the maximum agreement within the American bourgeoisie. So far as foreign investments are concerned, this means that the cornerstone of American policy must be the protection of the 70 per cent of American investments in the Western Hemisphere. For it is here that all groups of American imperialists have important interests. The alliance with Canada, the Act of Havana, the creation of the Pan-American Bank, the granting of a $500,000,000 capital to the Export-Import Bank for loans to Latin America, the military plans for Hemisphere “Defense,” these are virtually the only items in American foreign policy today that have the unanimous approval of all sections of the American bourgeoisie.
While all American imperialists are interested in the Western Hemisphere, some are not particularly interested in Europe or the fate of England. Others are. The House of Morgan, for example, is vitally interested in defending England. More is involved here than the simple fact that the Morgans have considerable investments in England. England (the City of London) has been the world center of international trade, the focal point from which finance capital throughout the world operates. If England goes under, not only do the Morgans lose considerably in wealth, power and prestige, but world finance imperialism will be considerably shaken. If it lies within the power of Morgan and those financial interests allied with him, history will repeat itself. America will enter World War II for the same laudable purpose as last time – to protect American trade with and investments in England.
Some American imperialists are more worried about the threat offered by Japanese imperialism than that offered by German imperialism. They are not only the ones who have the chief stake in the Far East, but who, above all, see in the Far East a great potential sphere of interest. This vast market, embracing almost one-half of the world’s population, possesses unlimited opportunities for capital investment, securing raw materials, and for trade. It is in the Far East that the destiny of American imperialism lies, in their opinion.
These difference within the ranks of American imperialists, plus the course of the war to date, have forced the Roosevelt Administration to operate on the basis of the least common denominator between the two major groupings of American imperialists – Hemisphere “Defense.” The immediate purpose of an army of 4,000,000 American conscripts is likely to be as an army of occupation throughout the strategic points of the Western Hemisphere.
The aim of American imperialism in this war must be complete mastery of the world. Or, in the words of Wendell Willkie, a Morgan man if there ever was one in American politics: “After this war, the capital of the world will either be in Berlin or in Washington.” But there are still some differences of opinion within the bourgeoisie on how this program of world domination is to be accomplished.
The War and Group Unity
The continued resistance of England, which gives currency to the forecasts of a type of Napoleonic war, has strengthened the Morgan hand. Their task now is to involve the United States in the war in a military manner as quickly as feasible. To do this, they must, if possible, cement their agreements with the Rockefellers. The government, therefore, must increasingly represent, for the bourgeoisie, a regime of national unity. Roosevelt has already taken the first steps in this direction. His appointments of Stimson and Knox, two Republicans, to the key cabinet positions of War and Navy, were more than a clever election maneuver. It was the first step in the direction of a government of national unity. The personnel of the National “Defense” setup is steadily broadened out to embrace all sections of finance capital. Aside from Stettinius, with his Morgan link, and Knudsen, with his Morgan-DuPont link, one of the most significant of recent appointees has been that of Nelson Rockefeller to the position of Coordinator of Cultural Relations with Latin America.
In general, the crisis of capitalism requires more and more constant intervention on the part of the capitalist state in the affairs of business. This is what Lenin called the domestic counterpart of modern finance imperialism – the development of state monopoly capitalism. An additional reason for the hastening of this process is that an immediate solution, in view of the war situation, for these internecine conflicts within the bourgeoisie is required – and only the capitalist state can solve them.
Along with this growing unification of the capitalist class within the capitalist state will come the hammering out of a clearly defined policy of action for American imperialism, both in regard to domestic affairs and foreign policy. Its out-lines have already been clearly indicated by Roosevelt during the past year. Price policy is to be dictated by the capitalist state in the interests of the entire capitalist class – witness the establishment of a price ceiling in steel. Prices are no longer to be subject to the vagaries of the market, as influenced by the necessities of fratricidal warfare amongst the capitalists. Profits will not be ignored. Far from it. They will now be guaranteed by the capitalist state at a higher level than the capitalists could hope to maintain by themselves in “normal” times. Along with and as a result of this tendency small business will be completely wiped out. The American industrial structure will be streamlined along the lines of 100 per cent monopoly. Since time does not permit, those industrialists who insist on the patriotic necessity of crushing labor in order to improve the war effort, will be forced by the capitalist state to acquiesce in Roosevelt’s policy of an alliance with labor, modeled after the British setup – witness the establishment of the National Defense Mediation Board and the manner of settling the Bethlehem, Ford and Harvester strikes. Foreign policy is now well formulated – witness the passage of the Lease-Lend Bill and other more recent steps and the enthusiastic approval given to these measures by the outstanding spokesmen for both the Morgan and Rockefeller groups. German imperialism is the main threat and must be defeated at all costs. This will take care of Japan and, incidentally, in the process of “helping” England, British imperialism will become subservient to the greater interests of American imperialism.
The tendency which was exhibited by industrial capital in France towards appeasement and towards conserving its direct investments by avoiding the defense of Paris cannot be expected here. Finance capital is too cosmopolitan, too broad in its outlook to take such a narrow view of its interests. The paucity of investments in the Far East and Africa, as well as Europe, dictates to American imperialism a policy of attempting to achieve world domination. This policy is reinforced by the tremendous pressure being exerted by untold billions of surplus capital lying idle within the country, and by the constantly growing pressure of an expanding armaments economy – which more and more exhibits a tendency to become permanent. We will not enter a foreign war, says President Roosevelt, “except in case of attack.” But American imperialist interests have already been attacked by Germany and Japan. They will be more so in the near future. How soon, then, will it be before there is another Lusitania incident, before Roosevelt and the rest of the capitalist propagandists have the pretext or invent the pretext of “attack” by a foreign power and America is launched in actual military participation in World War II?
FRANK DEMBY
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<h2>Frank L. Demby</h2>
<h1>Chautemps’ Rule Shaky Prices Rise</h1>
<h3>(September 1937)</h3>
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<p class="info">From <strong>Socialist Appeal</strong>, <a href="../../../../newspape/themilitant/socialist-appeal-1937/index.htm#sa01_06" target="new">Vol. 1 No. 6</a>, 18 September, pp. 1 & 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">In the economic sphere the French Peoples Front has above all tried to emulate Roosevelt’s New Deal. Given, however, the far weaker financial structure of France, all the contradictions of a declining capitalism are accentuated and little has been done, as compared with the United States, in the way of granting concessions to the working class. Moreover, such concessions as the workers have obtained – the 40-hour week, two weeks vacation with pay, etc. – are obviously the result of the direct class-struggle action of the workers; for, <em>where the workers have not been well organized, the Matignon agreements (which settled the strikes of June, 1936) have been violated</em> with impunity by the bosses.</p>
<p>It was under the Blum government that compulsory arbitration was made the law of the land, that the first devaluation was decreed, that the “pause” in social reforms was proclaimed. Thus, already under a so-called “Socialist” government, the French bourgeoisie – badly frightened during June of last year – had been able to reorganize itself and start a smashing offensive which leaves the workers in many cases worse off than before the Matignon agreement, and which has as its objective the wiping out of all the gains made by the workers and the corruption and eventual dissolution of all their organizations. With the virtual abolition of trade union life due to the omnipotence of the CGT bureaucracy (chiefly Stalinist-controlled now) the workers have found it almost impossible to fight against the employers. But, as the rising cost of living pinches them more and moire, they react. This explains the number of recent strikes in a country where strikes are now illegal.</p>
<p>The accumulated discontent of the workers is, indeed, ready to explode. Even the petty functionaries in the trade unions, as their standard of living declines, are ready for strike action. Naturally,, the official “Communist”, “Socialist” and CGT press speaks of “other methods besides strike action”, “we must respect the law”, “order”, “dignity”, but the anti-working class nature of every arbitration decision leaves the worker with very little confidence in such methods.</p>
<p>In addition, the criminal policy of the leadership in most of the recent strikes is sinking deeply into the consciousness of the workers. One example will suffice: In the recent hotel, restaurant and cafe strike in Paris, where the spirit of the workers was excellent, not only did the trade union bureaucracy refuse to provide the strike any sort of national solidarity in the way of funds, etc., not only did the bureaucrats negotiate a shameful contract at the very height of the strike (providing for “the re-employment of not more than 10 per cent of the strike leaders”!), but. <strong>L’Humanité</strong> and <strong>Le Populaire</strong> (official organs of the C.P. and S.P.) also proclaimed it as a victory, thus adding insult to injury. Since the workers weren’t very convinced of it, the CP sent Thorez to speak to them and to assure them that they had won a tremendous victory, and it must be all right because the C.P. is in favor of the settlement!<br>
</p>
<h4>Capitalists Profit</h4>
<p class="fst">Big industry is showing an increase in profits of about 10 per cent and more over last year, and there is a duel between the Peoples Front press and the reactionary press as to whether Blum or Chautemps should receive the credit for increasing the profits of the capitalists! The explanation of the recovery (which is no more than a temporary stabilization of the crisis, as is readily seen from any sort of careful examination of French economy), however is not hard to find. None other than Vincent Auriol, the “Socialist” Minister of Finance in the Blum cabinet, gives away the entire game when, in. his speech at the Marseilles Congress of the SP (<strong>Le Populaire</strong>, July 12, 1937), he says: “Yesterday’s war, the preparation of national defense – the broken-down arms, the new arms – <em>absorbs 72 per cent of the budget</em>.” (My italics). What more sinister comment could there be on the nature of capitalist profits! What surer indication can there be of the imminence and catastrophic character of the next depression! The entire economic fabric depends for its very life on war preparations.</p>
<p>The bourgeoisie refused to give decree powers to Blum. That Bonapartist weapon must be entrusted to one of their very own – and so, Blum was succeeded by, Chautemps, some parliamentary juggling took place. Bonnet emerged as the miracle man of the financial world. Another devaluation was put through, again lowering the standard of living of the French masses. Every effort is being made to repatriate French capital and attract foreign capital. Blum’s “pause” is not only extended, but 10 billions of francs are pared off the existing reforms in an effort to balance the budget. In little more than two months, the first Bonapartist Peoples Front government has shown the workers and masses very clearly what is in store for them.<br>
</p>
<h4>Prices Soar</h4>
<p class="fst">Prices are moving up with such astonishing rapidity that hardly one price sign is reliable. If one goes to buy cigarettes and leaves 2 fr., for that is what is marked on the box (of 10), “Pardon, monsieur, it is 2.25 fr. now.” Prices are rising so rapidly that it is almost impossible to estimate the extent of the rise. But it is clear that the whole burden of the rationalization of economy and the preparation for imperialist war is being placed on the workers. Recently, the price of metro (subway) tickets was raised 25 per cent, bus tickets 33 per cent. It is estimated that these price increases, together with increase in taxes and tariffs, which cover every conceivable commodity and service, will result in a 50 per cent rise in the cost of living for the French worker during the coming year.</p>
<p>This increase in the price of necessities, in the basic cost of living, will find a very cold reception amongst the workers. That is why almost every political tendency, from extreme right to extreme left, is agreed that this fall and early winter will be very critical and is almost certain to witness another strike wave and the fall of the Chautemps cabinet.</p>
<p class="c"><strong>(In succeeding articles Comrade Demby, who has just returned from France, will deal with the political forces in the French crisis)</strong></p>
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Frank L. Demby
Chautemps’ Rule Shaky Prices Rise
(September 1937)
From Socialist Appeal, Vol. 1 No. 6, 18 September, pp. 1 & 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
In the economic sphere the French Peoples Front has above all tried to emulate Roosevelt’s New Deal. Given, however, the far weaker financial structure of France, all the contradictions of a declining capitalism are accentuated and little has been done, as compared with the United States, in the way of granting concessions to the working class. Moreover, such concessions as the workers have obtained – the 40-hour week, two weeks vacation with pay, etc. – are obviously the result of the direct class-struggle action of the workers; for, where the workers have not been well organized, the Matignon agreements (which settled the strikes of June, 1936) have been violated with impunity by the bosses.
It was under the Blum government that compulsory arbitration was made the law of the land, that the first devaluation was decreed, that the “pause” in social reforms was proclaimed. Thus, already under a so-called “Socialist” government, the French bourgeoisie – badly frightened during June of last year – had been able to reorganize itself and start a smashing offensive which leaves the workers in many cases worse off than before the Matignon agreement, and which has as its objective the wiping out of all the gains made by the workers and the corruption and eventual dissolution of all their organizations. With the virtual abolition of trade union life due to the omnipotence of the CGT bureaucracy (chiefly Stalinist-controlled now) the workers have found it almost impossible to fight against the employers. But, as the rising cost of living pinches them more and moire, they react. This explains the number of recent strikes in a country where strikes are now illegal.
The accumulated discontent of the workers is, indeed, ready to explode. Even the petty functionaries in the trade unions, as their standard of living declines, are ready for strike action. Naturally,, the official “Communist”, “Socialist” and CGT press speaks of “other methods besides strike action”, “we must respect the law”, “order”, “dignity”, but the anti-working class nature of every arbitration decision leaves the worker with very little confidence in such methods.
In addition, the criminal policy of the leadership in most of the recent strikes is sinking deeply into the consciousness of the workers. One example will suffice: In the recent hotel, restaurant and cafe strike in Paris, where the spirit of the workers was excellent, not only did the trade union bureaucracy refuse to provide the strike any sort of national solidarity in the way of funds, etc., not only did the bureaucrats negotiate a shameful contract at the very height of the strike (providing for “the re-employment of not more than 10 per cent of the strike leaders”!), but. L’Humanité and Le Populaire (official organs of the C.P. and S.P.) also proclaimed it as a victory, thus adding insult to injury. Since the workers weren’t very convinced of it, the CP sent Thorez to speak to them and to assure them that they had won a tremendous victory, and it must be all right because the C.P. is in favor of the settlement!
Capitalists Profit
Big industry is showing an increase in profits of about 10 per cent and more over last year, and there is a duel between the Peoples Front press and the reactionary press as to whether Blum or Chautemps should receive the credit for increasing the profits of the capitalists! The explanation of the recovery (which is no more than a temporary stabilization of the crisis, as is readily seen from any sort of careful examination of French economy), however is not hard to find. None other than Vincent Auriol, the “Socialist” Minister of Finance in the Blum cabinet, gives away the entire game when, in. his speech at the Marseilles Congress of the SP (Le Populaire, July 12, 1937), he says: “Yesterday’s war, the preparation of national defense – the broken-down arms, the new arms – absorbs 72 per cent of the budget.” (My italics). What more sinister comment could there be on the nature of capitalist profits! What surer indication can there be of the imminence and catastrophic character of the next depression! The entire economic fabric depends for its very life on war preparations.
The bourgeoisie refused to give decree powers to Blum. That Bonapartist weapon must be entrusted to one of their very own – and so, Blum was succeeded by, Chautemps, some parliamentary juggling took place. Bonnet emerged as the miracle man of the financial world. Another devaluation was put through, again lowering the standard of living of the French masses. Every effort is being made to repatriate French capital and attract foreign capital. Blum’s “pause” is not only extended, but 10 billions of francs are pared off the existing reforms in an effort to balance the budget. In little more than two months, the first Bonapartist Peoples Front government has shown the workers and masses very clearly what is in store for them.
Prices Soar
Prices are moving up with such astonishing rapidity that hardly one price sign is reliable. If one goes to buy cigarettes and leaves 2 fr., for that is what is marked on the box (of 10), “Pardon, monsieur, it is 2.25 fr. now.” Prices are rising so rapidly that it is almost impossible to estimate the extent of the rise. But it is clear that the whole burden of the rationalization of economy and the preparation for imperialist war is being placed on the workers. Recently, the price of metro (subway) tickets was raised 25 per cent, bus tickets 33 per cent. It is estimated that these price increases, together with increase in taxes and tariffs, which cover every conceivable commodity and service, will result in a 50 per cent rise in the cost of living for the French worker during the coming year.
This increase in the price of necessities, in the basic cost of living, will find a very cold reception amongst the workers. That is why almost every political tendency, from extreme right to extreme left, is agreed that this fall and early winter will be very critical and is almost certain to witness another strike wave and the fall of the Chautemps cabinet.
(In succeeding articles Comrade Demby, who has just returned from France, will deal with the political forces in the French crisis)
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<h2>T.N. Vance</h2>
<h1>Economic Prospects for 1956</h1>
<h4>Capitalist Stability versus Current Economic Trends</h4>
<h3>(January 1956)</h3>
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<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni55win" target="new">Vol. XXI No. 4</a>, Winter 1955–56, pp. 215–235.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">AMERICAN CAPITALISM ACHIEVED NEW PEAKS in production, employment and income during 1955. As the January 1956 <strong>Monthly Letter</strong> of the First National City Bank puts it: “The nation has ended its busiest and most prosperous year with the indexes of over-all business activity at the highest of the year. Latest figures on production, non-farm employment, consumption, income, and investment, indicate that the trend is still upward.”</p>
<p>The <strong>New York Times</strong>’ financial editor, John G. Forrest, in the annual review of the nation’s business, on January 3, 1956, stated: “Boom all the way. That was 1955 for United States industry.” Mr. Forrest summarizes the performances of 1955 by stating:</p>
<p class="quoteb">“When the tally is struck for 1955, it probably will show a gross national product of around $387 billion. That would be 7 per cent above 1954’s total and 6 per cent above 1953’s, the previous peak.”</p>
<p class="fst">No matter what measure is taken, whether it be the Federal Reserve index of production or just such a simple index as the output of steel, or any other likely measure, there is no doubt that 1955 was the number one year so far as production is concerned in the history of American capitalism.</p>
<p>This remarkable performance of the American economy, which to a certain extent is paralleled by the rest of the capitalist economy throughout the world, has persuaded some bold apologists for the bourgeoisie and some ex-socialists to reach the conclusion that there is no longer any class struggle in the United States; that depressions arc a thing of the past and that through some miraculous process (not quite clearly understood or explained by anyone) the millennium has arrived. There is no longer any need to advocate socialism because American capitalism, under the Eisenhower Administration, has produced a land of plenty and permanent prosperity. Some even go so far as to refer to this new utopian state of affairs as the “land of permanent peace and prosperity.”</p>
<p>The process by which The Permanent War Economy becomes “permanent peace and prosperity” is a triumph for the semantic arts. The question remains, however, to what extent, if any, has capitalism under The immanent War Economy eliminated the business cycle, or, if you prefer, eliminated severe depressions?</p>
<p>The interest in the subject is such that the Chamber of Commerce of the United States has devoted an entire pamphlet to the subject, entitled, <strong>Can We Depression-Proof Our Economy?</strong> This pamphlet refers to the adjustments and increases in production that have taken place since the end of World War II, and to the fact that there are “Numerous automatic built-in stabilizers or cushions which we did not have in 1929.”</p>
<p>“All these factors,” the pamphlet concludes, “have lead some students to believe that we are more or less depression-proof; or at least, that serious general depressions are less likely to occur than formerly.” The question is then raised: “Is this optimism justified? Or, have we merely been the beneficiaries of exceptionally favorable postwar factors?”</p>
<p>The United States Chamber of Commerce then proceeds to review the “evidence.” A Prentice-Hall release is cited in which it is stated that: “It is becoming crystal clear that serious depressions have been abolished in the United States by popular vote.” (<em>Sic!</em>)</p>
<p>It is pointed out that the 1953–1954 recession was unusually mild and the fact that it did not degenerate into a full-fledged depression is most heartening and perhaps warrants the belief that there are some new factors on the scene in the form of these “built-in stabilizers,” and while no categorical statement is made, the presumption is that perhaps, at the very least, severe depressions are a thing of the past.</p>
<p>On the other hand, the Chamber of Commerce proceeds to point out to those that arc unduly complacent that they should take heed from the warning issued by J.K. Galbraith published in <strong>Harper’s</strong> magazine, October 1954, to the effect that “important people begin to explain that it cannot happen because conditions are fundamentally sound.” From which Mr. Galbraith draws the conclusion that that is precisely the time to worry because another collapse, comparable to 1929, in his opinion, is definitely possible. The Chamber of Commerce, moreover, does not lose sight of the political importance of the subject. It points out that “if we attain this target [sustained prosperity], other domestic problems will remain manageable. For international reasons as well, the attainment of this goal is important. It will refute the Marxists’ criticisms of private capitalism both here and abroad.” The question of the so-called new perspective and economic outlook, that is, permanent prosperity, has engaged the President’s Council of Economic Advisers. In their 1955 economic report to the President, they review the experiences of the 1953–54 recession and draw the following lessons (quoted by the U.S. Chamber of Commerce):</p>
<p class="quoteb">First, that wise and early action by government can stave off serious difficulties later;</p>
<p class="quoteb">Second, that contraction may be stopped in its tracks, even when governmental expenditures and budget deficits are declining, provided effective means are taken for building confidence;</p>
<p class="quoteb">Third, that monetary policy can be a powerful instrument of economic recovery, so long as the confidence of consumers and businessmen in the future remains high;</p>
<p class="quoteb">Fourth, that automatic stabilizers, such as unemployment insurance and a tax system that is elastic with respect to the national income, can be of material aid in moderating cyclical fluctuations;</p>
<p class="quoteb">Fifth, that a minor contraction in this country need not produce a severe depression abroad;</p>
<p class="quoteb">Sixth, that an expanding world economy can facilitate our own readjustments.</p>
<p class="fst">Lest the apostles of the new religion of “permanent peace and prosperity under capitalism” jump to the conclusion that they have a real ally in the United States Chamber of Commerce, let us point out that immediately after the analysis presented above and the quotation from the President’s Council of Economic Advisers, the United States Chamber of Commerce states: “It would be difficult to find a single economist who believes, as some did in the late 1920s, that we are, indeed, depression-proof.” If the United States Chamber of Commerce is not ready to take the plunge into the new camp of “permanent peace and prosperity under capitalism,” there are others who are not quite so cautious. And that is pretty much the position of Sumner H. Slichter which he has expressed in various articles, including one published in the <strong>Atlantic Monthly</strong> for May 1955 entitled, <em>Have We Conquered The Business Cycle?</em></p>
<p>While Slichter likes to leave himself an “out,” he is also fond of making headlines. For example, in a recent article of <strong>The New York Times Magazine</strong> section of December 4, 1955, dealing with the relationship of our economy to politics, Slichter states:</p>
<p class="quoteb">“A severe depression would undoubtedly sharpen the differences between the parties in the United States and would accentuate the influence of the left-wingers in the Democratic Party, <em>but the days when this country can experience anything worse than moderate or possibly mild depressions are gone forever.</em>” (My italics – <em>T.N.V.</em>)<br>
</p>
<p class="fst">WHAT ARE SOME OF THESE “BUILT-IN stabilizers” that are supposed to have eliminated severe depressions and achieved a more or less permanent modification in the business cycle? They are summarized by the United States Chamber of Commerce in the aforementioned pamphlet as follows:</p>
<p class="quoteb">(1) The quick offsetting reactions which occur in our tax structure, with the heavy reliance on the income tax; (2) Stability and size of the government expenditures; (3) The farm price support program; (4) Unemployment compensation; (5) The numerous private and public pension programs; (6) The Federal Deposit Insurance System; (7) The self-amortizing nature of most private debt; and (8) The volume of liquid assets held by individuals and businesses.</p>
<p class="fst">To the extent that these factors mean anything – and they do mean something that is very important – what is being said here is that capitalism under The Permanent War Economy has achieved a life of more or less permanent government intervention and that this government intervention has modified the business cycle.</p>
<p>Certainly the government’s Council of Economic Advisers takes credit for the fact that serious economic fluctuation or depression has been avoided in the past few years. Its chairman, Dr. Arthur F. Burns, puts it this way:</p>
<p class="quoteb">These are the basic premises that have controlled our business cycle policy in the recent past. If governmental policy in the months and years ahead continues to adhere to these premises, if government steadily maintains a watchful eye on the state of business and consumer sentiment and if it gives heed to the need of avoiding inflation as well as depression; we may, I think, be reasonably confident that – although we are likely to continue to have fluctuations in individual markets, to some degree even in the economy as a whole – we will avoid in the future the business depressions that have marred our brilliant record of free enterprise in the past.</p>
<p class="fst">This would seem to put the Council of Economic Advisers, an official government body, almost in the camp of Sumner Slichter.</p>
<p>The United States Chamber of Commerce concludes its pamphlet on this question as follows:</p>
<p class="quoteb">Are we, then, depression-proof? <em>Prolonged and deep depressions are avoidable and will not occur again, unless we take complete leave of our wits – which could be.</em> Minor fluctuations and rolling adjustments in industry after industry are inevitable. While having unfortunate aspects, they nevertheless perform a useful and essential function. Individual companies will face changing fortunes. Crises in international affairs can be upsetting. Domestic political uncertainties, threats of undue business regulation or taxation – these and many other factors could undo the promising developments in the field of stabilization. <em>Stability has to be earned.</em> (Italics in original only in the last sentence. – <em>T.N.V.</em>)</p>
<p class="fst">Is this a new era or is it not? On the one hand, severe depressions are avoidable and will not occur, that is, “unless we take complete leave of our wits,” but apparently it is possible, according to the United States Chamber of Commerce, that we may take complete leave of our wits. And one suspects that taking complete leave of our wits has reference to such measures as increasing the minimum wage law, <em>etc.</em></p>
<p>Let us not be completely disheartened because later on in its conclusion the Chamber of Commerce makes the fairly bold statement: <em>“If we have the courage to avoid excessive booms and the wit to use what we know, there is reason to believe that future instability can be kept within fairly tolerable limits.”</em> (<em>Sic!</em>) In other words, if we can avoid depressions there will be no depressions. But how do we know we can avoid depressions?</p>
<p>Lest anyone accuse the United States Chamber of Commerce of a definitive statement on a subject of this kind, we must quote the very last sentence in their brochure: “And, since the future can never be foreseen with certainty, it is always wise to <em>watch out for surprises</em>.”</p>
<p>Lest there be any possible misunderstanding on this question, let us make it perfectly clear. If capitalism can succeed in eliminating the business cycle, <em>i.e.</em>, in achieving permanent peace and prosperity, then not only has the class struggle been so transformed as to be unrecognizable but clearly there will be no need for a socialist form of society to organize the productive forces for capitalism will have guaranteed their <em>permanent </em>increase. The question, therefore, is of great theoretical and practical importance.</p>
<p>If the performance of the economy in 1955 was at record levels, the outlook for 1956 is clearly relevant. Will this boom keep rolling on and on and on, so that memories of depressions fade into the dim and distant past and pretty soon there will be no living inhabitants who recall the depression of the ’30s or the rather severe recession of ‘47 and ’48 or even the mild recession of ’53–’54?</p>
<p>The United States Chamber of Commerce is extremely bullish in its outlook for 1956. The forecast by its chief economist, Emerson P. Schmidt, states:</p>
<p class="quoteb">“The expansion which began in the summer of 1954 carried through 1955. The high Christmas sales will start 1956 off with good levels of employment, production and general economic activity. <em>The year 1956 may well be our best year in history.</em>” (My italics – <em>T.N.V.</em>)</p>
<p class="fst">There is no hedging here – “the year 1956 may well be our best year in history.” Of course, there is the qualifier “may,” but on the other hand the implication is that it should certainly be the best year in history.</p>
<p>Mr. Schmidt is a brave man and he has made these statements in a publication of the United States Chamber of Commerce, entitled <strong>Nation’s Business</strong>, which receives rather wide circulation. He states:</p>
<p class="quoteb">“To see unmistakably into the future, of course, is not given to man. Surprises – pleasant and unpleasant – are likely. But, in so far as it is possible to weigh and assess recent trends, optimism for next year is justified.”</p>
<p class="fst">The same issue of <strong>Nation’s Business</strong> (December 1955) contains an article by businessman Henry Ford II on the same subject, Outlook for ’56. Mr. Ford, in answer to the query, How does business look to you in 1956? states:</p>
<p class="quoteb">We are very optimistic. I think that it is a little early to tell about the whole year. Certainly the first half ought to be pretty good, but we have an election year coming up. People get preoccupied with candidates and issues in an election year and when feelings run high business has a tendency to run low. <em>As a result 1956 might not be quite as big as this year – but I think it ought to be a good year. </em>(My italics – <em>T.N.V.</em>)</p>
<p class="fst">“1956 will be a very prosperous year, but perhaps not quite as good as 1955.” It is possible that businessman Henry Ford II’s outlook is colored by the fact that his firm produces automobiles. In answer to the question, How about the automobile business?, Mr. Ford states:</p>
<p class="quoteb">The automobile business will have a fine year, too. My personal feeling is that it won’t be as big as 1955. How big the reduction is going to be is anybody’s guess. If we assume a 10 per cent reduction, we will still have our second biggest year. Ten per cent of what do you want to say, 7,600,000? That would still be the second biggest year after 1955.<br>
</p>
<p class="fst">WE SHALL RETURN TO THE OUTLOOK for the automobile industry. Meanwhile, let us consider a few more general statements on the business outlook for 1956. The confidential <strong>Babson’s Reports</strong> issued early in November on the 1956 forecast for stocks and bonds shows a rather sharp disagreement with the extremely bullish statements that have emanated from most sources. States Babson: “For the year ahead we are forecasting that the Babson chart index of the physical volume of business will average around 150 – some five per cent below the record 1955 mark.” Babson amplifies its general prediction by stating: “We look for a decline in general business during the first half of the year which is likely to be somewhat more vigorous than the recovery which we anticipate will set in during the last half of the year.”</p>
<p>The Babson forecast is unique in that all those who are cautious about ’56 other than Babson, state that the boom will continue to roll during the first half of the year and if there is a decline it will be in the second half. Babson, however, predicates its reverse forecast on the fact that it expects a decline in the automobile industry and that this decline will be concentrated in the first half of the year but in the second half of the year when 1957 models will be introduced very early, there will be a sharp increase. Babson also expects a sharp decline (about 15 per cent) in the home building industry in 1956. He feels that when this trend is apparent the government will then step in and take steps to revive building. There is a logical analysis here; whether it will prove to be accurate, of course, remains to be seen. The important point, however, is that here is a very reputable bourgeois outfit (whose reputation for accurate forecasting in the past is unusually good) that does not feel that the boom continues to roll on and on, but that 1955 was the peak. This, of course has important implications for the general question under analysis.</p>
<p>Of equal interest with the Babson forecast is that of <strong>Fortune Magazine</strong> according to its own blurb, “the <em>ne plus ultra</em> of business publications.” <strong>Fortune</strong>’s own summary of its 1956 economic forecast contained in its January 1956 issue under the <em>Business Roundup</em> is to the effect that:</p>
<p class="quoteb">“1956 may be a little rough on a number of businesses. This, despite the fact that it starts out as the best year yet: in ’56 the Gross National Product rate will edge up to around $403 billion from ’55’s sensational year-end rate of nearly $400 billion. But there will be a slight down-turn about midyear.”</p>
<p class="fst">More interesting is <strong>Fortune</strong>’s forecast by major industries:</p>
<p class="quoteb">If you’re in any branch of capital goods – machinery, plant, equipment – things look good. But home goods are slowing, steel will go down by midyear, home building starts will be off 100,000 units or so, car buying by a million or more. All consumer businesses are up against the competition of $35 billion in consumer debt repayments during ’56, up $4 billion from ’55. <em>And unemployment could rise to over four million, since two million jobs will be cut out by increased productivity, and some 700,000 new workers will join the labor force ...</em>” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Most business men are optimistic about 1956. Retailers particularly reflect the results of a study made in October by the Survey Research Center of the University of Michigan which indicated that 71 per cent of all people expect good times to continue at least through the first eight months of 1956.</p>
<p>At the recent meetings of the American Economics Association there was much discussion about this question, and it was noteworthy that there is now some hedging about the continuation of the business boom. As <strong>The New York Times</strong> in Mr. Forrest’s column of January 1 puts it:</p>
<p class="quoteb">“Some economists last week differed on the 1956 business picture, with several leaning to the theory that the boom would reach its peak early in the year and that caution should be the watchword after that.”</p>
<p class="fst">The only really discordant note was struck by Dr. Edwin G. Nourse, former chairman of President Truman’s Council of Economic Advisers. Dr. Nourse predicted (according to the same article in <strong>The New York Times</strong>): <em>“We should contemplate a drop of 15 or even 20 per cent in business during 1956.”</em> (Italics mine – <em>T.N.V.</em>) A drop of this magnitude would mean a decline of $60 to $70 billion in gross national product and a catastrophic increase in unemployment. Here we would have not just a mild depression, but from every point of view a rather severe one.</p>
<p>There can be no doubt that Nourse was expressing what might well be termed “the Democratic point of view” on the business outlook. As a matter of record, this view was expressed by the supplemental views of the Democrats on the Joint Committee on the Economic Report in connection with the January 1955 <em>Economic Report of the President</em>. (Report No. 60, 84th Congress, First Session). This supplemental report showed that while they agreed that recovery had taken place from the trough of the 1953–54 recession, we were not really out of the woods, and that there was great danger that developments in the automobile industry and related industries such as construction could cause a downturn of fairly sizable proportions.</p>
<p>To quote the Democratic members (Senators Douglas, Sparkman and O’Mahoney and Representatives Patman, Bolling, Mills and Kelley):</p>
<p class="quoteb">Because the president’s confident expectations for the coming year are centered on a shift of inventory policy from liquidation to accumulation, on the recovery in automobile production, and on rising expenditure for new construction, it is necessary to examine carefully these areas. These may not be sustained throughout the year. A sharp cut-back in automobile production in the last half of the year would have pervasive effects in the steel, coal, textile, and accessory parts industries. Some analysts expressed uneasiness whether the recent rise in construction will persist. If, however, the automobile or construction industries should encounter heavy weather in the last half of the year, and if other segments of the economy do not recover sufficiently to offset them, it would be a matter of prudent and judicious action to fly the storm warnings. Economic declines are like landslides – it takes less to stop them early than after they gain momentum.</p>
<p class="fst">The record shows that the Republicans were better forecasters in ’55 than 1956, but the Democrats have held to their basic analysis. What they are doing (and Nourse is clearly one of their most influential spokesmen) is to project into 1956 the forecast they had made for the later part of 1955.</p>
<p>What does Nourse base his views on? Actually, he is basing himself on a better understanding of the long-run and traditional functionings of capitalism than many of our new apostles of the virtues of “free private enterprise.” Nourse has devoted some study apparently to some of the fundamental trends at work, particularly in relation to automation and increasing productivity. His testimony on October 28 before the Subcommittee on Automation of the Joint Committee on the Economic Report received a proper headline in <strong>The New York Times</strong> of October 29, 1955, namely: <em>Economist Fears Overproduction</em>.</p>
<p>Dr. Nourse’s testimony is worth study. He states:</p>
<p class="quoteb">The real change came when we passed from this kind of continuous process mechanization to that in which electronic devices make it possible to dispense to considerable extent with the mental element in manual control and to use the feedback principle extensively. Under this principle electronic mechanisms make it possible to conduct more elaborate, more economical, and more precise continuous productive operations because the outcome of the process controls the process itself, starting, altering, or stopping it so as to make it produce a desired result. This should dispose of the cliche that automation is nothing new – just more mechanization. It has its roots in mechanization, to be sure, but something new was added when electronic devices made possible the widespread application of the feedback principle ...</p>
<p class="quote">The issue which automation now raises is this: Will it alter present economic relations in such ways as to disturb these favorable conditions, or will our business system be able to translate these technological improvements fully and properly into still greater general prosperity and higher standards of living? It is evident it will change wage income both by numbers of jobs, some places up and some places down, and by wage rates upgraded here and downgraded there. It will obsolete some capital equipment and make important demands for new capital equipment. It will affect unit costs for some products, but not all; prices in some markets, not in others; profits and dividends, tax yields, and public spending ...</p>
<p class="quote">In contrast to the preponderant attitude of business executives, labor union officials have been outspokenly concerned about the economic impact of automation on the well-being of the mass of worker-consumers in the years immediately ahead ... “But we believe that much study is needed by all parties if the gains are to be made as large and as steady as possible and the temporary dislocations and local burdens or losses made as small as possible and most equitably shared.” With this view I find myself in accord rather than with the idea that the problem will take care of itself or be disposed of automatically by the invisible hand of free enterprise ...</p>
<p class="quote">When businessmen or others say that technological progress is good <em>per se</em> and that it takes care of its own economic process, they invoke a simple logic of the free enterprise economy. The entrepreneur seeks profit by adopting a device for raising efficiency. This lowers cost. Price falls proportionately and thus broadens the market. This restores the number of jobs or even increases them and raises the level of living or real incomes. This comfortable formula presupposes a state of complete and perfect competition in a quite simple economic environment with great mobility of labor, both geographical and occupational. <em>But these are not the conditions of today’s industrial society, with large corporations and administered prices; with large unions and complicated term contracts covering wages, working conditions, and “security”; with complex tax structures, credit systems, and extensive government employment and procurement.</em> The smooth and beneficent assimilation of sharp and rapid technological change has to be effectuated through intelligent and even generous policies painstakingly arrived at by administrative agencies, private and public ... (Italics mine – <em>T.N.V.</em>)</p>
<p class="quote">Against the complacent picture presented by some witnesses at these hearings let us put the actual sequence of economic developments in postwar United States. Technology (with infant but growing automation) has been put to full use under conditions of extraordinarily high and sustained demand, public and private. Labor, viewing this unparalleled rise in productivity, has sought to capture the largest possible share in the form of successive rounds of widespread wage increases in basic rates, escalation formulas, and fringe benefits. As the unit cost of labor went up, management sought to maintain or improve its earning position by raising prices and/or by introducing labor-saving machines and administration. The first solution of management’s problem – that is, price raising – has been facilitated by our elastic monetary system, and we are now drifting along on a Sybaritic course of mild inflation as a way of life. The second solution of management’s problem of meeting labor’s wage demands has accelerated piecemeal mechanization, yesterday’s infant “scientific management,” today’s adolescent automation. [And still there are some who say the class struggle has disappeared!] ...</p>
<p class="quote">I strongly suspect that we have already built up at many points a productive capacity in excess of the absorptive capacity of the forthcoming market under city and country income patterns that have been provided, and employment patterns that will result from this automated operation. We are told on impressive authority that we have not been making adequate capital provision for re-equipping industry in step with the progress of technology. This is probably true if it means making full application of electronic devices and univac controls generally throughout our industrial plant. But we have not yet demonstrated our ability to adjust the actual market of 1956-1957, <em>etc.,</em> to the productivity of the production lines we have already “modernized.” <em>They have not yet come to full production, but as they do we see incipient unemployment appearing.</em> Since that, along with slight credit tightening, will tend in some degree to restrict the market appetite, <em>it seems likely that next year will see a still further enlarged output somewhat out of balance with this reduced demand.</em> Suggestions have been made that balance could be restored by lowering prices or by cutting the work week. Both processes take time and present their own difficulties. Meanwhile, the current trend is toward higher prices reflecting wage advances already negotiated ... (My Italics – <em>T.N.V.</em>)</p>
<p class="quote">In the course of these hearings various members of the committee and its staff have raised the question whether legislation should be recommended to deal with the problems created by so-called automation. The answer, I think, is an unqualified NO. To curb or redirect the process of scientific discovery and engineering application and the adaptations of businessmen and consumers to these changes would be utterly repugnant to the system of free enterprise and individual choice that have made our country great. None the less, every time the Congress passes a money bill, every time it revises our tax structure, every time it passes a regulatory measure for price maintenance (alias “fair trade”), farm price supports (alias “parity”), or stockpiling of copper, rubber, wool, or silver it is giving punch-card or tape instructions to some part of the continuous flow mechanism of our economy. Public policy on all these matters should be framed in the light of the fullest possible understanding of the integrated character of the price-income structure and behavior of our economy, with an eye single to promoting “maximum production, employment, and purchasing power” for the whole people, not to serve the immediate interest of any special group ...</p>
<p class="quote">But in a free enterprise system human judgment is given play at most of the important points of interrelationship. Unless the responsible executives seek to integrate their operations to the prosperity of the whole economy and use the full apparatus available for gathering and processing the data relevant to policy determination our economic process will disintegrate into wasteful struggles for individual or group short-run advantage. Much of the potential benefit of technological progress (of which automation is one particular expression) may be lost through failure to make our economic structure and practices equally scientific.</p>
<p class="fst">It is not necessary to belabor the point. There are sharp differences of opinion within the bourgeoisie itself on the outlook for 1956. The fact that some of the more eminent representatives of the bourgeoisie are not too confident about the outlook for 1956 or about the perpetual prosperity that the disciples of the new era proclaim, ought to give these disciples some pause. That it will, however, is highly dubious. They will have to encounter hard reality before their views are shaken.</p>
<p>Perhaps the proper way to put it is that there is a form of <em>malaise</em> penetrating almost every sector of society. For example, <strong>The New York Times</strong>’ column, <em>The Merchant’s Point of View</em>, in its December 11, 1955, issue, states:</p>
<p class="quoteb"><em>“Industrial production, now leveling off after surpassing all previous peaks, will be unable to take care of a growing labor force. This will mean a rise in unemployment which can exercise a dampening effect upon buying enthusiasm.”</em> (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">If the business cycle has been eliminated, or if severe depressions are a thing of the past, relegated to the history books, one may logically ask, why does this feeling of <em>malaise</em> persist?</p>
<p>The previously cited monthly letter of the First National City Bank of January 1956 observes:</p>
<p class="quoteb">The economy does not yet show convincing signs that excesses have reached dangerous proportions, nor are they in any sense inevitable, but they <em>could develop</em> if we substitute enthusiasm for caution and emphasize prosperity to the extent that we forget its problems. <em>The biggest problem of all is to slow down to a sustainable rate of growth without going through a cycle of boom and bust.” </em>(Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Is this merely a psychological hangover from the past history of capitalism or is there a realistic danger that depressions are still possible?</p>
<p>It seems to us that the general feeling of cautiousness or <em>malaise</em> that has more recently penetrated the more knowledgeable circles of the bourgeoisie and its spokesmen, is not without practical foundation. The recent boom has rested in large part on the automobile and construction industries. If these industries are indeed headed for declines of 10 to 15 per cent, then there will be rapid repercussions throughout the economy.</p>
<p>As for the outlook for the automobile industry, previously we cited the opinion of Henry Ford II. We now have the opinion of Harlow H. Curtice, president of the General Motors Corporation, that there will be a 12 per cent drop from the 1955 production total of 7,940,862 cars. This would be almost one million cars less to be produced in 1956 than in 1955.</p>
<p>George Romney, president of American Motors Corporation, put the decline at 15 per cent. Only L.L. Colbert, president of the Chrysler Corporation is bullish among the automobile magnates.</p>
<p>As <strong>The New York Times</strong> of December 11, 1955, put it:</p>
<p class="quoteb">“Nobody in the industry talks about market saturation. But nobody denies that sales are becoming increasingly difficult to make.”</p>
<p class="fst">As a matter of record, and as reported in <strong>The New York Times</strong> of December 25, 1955, the new car inventories have increased to the very substantial stockpile of 710,000, which is a record for this time of the year when new models have just been introduced. Even more significant is the fact that this large figure includes 325,000 new 1955 models which are likewise awaiting disposal.</p>
<p>An <strong>Automotive News</strong> tabulation, according to <strong>The New York Times</strong> article mentioned in the preceding paragraph, shows that before the full production of 1956 models got under way the dealers had 569,335 new cars on hand. For December 1954 the total stood at 265,153 units. In other words, there has been a substantial increase in the stocks of available cars, or to put the matter in simpler terms, production is outstripping sales. Automobile dealers are being squeezed and are beginning to go out of business.</p>
<p>It would appear to be the overwhelming consensus that American capitalism cannot in 1956 duplicate the almost 8,000,000 passenger car production of 1955. There will be a decline of 10 to 15 per cent. A decline of this magnitude is a matter not only of several billion dollars of automobiles, but of steel, parts and all the various supporting and allied industries, and has an accumulative effect for the simple reason that the automobile industry stands at the apex of the economy.</p>
<p>If it were possible for capitalism constantly to increase the output of automobiles and allied products and to dispose of them, then there might well be hope for the “permanent peace and prosperity” school. The facts, however, are otherwise. The natural laws of capitalism assert themselves in relatively quick order and we find that relative over-production is today a current problem plaguing the automobile industry. Tomorrow, the problem will be unemployment in the automobile industry and its allied industries.</p>
<p>As I told the editor when this article was requested, if he were willing to wait a few months history would provide all the answers needed to the nonsense that American capitalism has achieved permanent peace and prosperity. So far as the automobile industry is concerned, <strong>The New York Times</strong> of January 14, 1956, reveals that the manufacturers of automobiles are themselves not independent of economic facts, nor are they disposed to rely entirely on the verbiage of their public relations departments. The inevitable has happened, and sooner than expected. The headline, <em>Big 3 Car Makers Cut Work Forces</em>, makes it very clear that the predictions of a decline in automobile production in 1956 are about to be realized.</p>
<p>The subject has far greater importance than the 8500 workers who have so far been laid off at 15 or so automobile plants. To quote <strong>The New York Times</strong>:</p>
<p class="quoteb">A series of lay-offs was announced yesterday by the Big Three auto companies.</p>
<p class="quote">As one of them put it, the lay-offs were ordered to “maintain a balance between passenger car production and market demand.”</p>
<p class="quote"><em>It has been no secret in the industry that sales of the 1956 models have been disappointing and new cars are piling up on dealers’ lots.</em> Auto executives have frankly predicted some decline this year from the record sales and output of 1955, although they do not agree on how much of a decline it will be.</p>
<p class="quote">In recent weeks, the industry has abandoned Saturday and other overtime work, which had prevailed almost without a break for more than a year. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The automobile industry graphically illustrates the dynamic character of present-day capitalism, with its enormous accumulation of capital and consequent increase in productivity of labor.<br>
</p>
<p class="fst">Just what has been the rise in the productivity of labor is a subject which baffles the specialists. The Bureau of Labor Statistics has worked out many different methods of estimating productivity, and they generally show an increase of 3 to 3.6 per cent annually, depending upon the method used. In some industries, however, depending upon the method used, there can be an annual increase of labor productivity of as much as 10 per cent or more, the automobile industry being one of the noteworthy industries in this respect. If, however, we take a very conservative figure of a little better than 3 per cent as the annual increase in labor productivity, and if we recall that we now have an economy where there are well over 60 million employed, it is clear that normal increase in labor productivity, which accompanies normal accumulation of capital, renders superfluous approximately 2,000,000 workers each year. That is, this number would be rendered superfluous unless the economy could increase its output sufficiently to absorb this amount.</p>
<p>In addition to these 2,000,000 relatively displaced workers, for whom jobs must be found each year, there are, due to the increase in population, approximately 700,000 new entrants into the labor force each year. Here, then, is a measure of the problem that confronts American capitalism. Production must be increased sufficiently to absorb in the neighborhood of 2,700,000 workers annually in order merely to stand still so far as unemployment is concerned. Should there be instead of a five per cent increase in production, or a nine per cent increase which has been recorded in 1955, a decline of 10 per cent or even of five per cent, the results will be noticeable in very short order and will astound the advocates of the “permanent peace and prosperity” school.</p>
<p>The tip-off, in its own way, that 1956 will indeed be a considerably different year than 1955 is seen in the Christmas announcement by General Electric that its appliance prices are being slashed up to 30 per cent. This constitutes a reduction, according to an article in <strong>The New York Times</strong>, December 25, 1955, of approximately $23 million at retail for G.E. products. For example, a G.E. vacuum cleaner that has been selling for $69.95 will now be listed at $49.95. A G.E. toaster that had been sold for $19.95 will now be available at $17.95. The automatic steam iron has been reduced from $17.95 to $14.95. And so it goes.</p>
<p>Already G.E.’s competition has been forced to toe the line and other appliance manufacturers have announced similar or identical, or, at the very least, comparable reductions.</p>
<p>In part, undoubtedly G.E.’s move was designed to get a jump on Westinghouse, its major competitor whose production is considerably retarded by the present strike; in part no doubt, G.E.’s action is motivated by its desire to meet competition from the discount houses. But in part, and this is the most important part so far as we are concerned, the action of G.E. is predicated upon the fact that it has become increasingly difficult for G.E. dealers to dispose of G.E.’s enormous production. The squeeze is on, and as a matter of fact, the aspect of G.E.’s price reduction which received most comment in the business press is not the actual reduction in prices themselves, but the fact that G.E. took the revolutionary step of reducing the margins of profit available to the wholesaler and retailer. This is absolutely unprecedented in recent years and its consequences will indeed be far-reaching.</p>
<p>The automobile situation and the appliance situation typify the growing crisis in consumer durables – one of the twin peril points confronting American capitalism as it enters 1956.<br>
</p>
<p class="fst">THE OTHER PERIL POINT IS the agricultural crisis. Here, of course, there is no dispute about the fact that there is a crisis and that its political repercussions must be profound. Many competent observers, for example, interpret the large-scale Democratic victories in the by-elections of 1955 as due to the fact that the farm population, as a whole, has not participated in the boom; that the agricultural crisis has started much earlier and has deepened progressively as time goes on. This, of course, is in accordance with a typical capitalist pattern. It does not, however, alleviate the situation so far as the farmer or the political impact of the farmers’ crisis are concerned.</p>
<p>For a measure of the agricultural crisis we can turn to the November 1955 issue of the <strong>Survey of Current Business</strong>, the publication of the U.S. Department of Commerce. This staid official government publication is certainly not going to exaggerate the proportions of the agricultural crisis. Yet, in an article by L. Jay Atkinson entitled <em>Agricultural Production and Income</em>, it is stated:</p>
<p>The pressure of increased supplies has been such that a further decline has occurred in agricultural prices and in farm income. In the first three-quarters of 1955, cash receipts from farm marketings and CCC loans were about 4 per cent below a year earlier. Prices were about as much lower with the volume of marketings running about even with 1954. Production expenses have continued little changed and net farm income was down about one-tenth in the first 9 months of 1955 as compared with a year earlier.</p>
<p>Further on Mr. Atkinson states:</p>
<p class="quoteb">The decline in farm income and the small change in the asset position of farmers in recent years compares with a very substantial general advance in income and net assets in the non-farm economy. Although a gradual decline in the share of income from agricultural sources has occurred for a considerable period in the United States, a sharper drop in the past several years reflects a combination of curtailed exports of farm products and a considerable increase in output. <em>The related influence of rising agricultural output throughout the world has effected a substantial reduction in world agricultural raw material prices and has limited any rise in United States farm exports during a period of stepped- up efforts at surplus disposal.</em></p>
<p class="quote">These influences have lowered farm income from the high level attained after the end of World War II despite a rise in consumer demand for farm products. They have been accompanied by a considerable shift in workers from farm to non-farm areas. <em>After allowing for the reduction in the number of persons on farms, income from farming per person living on farms is down about one-fourth from the postwar high, and per capita income of the farm population from both farm and non-farm sources is off about one-eighth.</em> Meanwhile non-farm personal income per capita has continued to advance. Farm income per capita now bears about the same ratio to non-farm income per capita as in 1929. (My italics – <em>T.N.V.</em>)</p>
<p class="fst">Of course, the record production has occurred in the face of all types of incentives to reduce production and more of the same is the only program that the Eisenhower Administration has to offer. It is clear that the relative position of the various farming classes has worsened materially in the post-war years and the end is not in sight.</p>
<p>The course of farm production in recent years is shown by the following table:</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td colspan="7">
<p class="smc"><strong>FARM PRODUCTION</strong> (1947–49 = 100)</p>
</td>
</tr>
<tr valign="bottom">
<td>
<p class="sm1"> </p>
</td>
<td>
<p class="smc"><em>1950</em></p>
</td>
<td>
<p class="smc"><em>1951</em></p>
</td>
<td>
<p class="smc"><em>1952</em></p>
</td>
<td>
<p class="smc"><em>1953</em></p>
</td>
<td>
<p class="smc"><em>1954</em></p>
</td>
<td>
<p class="smc"><em>1955</em><sup>1</sup></p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em>Farm output</em></p>
</td>
<td>
<p class="smc">100</p>
</td>
<td>
<p class="smc">103</p>
</td>
<td>
<p class="smc">107</p>
</td>
<td>
<p class="smc">108</p>
</td>
<td>
<p class="smc">108</p>
</td>
<td>
<p class="smc">112</p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em>Livestock and products</em></p>
</td>
<td colspan="6">
<p> </p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em>All livestock and products</em></p>
</td>
<td>
<p class="smc">106</p>
</td>
<td>
<p class="smc">111</p>
</td>
<td>
<p class="smc">112</p>
</td>
<td>
<p class="smc">114</p>
</td>
<td>
<p class="smc">119</p>
</td>
<td>
<p class="smc">121</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Meat animals</p>
</td>
<td>
<p class="smc">107</p>
</td>
<td>
<p class="smc">114</p>
</td>
<td>
<p class="smc">115</p>
</td>
<td>
<p class="smc">114</p>
</td>
<td>
<p class="smc">119</p>
</td>
<td>
<p class="smc">123</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Dairy products</p>
</td>
<td>
<p class="smc">101</p>
</td>
<td>
<p class="smc">100</p>
</td>
<td>
<p class="smc">101</p>
</td>
<td>
<p class="smc">106</p>
</td>
<td>
<p class="smc">108</p>
</td>
<td>
<p class="smc">109</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Poultry and eggs</p>
</td>
<td>
<p class="smc">111</p>
</td>
<td>
<p class="smc">119</p>
</td>
<td>
<p class="smc">123</p>
</td>
<td>
<p class="smc">127</p>
</td>
<td>
<p class="smc">134</p>
</td>
<td>
<p class="smc">134</p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em>Crops</em></p>
</td>
<td colspan="6">
<p class="smc"> </p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em>All crops</em></p>
</td>
<td>
<p class="smc"> 97</p>
</td>
<td>
<p class="smc"> 99</p>
</td>
<td>
<p class="smc">103</p>
</td>
<td>
<p class="smc">103</p>
</td>
<td>
<p class="smc">100</p>
</td>
<td>
<p class="smc">106</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Feed grains</p>
</td>
<td>
<p class="smc">104</p>
</td>
<td>
<p class="smc"> 97</p>
</td>
<td>
<p class="smc">102</p>
</td>
<td>
<p class="smc">101</p>
</td>
<td>
<p class="smc">104</p>
</td>
<td>
<p class="smc">112</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Hay and forage</p>
</td>
<td>
<p class="smc">105</p>
</td>
<td>
<p class="smc">110</p>
</td>
<td>
<p class="smc">105</p>
</td>
<td>
<p class="smc">108</p>
</td>
<td>
<p class="smc">108</p>
</td>
<td>
<p class="smc">115</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Food grains</p>
</td>
<td>
<p class="smc"> 83</p>
</td>
<td>
<p class="smc"> 81</p>
</td>
<td>
<p class="smc">105</p>
</td>
<td>
<p class="smc"> 96</p>
</td>
<td>
<p class="smc"> 83</p>
</td>
<td>
<p class="smc"> 78</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Vegetables</p>
</td>
<td>
<p class="smc">101</p>
</td>
<td>
<p class="smc"> 95</p>
</td>
<td>
<p class="smc"> 96</p>
</td>
<td>
<p class="smc">100</p>
</td>
<td>
<p class="smc"> 97</p>
</td>
<td>
<p class="smc">100</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Fruits and nuts</p>
</td>
<td>
<p class="smc">102</p>
</td>
<td>
<p class="smc">105</p>
</td>
<td>
<p class="smc">102</p>
</td>
<td>
<p class="smc">104</p>
</td>
<td>
<p class="smc">106</p>
</td>
<td>
<p class="smc">108</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Sugar crops</p>
</td>
<td>
<p class="smc">117</p>
</td>
<td>
<p class="smc"> 93</p>
</td>
<td>
<p class="smc"> 95</p>
</td>
<td>
<p class="smc">106</p>
</td>
<td>
<p class="smc">116</p>
</td>
<td>
<p class="smc">108</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Cotton</p>
</td>
<td>
<p class="smc"> 70</p>
</td>
<td>
<p class="smc">106</p>
</td>
<td>
<p class="smc">106</p>
</td>
<td>
<p class="smc">115</p>
</td>
<td>
<p class="smc">95</p>
</td>
<td>
<p class="smc">104</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Tobacco</p>
</td>
<td>
<p class="smc">101</p>
</td>
<td>
<p class="smc">115</p>
</td>
<td>
<p class="smc">112</p>
</td>
<td>
<p class="smc">102</p>
</td>
<td>
<p class="smc">109</p>
</td>
<td>
<p class="smc">113</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Oil crops</p>
</td>
<td>
<p class="smc">116</p>
</td>
<td>
<p class="smc">106</p>
</td>
<td>
<p class="smc">104</p>
</td>
<td>
<p class="smc">102</p>
</td>
<td>
<p class="smc">118</p>
</td>
<td>
<p class="smc">132</p>
</td>
</tr>
<tr>
<td colspan="7">
<p class="sm1"><small>1. Based on information available November 14.<br>
<strong>Source:</strong> U.S. Department of Agriculture, Agricultural Research Service.</small></p>
</td>
</tr>
</tbody></table>
<p class="fst">It will be seen that total farm output has increased 12 per cent during the past six years, which include the Korean war and the post-Korean war periods. The major increase has taken place in livestock and related products. Since the proposed incentives to reduce acreage will not in any way inhibit increases in livestock and related production, there can only be a further accentuation of this disproportion.</p>
<p>The proof of the pudding, so far as the farmers as a whole are concerned, is reflected in the parity ratio – this dubious measure of the ratio of prices received to prices paid, going back to a base of 1910–1914.</p>
<p>Whatever we may think of parity as a concept, the fact of the matter is that the trend in the parity ratio does reveal in one simple index what has been happening to the farming classes as a whole and is a relatively accurate measure of the extent of the agricultural crisis.</p>
<p>The current agricultural crisis is hardly a new development. It had its roots in the last years of the Truman administration, as world agricultural production was restored to pre-war levels, thereby beginning the decline in the export of large quantities of surplus American farm products. Throughout the Eisenhower administration the problem of the farmers – which in turn is a direct product of their relatively worsening economic situation – has been one that is uppermost in the minds of the politicians and frequently makes the headlines of the daily press.</p>
<p>The trend was quite clear almost three years ago when we wrote <a href="../../1953/04/pwe-eisenhower.html" target="new"><em>The Permanent War Economy Under Eisenhower</em></a> in the March–April 1953 issue of <strong>The New International</strong>. On the subject of the parity ratio we had this to say at that time:</p>
<p class="quoteb">The parity ratio, comparing prices received and paid by farmers, shows a perceptible decline during 1952. The figure was 105 in January 1952, but declined almost 10 per cent to 95 in January 1953. Since the parity ratio is based on average prices received and paid by farmers in the period 1910–1914, which was a rather good period for American farmers, a parity ratio below 100 does not indicate that farmers are starving. But a decline of 10 per cent in a year is precipitous, and when the parity ratio goes below 100 (which it did beginning November) political storms start brewing in the Congressional farm bloc.</p>
<p class="fst">The latest figure available for November 1955 shows that the parity ratio has declined to 81. In November 1954 the parity ratio was 87. For three years the parity ratio has declined from 100 to 81 – a decline of 19 per cent, or better than an average of six per cent annually.</p>
<p>This steady persistent decline in the parity ratio merely reflects the deepening agricultural crisis. It takes place because agriculture is the classic case where capitalist production quickly outruns available markets. It is taking plate, moreover, at a time when American imperialism is seeking to prevent the crisis in consumer goods from deepening and paralleling that in agriculture.</p>
<p>Hence, there is a frantic search for export markets for the products of American industry. American capital investment abroad has doubled in the postwar period, private investments abroad reaching about 326.5 billion at the end of 1954.</p>
<p>Of course, to the extent that American capitalism succeeds in alleviating the developing crisis in consumer durable goods by increasing the export markets for these products, to that extent will it aggravate the agricultural crisis. For in most cases the only manner in which these countries of the Western Hemisphere and western Europe can pay for the industrial products of America is through raw materials and agricultural products.</p>
<p>The tremendous increase in the output of farm products is a result of the application on a constantly expanding scale of large-scale capitalist methods of production to farming. All kinds of new agricultural implements and labor-saving devices have been developed and produced, so that with a constantly falling farm population it has been possible steadily to increase the output of agricultural products.</p>
<p>The process of government intervention has not ceased under the Eisenhower Administration. According to <strong>The New York Times</strong> of January 11, 1956:</p>
<p class="quoteb">“The Agricultural Department reported today that the Government’s investment in price- supported farm products amounted to $8,206,826,000 on Nov. 30.</p>
<p class="quote">“This was an increase of $1,316,809,000 from Nov. 30, 1954, when the investment stood at $6,890,017,000.”</p>
<p class="fst">In other words, during the past year there has been an increase of almost 20 per cent in the government’s investment in price-supported farm products – at a time when the parity ratio has declined another six points.</p>
<p>It is only natural, therefore, that the farm problem is of sufficient magnitude to occasion a special presidential message – particularly since 1956 is a presidential election year. This message was delivered by Eisenhower on January 9. Its major feature is the establishment of what is euphemistically called a “soil bank.” This means that farmers will be paid in cash or surplus commodities for withdrawing surplus producing land and putting it into soil-saving crops. Producers of cotton, wheat, corn and rice will be paid in cash or in kind from government stocks for reducing acres already allotted to them under federal controls. Cash will also be paid to farmers who devote their acreage to the so-called soil-building crops.</p>
<p>How this tepid proposal is to solve the agricultural crisis – assuming that it will be approved by the Congress, which is a large assumption indeed – is not at all clear, not even to the proponents of the proposal. It is both ironic and significant that the only person of any note to praise the program enthusiastically was Henry Wallace, former Secretary of Agriculture under Roosevelt, under whose auspices the AAA developed the classic capitalist theory of paying farmers to plow under every third row of cotton and wheat during the depths of the depression.</p>
<p>In the agricultural crisis there has existed for decades one of the truly fundamental contradictions of American capitalism – for which there is and can be no solution under capitalism. It is theoretically possible for the American bourgeoisie to discuss a solution comparable to that which the British bourgeoisie instituted over a century ago with the repeal of the Corn Laws, whereby British farming was abandoned to its fate and British capitalists permitted their customers in other lands who were buying their industrial exports to pay for them through agricultural imports into Britain. While a comparable program might be considered to be the goal of certain sections of the American bourgeoisie, it is clearly too risky in this day and age when a world war can easily become a fact of political life. In fact, it is easy for the opponents of any such plan to argue that the abandonment of the American farmer to the tender mercies of unbridled competition would merely encourage Stalinist imperialism to unleash World War III.</p>
<p>Thus the only thing that happens to the agricultural crisis is that it gets worse, and as it gets worse it has profound political repercussions and ultimately profound consequences on the entire economy. It is the agricultural crisis that provides the general background and setting for the developing crisis in consumer durables, both of which make it clear that to talk of permanent prosperity under capitalism is just so much poppycock.<br>
</p>
<p class="fst">DOES THIS MEAN THAT A LARGE-SCALE depression in 1956 is a realistic possibility? Obviously not. There have been certain fundamental changes in the nature and functioning of capitalism, two of which must be singled out for comment at this time. One of them has to do with the so-called built-in stabilizers, unemployment insurance, <em>etc.</em>, constantly referred to by the advocates of the “permanent peace and prosperity” school. These are real and they do help to introduce an <em>element</em> of a sort of planning, which certainly prevents any rapid downward tobogganing of the various economic indexes. As unemployment develops, for example, it does not have precisely the same cumulative depressing effect on the markets for food, clothing and other basic economic necessities as formerly. The ability to manipulate tax rates likewise is a stabilizing element which should not be minimized. Since the recent boom has to a large extent been supported by the phenomenal accumulation of capital in the form of vast expansion in plant and equipment, it is not too much to say that the new tax law, with its new provisions for rapid depreciation, has played a great role in encouraging accumulation of capital.</p>
<p>Business borrowing has increased substantially, causing the government to raise the Federal Reserve discount rate to 214 per cent, a 20-year high. Interest rates in general have been rising. Bank loans increased about $3 billion during 1955, an increase of 16 per cent above the 1954 figure.</p>
<p>One of the interesting aspects of the boom in accumulation of capital is that it has largely been financed out of profits and surplus values accumulated in past periods. As <strong>The New York Times</strong> of January 8, 1956, puts it:</p>
<p class="quoteb">A detailed breakdown of long-term corporate financing in 1955 shows another striking phenomenon. Despite the sharp rise in business activity, external financing – raising funds from outside sources – did not increase. It ran at about $6,000,000,000, the same or a slightly higher rate than in 1954.</p>
<p class="quote">It should not be forgotten, in passing, that the need for financing in 1955 was great indeed. Companies spent more than $24,000,000,000 on plant and equipment, some $2,000,000,000 more than in 1954.</p>
<p class="quote">So where did business get the needed funds? The bulk by far, came from its own inner resources – earnings and depreciation allowances.</p>
<p class="quote">Retained earnings in the first half of last year amounted to $4,700,000,000. On that basis, for the year as a whole they totaled well over $9,000,000,000. When the final figures are toted up, that will probably set a new high record.</p>
<p class="quote"><em>And take depreciation allowances, a steadily increasing factor in meeting capital requirements.</em> Last year they topped $14,500,000000, a jump of more than $1,500,000,000 above the 1954 level.</p>
<p class="quote"><em>Depreciation has bulked ever larger in corporate financial plans for several reasons. For one thing, the pressure of competition has forced constant additions to plant and equipment.</em> Gross depreciable capital assets of non-financial corporations have soared to an astronomical $302,000,000,000. <em>The high volume of new expenditures in recent years has meant that, after allowance for write-offs on worn-out and obsolete facilities, gross assets have risen at an annual rate of $20,000,000,000.</em></p>
<p class="quote">Under a “straight-line” depreciation, this increase in assets would boost depreciation allowances by more than $750,000,000 a year. <em>The actual increase, however, has been substantially greater. </em>From 1950 through 1954 and into 1955, for instance, the government’s fast amortization program allowed thousands of defense-supporting companies to write off their depreciation in five years. <em>Facilities valued at more than $30,000,000,000 were granted this rapid write-off privilege.</em></p>
<p class="quote">The tax law of 1954 allowed all businesses to liberalize the basis on which they might depreciate capital assets acquired after January of that year. Previously, the straight-line method had required allowances to be spread evenly over the normal life of the asset; that might be twenty years or so. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">There can be little doubt that the tax swindle law of 1954, the major accomplishment of the Eisenhower Administration, has contributed in no small way to the recent boom. The acceleration of the consumption of capital, however, does not in the long run eliminate the business cycle. If anything, it tends to aggravate the business cycle, for one must never forget that the basic law of motion of capitalist economy is Marx’s general law of capitalist accumulation: the greater the increase in capital accumulation, the greater the increase in the industrial reserve army.</p>
<p>We have analyzed for some years now, how the Permanent War Economy has tended to offset and to transform Marx’s general law of capitalist accumulation into one which reflects itself primarily in a relative decline in the standard of living of the working class. This, however, does not mean that the capitalist economy is either crisis-free or unemployment-free.</p>
<p>What these trends do, of course, is merely to reinforce a fundamental capitalist trend toward increasing monopoly. As Marx has pointed out, capitalism constantly strives in the direction of reaching the ultimate goal of one monopoly capitalist, but never, of course, quite reaches that exalted state of affairs.</p>
<p>In this connection it is interesting to note that now that the Democrats are in control of the committees of the Congress, the trend toward monopoly is receiving more publicity than previously. In a report published in <strong>The New York Times</strong> of December 27, 1955, we find that the sub-committee of the House Judiciary Committee investigating the question of monopoly – a committee headed by Representative Celler – agreed unanimously that “mergers were reaching a record for 25 years.” The Democrats, of course, blame the Republicans for this development, and the Republicans refuse to accept this responsibility.</p>
<p>According to this report, since January 1951 more than 3,000 companies in manufacturing, mining, trade and services have “disappeared in the swelling merger tide.”</p>
<p>It is true, of course, that the current wave of mergers is on an exceedingly large scale, and that it already has had the effect of confining the fantastic profits of the past few years to the largest corporations.</p>
<p>We must remember, however, in any analysis of the economy that these developments are taking place under a new stage of capitalism, one which we have described as the Permanent War Economy.<br>
</p>
<p class="fst">THE MAGNITUDE OF THIS THIRD SECTOR of the economy, <em>i.e.</em>, outlays for the means of destruction as contrasted with outlays for the means of production or outlays for the means of consumption, is dramatically illustrated by a recent report of the Department of Defense, entitled <em>Real and Personal Property as of December 31, 1954</em>. We find that as of this date “the aggregate value of properties and inventories included in this report amounts to $123.9 billion for the Department of Defense.” This grand total is comprised of $34,082,000,000 for the Department of the Army; $56,428,000,000 for the Department of the Navy (including the Marine Corps); and $33,356,000,000 for the Department of the Air Force.</p>
<p>Major equipment in use for the entire armed forces totals $48,539,000,000, over 60 per cent of which belongs to the Navy. Equipment and supplies in the supply system account for a slightly larger figure, exceeding $50 billion, and more than $21 billion is in real property inventories, with almost $3 billion in machine tool inventories.</p>
<p>As <strong>The New York Times</strong> comments editorially on this report in its issue of October 31, 1955:</p>
<p class="quoteb">“An inventory of our national defense system brings up the astonishing figure of $124 billion as the current level of our military assets. This, of course, is still not the total figure. It does not include the atomic energy establishments, nor by any means all of the military materials now in use.”</p>
<p class="fst">It is, however, a staggering figure and the question logically arises, suppose that the Permanent War Economy did not exist and that instead of $124 billion of real and personal property belonging to the Department of Defense, the figure were only 10 per cent of this amount, what then? So far as the business cycle is concerned, the postwar prosperity would have ended quite some time ago.</p>
<p>It is worth trying to get some perspective on the extent of the military establishment and the nature of the investment that comprises the third sector of the economy, outlays for the means of destruction.</p>
<p>We find, for example, the extent of the acreage controlled is vast. To quote the report:</p>
<p class="quoteb">“The Department of Defense through the three military departments controlled a total of 29.4 million acres of land throughout the world on 1 January, 1955. This included land owned, leased, used on temporary permit, and various occupancy rights.”</p>
<p class="fst">In the United States alone, the acreage controlled totaled 24,172,739 acres, costing the government over $17.5 billion and representing about 37,800 square miles, equivalent to 1.3 per cent of total land area in continental United States.</p>
<p>The almost $3 billion inventory of machine tools, which admittedly is far from a complete tally, represents 2,494,363 metal cutting tools and 388,768 metal forming tools. If the military establishments had ordered only, say, 10 per cent of this quantity, what would be the situation in the machine tool industries today? Much the same question can be asked with reference to the more than $50 billion in inventories in the supply system throughout the entire armed forces.</p>
<p>The size and extent of the military establishment of American capitalist imperialism is so vast that it is difficult to appreciate its precise economic and political weight. The virtual interlocking directorate that has been established between the leaders of big business and the leaders of the military establishment is, however, a fact. It could not exist without the development of the Permanent War Economy and its mere existence and continuation have caused a qualitative change in the nature and functioning of the business cycle.</p>
<p>Of course, the direct investment in the establishments of the Department of Defense is not the sole measure of the importance of war outlays in the total economy. To this must be added the expenditures that are made for foreign aid, both military assistance and economic and technical assistance.</p>
<p>In a very interesting article in <strong>The New York Times</strong> of December 1, 1955, James Reston analyzes the dispute that has taken place between the advocates of a flexible and limited program and the advocates of a permanent commitment to this type of program.</p>
<p>As Reston puts it, the “Young Turks” (represented by such stalwart Eisenhower Republicans as Stassen, Nelson Rockefeller and Nixon):</p>
<p class="quoteb">“... are enthusiastic about the foreign aid program, want it to be larger, think it is a good thing in itself, good for the United States, and <em>good for the development of a healthy world economy, which helps the United States.</em>” (My italics – <em>T.N.V.</em>)</p>
<p class="fst">In the course of this article Reston supplies some convenient summary figures on the expenditures for foreign aid, as follows:</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td colspan="6">
<p class="smc"><strong>Expenditures for Foreign Aid</strong><br>
(in millions of dollars)</p>
</td>
</tr>
<tr valign="bottom">
<td>
<p class="sm1"><em>Fiscal<br>
Year</em></p>
</td>
<td>
<p class="smc"><em>Economic and<br>
Military<br>
Assistance</em></p>
</td>
<td rowspan="9">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Technical<br>
Assistance</em></p>
</td>
<td rowspan="9">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em><strong>Total</strong></em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1950</p>
</td>
<td>
<p class="smr">$51.5</p>
</td>
<td>
<p class="smr">$3,437.2</p>
</td>
<td>
<p class="smr">$3,488.7</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1951</p>
</td>
<td>
<p class="smr">933.6</p>
</td>
<td>
<p class="smr">2,802.2</p>
</td>
<td>
<p class="smr">3,735.8</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952</p>
</td>
<td>
<p class="smr">2,384.4</p>
</td>
<td>
<p class="smr">2,147.8</p>
</td>
<td>
<p class="smr">4,532.2</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953</p>
</td>
<td>
<p class="smr">3,956.1</p>
</td>
<td>
<p class="smr">1,766.6</p>
</td>
<td>
<p class="smr">5,722.7</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1954</p>
</td>
<td>
<p class="smr">3,627.1</p>
</td>
<td>
<p class="smr">1,246.9</p>
</td>
<td>
<p class="smr">4,874.0</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1955</p>
</td>
<td>
<p class="smr">2,292.6</p>
</td>
<td>
<p class="smr">1,973.1</p>
</td>
<td>
<p class="smr">4,265.7</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1956 (projected)</p>
</td>
<td>
<p class="smr">2,585.8</p>
</td>
<td>
<p class="smr">1,801.4</p>
</td>
<td>
<p class="smr">4,387.2</p>
</td>
</tr>
<tr>
<td>
<p class="smc"><i>Total</i></p>
</td>
<td>
<p class="smr">$15,831.1</p>
</td>
<td>
<p class="smr">$15,175.2</p>
</td>
<td>
<p class="smr">$31,006.3</p>
</td>
</tr>
</tbody></table>
<p class="fst">It will be seen that over $31 billion will have been spent for this purpose in a seven-year period. Again, we are dealing with a type of economic outlay which was unknown before the advent of the Permanent War Economy and one which is quantitatively not insignificant – either in its economic or political impact.<br>
</p>
<p class="fst">THE ESTABLISHMENT OF PRODUCTION OF means of destruction as a significant sector of the economy, both quantitatively and qualitatively, has necessarily altered many of the fundamental laws of motion of capitalism. It has not, however, transformed capitalism into a system capable of producing permanent peace and prosperity. It has not eliminated the class struggle either nationally or internationally. It has not eliminated the need for a socialist organization of society. On the contrary.</p>
<p>Despite the inflationary boom that has taken place during the past 18 months or so – let us admit that its size and extent have amazed us at least as much as it has amazed the leaders of the bourgeoisie – the process of atrophy that we have described repeatedly during the past several years remains at work.</p>
<p>Government intervention in its manifold forms may possibly reduce what otherwise would perhaps be a level of unemployment of 10 million to one of 5 million (in a period of recession under the Permanent War Economy, which is in the process of developing) but it is entirely possible that the political impact of an unemployment level of five million in an economy so highly geared as the present, may have far more serious consequences for the class struggle than 10 million did in the 1930s.</p>
<p>To put the matter another way, when the ratio of war outlays to total production declines, we find that the hypodermic effect of these injections into the economy is considerably more weakened than the mere recital of the figures would lend one to believe. It is, to use the metaphor of the drug addict, a case where a constantly increasing dosage is required to achieve the same effect, so that when a period arrives when the dosage is decreased the effects on the patient are startling.</p>
<p>To say that the recent boom has been purely a peacetime boom, without benefit of war outlays, as do many of the advocates of the “permanent peace and prosperity” school, is to fly in the face of facts. The ratio of war outlays to total production has undoubtedly declined somewhat in the last few years (the detailed computations and their analysis must await another article) but they still remain well above the 10 per cent level which we originally established as the significant dividing line.</p>
<p>A precarious economic equilibrium has been achieved both domestically and internationally. The extent of the precariousness is about to be revealed. Despite the very sizable production increases of the past 18 months, factory employment is still below 1953’s highs, thereby revealing that the boomlets must necessarily be shortlived.</p>
<p>Had not the Korean war intervened, the present measures of state intervention would long ago have been revealed as inadequate to achieve any type of capitalist stabilization. The forces of production are on the verge of breaking through their capitalist integument. The development of atomic power will require socialism. That is the true measure of the profound social crisis that exists in a very real sense throughout capitalist society today. That is why this feeling of <em>malaise</em> penetrates all sections of the bourgeoisie from the most prosperous to the least. They know that this prosperity is, above all, temporary.</p>
<p>The precarious equilibrium of the domestic economy, in turn, rests upon an equally precarious international equilibrium. So long as this relative balance of forces is maintained between Stalinist and American imperialism, and so long as the fear of total destruction operates to restrain an immediate resort to military adventures, the precarious equilibria, both internationally and domestically, can continue. This, however, is clearly a very limited situation.</p>
<p>An interesting document in this connection is a study prepared for the Joint Committee on the Economic Report by the Legislative Reference Service of the Library of Congress. It is entitled, <em>Trends In Economic Growth, A Comparison of the Western Powers and the Soviet Bloc</em>, and was published in 1955.</p>
<p>It is not necessary to go beyond two of the important conclusions to realize that the international equilibrium is indeed temporary and precarious.</p>
<p>In connection with power, which after all is crucial, the report states: “Atomic power, if it were to be systematically developed by either Western Europe or the Soviet Bloc at relatively low cost, could alter the economic balance between the two areas quickly.” Since both sides are feverishly straining to develop atomic power, how long will it be before one or the other succeeds in obtaining this relative advantage which would immediately upset the precarious equilibrium?</p>
<p>So far as the growth of the respective economies is concerned, the report states that:</p>
<p class="quoteb">“In the period 1938–1953, as a whole, the national product of the United States increased about three times as rapidly as that of independent Europe, and almost twice as rapidly as that of the Soviet Union. To a substantial degree, this difference reflects the varying effects of World War II. Between 1948 and 1953 the national product of the United States grew not quite 30 per cent faster than that of independent Europe and <em>only two-thirds as fast as that of the Soviet Union.”</em> (My italics – <em>T.N.V.</em>)</p>
<p class="fst">In other words, in the real postwar period the economy of the Soviet Union has been outstripping that of the United States in a ratio of 3 to 2.</p>
<p>No wonder the inheritors of Stalin’s empire prefer a period of “competitive coexistence,” for even if we assume that American output today, and the strength of America and its allies in general, is twice that of the Soviet Union, or of the Soviet Union and its allies, it would take less than 10 years – assuming that the Soviet Union maintains its relative advantage of an annual increase that exceeds that of the United States by a ratio of 3 to 2 for the Russian economy to surpass that of the United States. At the present respective rates of increase, even without the inevitable recession in the United States, it would take less than a decade for the balance of power to be radically altered.</p>
<p>Once the precarious international equilibrium is basically changed, then the domestic equilibrium, if it has not already been upset, will surely be destroyed.</p>
<p>It is entirely possible that the productivity of labor under Stalinism does not have to equal the productivity of labor under capitalism before the former has achieved military-economic supremacy over the latter. We do not, however, have to speculate about these matters. It is sufficient merely to postulate that the international equilibrium is precarious and necessarily short-lived. This, whether they admit it or not, destroys a fundamental postulate of the advocates of the “permanent peace and prosperity” school, for what they are really saying is that internationally the power blocs constituting Stalinist imperialism on the one hand, and American and allied imperialism on the other hand, can continue indefinitely their huge level of armaments.</p>
<p>It is true, of course, that both Stalinism and capitalism require each other in order to exist. This is one of the paradoxes and contradictions of the present world situation. While the prospects of a resolution of this cosmic paradox may not seem too bright at this time, that they should not cause any elation in the camp of the “permanent peace and prosperity” school. There is no peace. And the prosperity of American capitalism is built on quicksand, as the future will demonstrate.</p>
<p class="fst">January 1956</p>
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T.N. Vance
Economic Prospects for 1956
Capitalist Stability versus Current Economic Trends
(January 1956)
From The New International, Vol. XXI No. 4, Winter 1955–56, pp. 215–235.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
AMERICAN CAPITALISM ACHIEVED NEW PEAKS in production, employment and income during 1955. As the January 1956 Monthly Letter of the First National City Bank puts it: “The nation has ended its busiest and most prosperous year with the indexes of over-all business activity at the highest of the year. Latest figures on production, non-farm employment, consumption, income, and investment, indicate that the trend is still upward.”
The New York Times’ financial editor, John G. Forrest, in the annual review of the nation’s business, on January 3, 1956, stated: “Boom all the way. That was 1955 for United States industry.” Mr. Forrest summarizes the performances of 1955 by stating:
“When the tally is struck for 1955, it probably will show a gross national product of around $387 billion. That would be 7 per cent above 1954’s total and 6 per cent above 1953’s, the previous peak.”
No matter what measure is taken, whether it be the Federal Reserve index of production or just such a simple index as the output of steel, or any other likely measure, there is no doubt that 1955 was the number one year so far as production is concerned in the history of American capitalism.
This remarkable performance of the American economy, which to a certain extent is paralleled by the rest of the capitalist economy throughout the world, has persuaded some bold apologists for the bourgeoisie and some ex-socialists to reach the conclusion that there is no longer any class struggle in the United States; that depressions arc a thing of the past and that through some miraculous process (not quite clearly understood or explained by anyone) the millennium has arrived. There is no longer any need to advocate socialism because American capitalism, under the Eisenhower Administration, has produced a land of plenty and permanent prosperity. Some even go so far as to refer to this new utopian state of affairs as the “land of permanent peace and prosperity.”
The process by which The Permanent War Economy becomes “permanent peace and prosperity” is a triumph for the semantic arts. The question remains, however, to what extent, if any, has capitalism under The immanent War Economy eliminated the business cycle, or, if you prefer, eliminated severe depressions?
The interest in the subject is such that the Chamber of Commerce of the United States has devoted an entire pamphlet to the subject, entitled, Can We Depression-Proof Our Economy? This pamphlet refers to the adjustments and increases in production that have taken place since the end of World War II, and to the fact that there are “Numerous automatic built-in stabilizers or cushions which we did not have in 1929.”
“All these factors,” the pamphlet concludes, “have lead some students to believe that we are more or less depression-proof; or at least, that serious general depressions are less likely to occur than formerly.” The question is then raised: “Is this optimism justified? Or, have we merely been the beneficiaries of exceptionally favorable postwar factors?”
The United States Chamber of Commerce then proceeds to review the “evidence.” A Prentice-Hall release is cited in which it is stated that: “It is becoming crystal clear that serious depressions have been abolished in the United States by popular vote.” (Sic!)
It is pointed out that the 1953–1954 recession was unusually mild and the fact that it did not degenerate into a full-fledged depression is most heartening and perhaps warrants the belief that there are some new factors on the scene in the form of these “built-in stabilizers,” and while no categorical statement is made, the presumption is that perhaps, at the very least, severe depressions are a thing of the past.
On the other hand, the Chamber of Commerce proceeds to point out to those that arc unduly complacent that they should take heed from the warning issued by J.K. Galbraith published in Harper’s magazine, October 1954, to the effect that “important people begin to explain that it cannot happen because conditions are fundamentally sound.” From which Mr. Galbraith draws the conclusion that that is precisely the time to worry because another collapse, comparable to 1929, in his opinion, is definitely possible. The Chamber of Commerce, moreover, does not lose sight of the political importance of the subject. It points out that “if we attain this target [sustained prosperity], other domestic problems will remain manageable. For international reasons as well, the attainment of this goal is important. It will refute the Marxists’ criticisms of private capitalism both here and abroad.” The question of the so-called new perspective and economic outlook, that is, permanent prosperity, has engaged the President’s Council of Economic Advisers. In their 1955 economic report to the President, they review the experiences of the 1953–54 recession and draw the following lessons (quoted by the U.S. Chamber of Commerce):
First, that wise and early action by government can stave off serious difficulties later;
Second, that contraction may be stopped in its tracks, even when governmental expenditures and budget deficits are declining, provided effective means are taken for building confidence;
Third, that monetary policy can be a powerful instrument of economic recovery, so long as the confidence of consumers and businessmen in the future remains high;
Fourth, that automatic stabilizers, such as unemployment insurance and a tax system that is elastic with respect to the national income, can be of material aid in moderating cyclical fluctuations;
Fifth, that a minor contraction in this country need not produce a severe depression abroad;
Sixth, that an expanding world economy can facilitate our own readjustments.
Lest the apostles of the new religion of “permanent peace and prosperity under capitalism” jump to the conclusion that they have a real ally in the United States Chamber of Commerce, let us point out that immediately after the analysis presented above and the quotation from the President’s Council of Economic Advisers, the United States Chamber of Commerce states: “It would be difficult to find a single economist who believes, as some did in the late 1920s, that we are, indeed, depression-proof.” If the United States Chamber of Commerce is not ready to take the plunge into the new camp of “permanent peace and prosperity under capitalism,” there are others who are not quite so cautious. And that is pretty much the position of Sumner H. Slichter which he has expressed in various articles, including one published in the Atlantic Monthly for May 1955 entitled, Have We Conquered The Business Cycle?
While Slichter likes to leave himself an “out,” he is also fond of making headlines. For example, in a recent article of The New York Times Magazine section of December 4, 1955, dealing with the relationship of our economy to politics, Slichter states:
“A severe depression would undoubtedly sharpen the differences between the parties in the United States and would accentuate the influence of the left-wingers in the Democratic Party, but the days when this country can experience anything worse than moderate or possibly mild depressions are gone forever.” (My italics – T.N.V.)
WHAT ARE SOME OF THESE “BUILT-IN stabilizers” that are supposed to have eliminated severe depressions and achieved a more or less permanent modification in the business cycle? They are summarized by the United States Chamber of Commerce in the aforementioned pamphlet as follows:
(1) The quick offsetting reactions which occur in our tax structure, with the heavy reliance on the income tax; (2) Stability and size of the government expenditures; (3) The farm price support program; (4) Unemployment compensation; (5) The numerous private and public pension programs; (6) The Federal Deposit Insurance System; (7) The self-amortizing nature of most private debt; and (8) The volume of liquid assets held by individuals and businesses.
To the extent that these factors mean anything – and they do mean something that is very important – what is being said here is that capitalism under The Permanent War Economy has achieved a life of more or less permanent government intervention and that this government intervention has modified the business cycle.
Certainly the government’s Council of Economic Advisers takes credit for the fact that serious economic fluctuation or depression has been avoided in the past few years. Its chairman, Dr. Arthur F. Burns, puts it this way:
These are the basic premises that have controlled our business cycle policy in the recent past. If governmental policy in the months and years ahead continues to adhere to these premises, if government steadily maintains a watchful eye on the state of business and consumer sentiment and if it gives heed to the need of avoiding inflation as well as depression; we may, I think, be reasonably confident that – although we are likely to continue to have fluctuations in individual markets, to some degree even in the economy as a whole – we will avoid in the future the business depressions that have marred our brilliant record of free enterprise in the past.
This would seem to put the Council of Economic Advisers, an official government body, almost in the camp of Sumner Slichter.
The United States Chamber of Commerce concludes its pamphlet on this question as follows:
Are we, then, depression-proof? Prolonged and deep depressions are avoidable and will not occur again, unless we take complete leave of our wits – which could be. Minor fluctuations and rolling adjustments in industry after industry are inevitable. While having unfortunate aspects, they nevertheless perform a useful and essential function. Individual companies will face changing fortunes. Crises in international affairs can be upsetting. Domestic political uncertainties, threats of undue business regulation or taxation – these and many other factors could undo the promising developments in the field of stabilization. Stability has to be earned. (Italics in original only in the last sentence. – T.N.V.)
Is this a new era or is it not? On the one hand, severe depressions are avoidable and will not occur, that is, “unless we take complete leave of our wits,” but apparently it is possible, according to the United States Chamber of Commerce, that we may take complete leave of our wits. And one suspects that taking complete leave of our wits has reference to such measures as increasing the minimum wage law, etc.
Let us not be completely disheartened because later on in its conclusion the Chamber of Commerce makes the fairly bold statement: “If we have the courage to avoid excessive booms and the wit to use what we know, there is reason to believe that future instability can be kept within fairly tolerable limits.” (Sic!) In other words, if we can avoid depressions there will be no depressions. But how do we know we can avoid depressions?
Lest anyone accuse the United States Chamber of Commerce of a definitive statement on a subject of this kind, we must quote the very last sentence in their brochure: “And, since the future can never be foreseen with certainty, it is always wise to watch out for surprises.”
Lest there be any possible misunderstanding on this question, let us make it perfectly clear. If capitalism can succeed in eliminating the business cycle, i.e., in achieving permanent peace and prosperity, then not only has the class struggle been so transformed as to be unrecognizable but clearly there will be no need for a socialist form of society to organize the productive forces for capitalism will have guaranteed their permanent increase. The question, therefore, is of great theoretical and practical importance.
If the performance of the economy in 1955 was at record levels, the outlook for 1956 is clearly relevant. Will this boom keep rolling on and on and on, so that memories of depressions fade into the dim and distant past and pretty soon there will be no living inhabitants who recall the depression of the ’30s or the rather severe recession of ‘47 and ’48 or even the mild recession of ’53–’54?
The United States Chamber of Commerce is extremely bullish in its outlook for 1956. The forecast by its chief economist, Emerson P. Schmidt, states:
“The expansion which began in the summer of 1954 carried through 1955. The high Christmas sales will start 1956 off with good levels of employment, production and general economic activity. The year 1956 may well be our best year in history.” (My italics – T.N.V.)
There is no hedging here – “the year 1956 may well be our best year in history.” Of course, there is the qualifier “may,” but on the other hand the implication is that it should certainly be the best year in history.
Mr. Schmidt is a brave man and he has made these statements in a publication of the United States Chamber of Commerce, entitled Nation’s Business, which receives rather wide circulation. He states:
“To see unmistakably into the future, of course, is not given to man. Surprises – pleasant and unpleasant – are likely. But, in so far as it is possible to weigh and assess recent trends, optimism for next year is justified.”
The same issue of Nation’s Business (December 1955) contains an article by businessman Henry Ford II on the same subject, Outlook for ’56. Mr. Ford, in answer to the query, How does business look to you in 1956? states:
We are very optimistic. I think that it is a little early to tell about the whole year. Certainly the first half ought to be pretty good, but we have an election year coming up. People get preoccupied with candidates and issues in an election year and when feelings run high business has a tendency to run low. As a result 1956 might not be quite as big as this year – but I think it ought to be a good year. (My italics – T.N.V.)
“1956 will be a very prosperous year, but perhaps not quite as good as 1955.” It is possible that businessman Henry Ford II’s outlook is colored by the fact that his firm produces automobiles. In answer to the question, How about the automobile business?, Mr. Ford states:
The automobile business will have a fine year, too. My personal feeling is that it won’t be as big as 1955. How big the reduction is going to be is anybody’s guess. If we assume a 10 per cent reduction, we will still have our second biggest year. Ten per cent of what do you want to say, 7,600,000? That would still be the second biggest year after 1955.
WE SHALL RETURN TO THE OUTLOOK for the automobile industry. Meanwhile, let us consider a few more general statements on the business outlook for 1956. The confidential Babson’s Reports issued early in November on the 1956 forecast for stocks and bonds shows a rather sharp disagreement with the extremely bullish statements that have emanated from most sources. States Babson: “For the year ahead we are forecasting that the Babson chart index of the physical volume of business will average around 150 – some five per cent below the record 1955 mark.” Babson amplifies its general prediction by stating: “We look for a decline in general business during the first half of the year which is likely to be somewhat more vigorous than the recovery which we anticipate will set in during the last half of the year.”
The Babson forecast is unique in that all those who are cautious about ’56 other than Babson, state that the boom will continue to roll during the first half of the year and if there is a decline it will be in the second half. Babson, however, predicates its reverse forecast on the fact that it expects a decline in the automobile industry and that this decline will be concentrated in the first half of the year but in the second half of the year when 1957 models will be introduced very early, there will be a sharp increase. Babson also expects a sharp decline (about 15 per cent) in the home building industry in 1956. He feels that when this trend is apparent the government will then step in and take steps to revive building. There is a logical analysis here; whether it will prove to be accurate, of course, remains to be seen. The important point, however, is that here is a very reputable bourgeois outfit (whose reputation for accurate forecasting in the past is unusually good) that does not feel that the boom continues to roll on and on, but that 1955 was the peak. This, of course has important implications for the general question under analysis.
Of equal interest with the Babson forecast is that of Fortune Magazine according to its own blurb, “the ne plus ultra of business publications.” Fortune’s own summary of its 1956 economic forecast contained in its January 1956 issue under the Business Roundup is to the effect that:
“1956 may be a little rough on a number of businesses. This, despite the fact that it starts out as the best year yet: in ’56 the Gross National Product rate will edge up to around $403 billion from ’55’s sensational year-end rate of nearly $400 billion. But there will be a slight down-turn about midyear.”
More interesting is Fortune’s forecast by major industries:
If you’re in any branch of capital goods – machinery, plant, equipment – things look good. But home goods are slowing, steel will go down by midyear, home building starts will be off 100,000 units or so, car buying by a million or more. All consumer businesses are up against the competition of $35 billion in consumer debt repayments during ’56, up $4 billion from ’55. And unemployment could rise to over four million, since two million jobs will be cut out by increased productivity, and some 700,000 new workers will join the labor force ...” (Italics mine – T.N.V.)
Most business men are optimistic about 1956. Retailers particularly reflect the results of a study made in October by the Survey Research Center of the University of Michigan which indicated that 71 per cent of all people expect good times to continue at least through the first eight months of 1956.
At the recent meetings of the American Economics Association there was much discussion about this question, and it was noteworthy that there is now some hedging about the continuation of the business boom. As The New York Times in Mr. Forrest’s column of January 1 puts it:
“Some economists last week differed on the 1956 business picture, with several leaning to the theory that the boom would reach its peak early in the year and that caution should be the watchword after that.”
The only really discordant note was struck by Dr. Edwin G. Nourse, former chairman of President Truman’s Council of Economic Advisers. Dr. Nourse predicted (according to the same article in The New York Times): “We should contemplate a drop of 15 or even 20 per cent in business during 1956.” (Italics mine – T.N.V.) A drop of this magnitude would mean a decline of $60 to $70 billion in gross national product and a catastrophic increase in unemployment. Here we would have not just a mild depression, but from every point of view a rather severe one.
There can be no doubt that Nourse was expressing what might well be termed “the Democratic point of view” on the business outlook. As a matter of record, this view was expressed by the supplemental views of the Democrats on the Joint Committee on the Economic Report in connection with the January 1955 Economic Report of the President. (Report No. 60, 84th Congress, First Session). This supplemental report showed that while they agreed that recovery had taken place from the trough of the 1953–54 recession, we were not really out of the woods, and that there was great danger that developments in the automobile industry and related industries such as construction could cause a downturn of fairly sizable proportions.
To quote the Democratic members (Senators Douglas, Sparkman and O’Mahoney and Representatives Patman, Bolling, Mills and Kelley):
Because the president’s confident expectations for the coming year are centered on a shift of inventory policy from liquidation to accumulation, on the recovery in automobile production, and on rising expenditure for new construction, it is necessary to examine carefully these areas. These may not be sustained throughout the year. A sharp cut-back in automobile production in the last half of the year would have pervasive effects in the steel, coal, textile, and accessory parts industries. Some analysts expressed uneasiness whether the recent rise in construction will persist. If, however, the automobile or construction industries should encounter heavy weather in the last half of the year, and if other segments of the economy do not recover sufficiently to offset them, it would be a matter of prudent and judicious action to fly the storm warnings. Economic declines are like landslides – it takes less to stop them early than after they gain momentum.
The record shows that the Republicans were better forecasters in ’55 than 1956, but the Democrats have held to their basic analysis. What they are doing (and Nourse is clearly one of their most influential spokesmen) is to project into 1956 the forecast they had made for the later part of 1955.
What does Nourse base his views on? Actually, he is basing himself on a better understanding of the long-run and traditional functionings of capitalism than many of our new apostles of the virtues of “free private enterprise.” Nourse has devoted some study apparently to some of the fundamental trends at work, particularly in relation to automation and increasing productivity. His testimony on October 28 before the Subcommittee on Automation of the Joint Committee on the Economic Report received a proper headline in The New York Times of October 29, 1955, namely: Economist Fears Overproduction.
Dr. Nourse’s testimony is worth study. He states:
The real change came when we passed from this kind of continuous process mechanization to that in which electronic devices make it possible to dispense to considerable extent with the mental element in manual control and to use the feedback principle extensively. Under this principle electronic mechanisms make it possible to conduct more elaborate, more economical, and more precise continuous productive operations because the outcome of the process controls the process itself, starting, altering, or stopping it so as to make it produce a desired result. This should dispose of the cliche that automation is nothing new – just more mechanization. It has its roots in mechanization, to be sure, but something new was added when electronic devices made possible the widespread application of the feedback principle ...
The issue which automation now raises is this: Will it alter present economic relations in such ways as to disturb these favorable conditions, or will our business system be able to translate these technological improvements fully and properly into still greater general prosperity and higher standards of living? It is evident it will change wage income both by numbers of jobs, some places up and some places down, and by wage rates upgraded here and downgraded there. It will obsolete some capital equipment and make important demands for new capital equipment. It will affect unit costs for some products, but not all; prices in some markets, not in others; profits and dividends, tax yields, and public spending ...
In contrast to the preponderant attitude of business executives, labor union officials have been outspokenly concerned about the economic impact of automation on the well-being of the mass of worker-consumers in the years immediately ahead ... “But we believe that much study is needed by all parties if the gains are to be made as large and as steady as possible and the temporary dislocations and local burdens or losses made as small as possible and most equitably shared.” With this view I find myself in accord rather than with the idea that the problem will take care of itself or be disposed of automatically by the invisible hand of free enterprise ...
When businessmen or others say that technological progress is good per se and that it takes care of its own economic process, they invoke a simple logic of the free enterprise economy. The entrepreneur seeks profit by adopting a device for raising efficiency. This lowers cost. Price falls proportionately and thus broadens the market. This restores the number of jobs or even increases them and raises the level of living or real incomes. This comfortable formula presupposes a state of complete and perfect competition in a quite simple economic environment with great mobility of labor, both geographical and occupational. But these are not the conditions of today’s industrial society, with large corporations and administered prices; with large unions and complicated term contracts covering wages, working conditions, and “security”; with complex tax structures, credit systems, and extensive government employment and procurement. The smooth and beneficent assimilation of sharp and rapid technological change has to be effectuated through intelligent and even generous policies painstakingly arrived at by administrative agencies, private and public ... (Italics mine – T.N.V.)
Against the complacent picture presented by some witnesses at these hearings let us put the actual sequence of economic developments in postwar United States. Technology (with infant but growing automation) has been put to full use under conditions of extraordinarily high and sustained demand, public and private. Labor, viewing this unparalleled rise in productivity, has sought to capture the largest possible share in the form of successive rounds of widespread wage increases in basic rates, escalation formulas, and fringe benefits. As the unit cost of labor went up, management sought to maintain or improve its earning position by raising prices and/or by introducing labor-saving machines and administration. The first solution of management’s problem – that is, price raising – has been facilitated by our elastic monetary system, and we are now drifting along on a Sybaritic course of mild inflation as a way of life. The second solution of management’s problem of meeting labor’s wage demands has accelerated piecemeal mechanization, yesterday’s infant “scientific management,” today’s adolescent automation. [And still there are some who say the class struggle has disappeared!] ...
I strongly suspect that we have already built up at many points a productive capacity in excess of the absorptive capacity of the forthcoming market under city and country income patterns that have been provided, and employment patterns that will result from this automated operation. We are told on impressive authority that we have not been making adequate capital provision for re-equipping industry in step with the progress of technology. This is probably true if it means making full application of electronic devices and univac controls generally throughout our industrial plant. But we have not yet demonstrated our ability to adjust the actual market of 1956-1957, etc., to the productivity of the production lines we have already “modernized.” They have not yet come to full production, but as they do we see incipient unemployment appearing. Since that, along with slight credit tightening, will tend in some degree to restrict the market appetite, it seems likely that next year will see a still further enlarged output somewhat out of balance with this reduced demand. Suggestions have been made that balance could be restored by lowering prices or by cutting the work week. Both processes take time and present their own difficulties. Meanwhile, the current trend is toward higher prices reflecting wage advances already negotiated ... (My Italics – T.N.V.)
In the course of these hearings various members of the committee and its staff have raised the question whether legislation should be recommended to deal with the problems created by so-called automation. The answer, I think, is an unqualified NO. To curb or redirect the process of scientific discovery and engineering application and the adaptations of businessmen and consumers to these changes would be utterly repugnant to the system of free enterprise and individual choice that have made our country great. None the less, every time the Congress passes a money bill, every time it revises our tax structure, every time it passes a regulatory measure for price maintenance (alias “fair trade”), farm price supports (alias “parity”), or stockpiling of copper, rubber, wool, or silver it is giving punch-card or tape instructions to some part of the continuous flow mechanism of our economy. Public policy on all these matters should be framed in the light of the fullest possible understanding of the integrated character of the price-income structure and behavior of our economy, with an eye single to promoting “maximum production, employment, and purchasing power” for the whole people, not to serve the immediate interest of any special group ...
But in a free enterprise system human judgment is given play at most of the important points of interrelationship. Unless the responsible executives seek to integrate their operations to the prosperity of the whole economy and use the full apparatus available for gathering and processing the data relevant to policy determination our economic process will disintegrate into wasteful struggles for individual or group short-run advantage. Much of the potential benefit of technological progress (of which automation is one particular expression) may be lost through failure to make our economic structure and practices equally scientific.
It is not necessary to belabor the point. There are sharp differences of opinion within the bourgeoisie itself on the outlook for 1956. The fact that some of the more eminent representatives of the bourgeoisie are not too confident about the outlook for 1956 or about the perpetual prosperity that the disciples of the new era proclaim, ought to give these disciples some pause. That it will, however, is highly dubious. They will have to encounter hard reality before their views are shaken.
Perhaps the proper way to put it is that there is a form of malaise penetrating almost every sector of society. For example, The New York Times’ column, The Merchant’s Point of View, in its December 11, 1955, issue, states:
“Industrial production, now leveling off after surpassing all previous peaks, will be unable to take care of a growing labor force. This will mean a rise in unemployment which can exercise a dampening effect upon buying enthusiasm.” (Italics mine – T.N.V.)
If the business cycle has been eliminated, or if severe depressions are a thing of the past, relegated to the history books, one may logically ask, why does this feeling of malaise persist?
The previously cited monthly letter of the First National City Bank of January 1956 observes:
The economy does not yet show convincing signs that excesses have reached dangerous proportions, nor are they in any sense inevitable, but they could develop if we substitute enthusiasm for caution and emphasize prosperity to the extent that we forget its problems. The biggest problem of all is to slow down to a sustainable rate of growth without going through a cycle of boom and bust.” (Italics mine – T.N.V.)
Is this merely a psychological hangover from the past history of capitalism or is there a realistic danger that depressions are still possible?
It seems to us that the general feeling of cautiousness or malaise that has more recently penetrated the more knowledgeable circles of the bourgeoisie and its spokesmen, is not without practical foundation. The recent boom has rested in large part on the automobile and construction industries. If these industries are indeed headed for declines of 10 to 15 per cent, then there will be rapid repercussions throughout the economy.
As for the outlook for the automobile industry, previously we cited the opinion of Henry Ford II. We now have the opinion of Harlow H. Curtice, president of the General Motors Corporation, that there will be a 12 per cent drop from the 1955 production total of 7,940,862 cars. This would be almost one million cars less to be produced in 1956 than in 1955.
George Romney, president of American Motors Corporation, put the decline at 15 per cent. Only L.L. Colbert, president of the Chrysler Corporation is bullish among the automobile magnates.
As The New York Times of December 11, 1955, put it:
“Nobody in the industry talks about market saturation. But nobody denies that sales are becoming increasingly difficult to make.”
As a matter of record, and as reported in The New York Times of December 25, 1955, the new car inventories have increased to the very substantial stockpile of 710,000, which is a record for this time of the year when new models have just been introduced. Even more significant is the fact that this large figure includes 325,000 new 1955 models which are likewise awaiting disposal.
An Automotive News tabulation, according to The New York Times article mentioned in the preceding paragraph, shows that before the full production of 1956 models got under way the dealers had 569,335 new cars on hand. For December 1954 the total stood at 265,153 units. In other words, there has been a substantial increase in the stocks of available cars, or to put the matter in simpler terms, production is outstripping sales. Automobile dealers are being squeezed and are beginning to go out of business.
It would appear to be the overwhelming consensus that American capitalism cannot in 1956 duplicate the almost 8,000,000 passenger car production of 1955. There will be a decline of 10 to 15 per cent. A decline of this magnitude is a matter not only of several billion dollars of automobiles, but of steel, parts and all the various supporting and allied industries, and has an accumulative effect for the simple reason that the automobile industry stands at the apex of the economy.
If it were possible for capitalism constantly to increase the output of automobiles and allied products and to dispose of them, then there might well be hope for the “permanent peace and prosperity” school. The facts, however, are otherwise. The natural laws of capitalism assert themselves in relatively quick order and we find that relative over-production is today a current problem plaguing the automobile industry. Tomorrow, the problem will be unemployment in the automobile industry and its allied industries.
As I told the editor when this article was requested, if he were willing to wait a few months history would provide all the answers needed to the nonsense that American capitalism has achieved permanent peace and prosperity. So far as the automobile industry is concerned, The New York Times of January 14, 1956, reveals that the manufacturers of automobiles are themselves not independent of economic facts, nor are they disposed to rely entirely on the verbiage of their public relations departments. The inevitable has happened, and sooner than expected. The headline, Big 3 Car Makers Cut Work Forces, makes it very clear that the predictions of a decline in automobile production in 1956 are about to be realized.
The subject has far greater importance than the 8500 workers who have so far been laid off at 15 or so automobile plants. To quote The New York Times:
A series of lay-offs was announced yesterday by the Big Three auto companies.
As one of them put it, the lay-offs were ordered to “maintain a balance between passenger car production and market demand.”
It has been no secret in the industry that sales of the 1956 models have been disappointing and new cars are piling up on dealers’ lots. Auto executives have frankly predicted some decline this year from the record sales and output of 1955, although they do not agree on how much of a decline it will be.
In recent weeks, the industry has abandoned Saturday and other overtime work, which had prevailed almost without a break for more than a year. (Italics mine – T.N.V.)
The automobile industry graphically illustrates the dynamic character of present-day capitalism, with its enormous accumulation of capital and consequent increase in productivity of labor.
Just what has been the rise in the productivity of labor is a subject which baffles the specialists. The Bureau of Labor Statistics has worked out many different methods of estimating productivity, and they generally show an increase of 3 to 3.6 per cent annually, depending upon the method used. In some industries, however, depending upon the method used, there can be an annual increase of labor productivity of as much as 10 per cent or more, the automobile industry being one of the noteworthy industries in this respect. If, however, we take a very conservative figure of a little better than 3 per cent as the annual increase in labor productivity, and if we recall that we now have an economy where there are well over 60 million employed, it is clear that normal increase in labor productivity, which accompanies normal accumulation of capital, renders superfluous approximately 2,000,000 workers each year. That is, this number would be rendered superfluous unless the economy could increase its output sufficiently to absorb this amount.
In addition to these 2,000,000 relatively displaced workers, for whom jobs must be found each year, there are, due to the increase in population, approximately 700,000 new entrants into the labor force each year. Here, then, is a measure of the problem that confronts American capitalism. Production must be increased sufficiently to absorb in the neighborhood of 2,700,000 workers annually in order merely to stand still so far as unemployment is concerned. Should there be instead of a five per cent increase in production, or a nine per cent increase which has been recorded in 1955, a decline of 10 per cent or even of five per cent, the results will be noticeable in very short order and will astound the advocates of the “permanent peace and prosperity” school.
The tip-off, in its own way, that 1956 will indeed be a considerably different year than 1955 is seen in the Christmas announcement by General Electric that its appliance prices are being slashed up to 30 per cent. This constitutes a reduction, according to an article in The New York Times, December 25, 1955, of approximately $23 million at retail for G.E. products. For example, a G.E. vacuum cleaner that has been selling for $69.95 will now be listed at $49.95. A G.E. toaster that had been sold for $19.95 will now be available at $17.95. The automatic steam iron has been reduced from $17.95 to $14.95. And so it goes.
Already G.E.’s competition has been forced to toe the line and other appliance manufacturers have announced similar or identical, or, at the very least, comparable reductions.
In part, undoubtedly G.E.’s move was designed to get a jump on Westinghouse, its major competitor whose production is considerably retarded by the present strike; in part no doubt, G.E.’s action is motivated by its desire to meet competition from the discount houses. But in part, and this is the most important part so far as we are concerned, the action of G.E. is predicated upon the fact that it has become increasingly difficult for G.E. dealers to dispose of G.E.’s enormous production. The squeeze is on, and as a matter of fact, the aspect of G.E.’s price reduction which received most comment in the business press is not the actual reduction in prices themselves, but the fact that G.E. took the revolutionary step of reducing the margins of profit available to the wholesaler and retailer. This is absolutely unprecedented in recent years and its consequences will indeed be far-reaching.
The automobile situation and the appliance situation typify the growing crisis in consumer durables – one of the twin peril points confronting American capitalism as it enters 1956.
THE OTHER PERIL POINT IS the agricultural crisis. Here, of course, there is no dispute about the fact that there is a crisis and that its political repercussions must be profound. Many competent observers, for example, interpret the large-scale Democratic victories in the by-elections of 1955 as due to the fact that the farm population, as a whole, has not participated in the boom; that the agricultural crisis has started much earlier and has deepened progressively as time goes on. This, of course, is in accordance with a typical capitalist pattern. It does not, however, alleviate the situation so far as the farmer or the political impact of the farmers’ crisis are concerned.
For a measure of the agricultural crisis we can turn to the November 1955 issue of the Survey of Current Business, the publication of the U.S. Department of Commerce. This staid official government publication is certainly not going to exaggerate the proportions of the agricultural crisis. Yet, in an article by L. Jay Atkinson entitled Agricultural Production and Income, it is stated:
The pressure of increased supplies has been such that a further decline has occurred in agricultural prices and in farm income. In the first three-quarters of 1955, cash receipts from farm marketings and CCC loans were about 4 per cent below a year earlier. Prices were about as much lower with the volume of marketings running about even with 1954. Production expenses have continued little changed and net farm income was down about one-tenth in the first 9 months of 1955 as compared with a year earlier.
Further on Mr. Atkinson states:
The decline in farm income and the small change in the asset position of farmers in recent years compares with a very substantial general advance in income and net assets in the non-farm economy. Although a gradual decline in the share of income from agricultural sources has occurred for a considerable period in the United States, a sharper drop in the past several years reflects a combination of curtailed exports of farm products and a considerable increase in output. The related influence of rising agricultural output throughout the world has effected a substantial reduction in world agricultural raw material prices and has limited any rise in United States farm exports during a period of stepped- up efforts at surplus disposal.
These influences have lowered farm income from the high level attained after the end of World War II despite a rise in consumer demand for farm products. They have been accompanied by a considerable shift in workers from farm to non-farm areas. After allowing for the reduction in the number of persons on farms, income from farming per person living on farms is down about one-fourth from the postwar high, and per capita income of the farm population from both farm and non-farm sources is off about one-eighth. Meanwhile non-farm personal income per capita has continued to advance. Farm income per capita now bears about the same ratio to non-farm income per capita as in 1929. (My italics – T.N.V.)
Of course, the record production has occurred in the face of all types of incentives to reduce production and more of the same is the only program that the Eisenhower Administration has to offer. It is clear that the relative position of the various farming classes has worsened materially in the post-war years and the end is not in sight.
The course of farm production in recent years is shown by the following table:
FARM PRODUCTION (1947–49 = 100)
1950
1951
1952
1953
1954
19551
Farm output
100
103
107
108
108
112
Livestock and products
All livestock and products
106
111
112
114
119
121
Meat animals
107
114
115
114
119
123
Dairy products
101
100
101
106
108
109
Poultry and eggs
111
119
123
127
134
134
Crops
All crops
97
99
103
103
100
106
Feed grains
104
97
102
101
104
112
Hay and forage
105
110
105
108
108
115
Food grains
83
81
105
96
83
78
Vegetables
101
95
96
100
97
100
Fruits and nuts
102
105
102
104
106
108
Sugar crops
117
93
95
106
116
108
Cotton
70
106
106
115
95
104
Tobacco
101
115
112
102
109
113
Oil crops
116
106
104
102
118
132
1. Based on information available November 14.
Source: U.S. Department of Agriculture, Agricultural Research Service.
It will be seen that total farm output has increased 12 per cent during the past six years, which include the Korean war and the post-Korean war periods. The major increase has taken place in livestock and related products. Since the proposed incentives to reduce acreage will not in any way inhibit increases in livestock and related production, there can only be a further accentuation of this disproportion.
The proof of the pudding, so far as the farmers as a whole are concerned, is reflected in the parity ratio – this dubious measure of the ratio of prices received to prices paid, going back to a base of 1910–1914.
Whatever we may think of parity as a concept, the fact of the matter is that the trend in the parity ratio does reveal in one simple index what has been happening to the farming classes as a whole and is a relatively accurate measure of the extent of the agricultural crisis.
The current agricultural crisis is hardly a new development. It had its roots in the last years of the Truman administration, as world agricultural production was restored to pre-war levels, thereby beginning the decline in the export of large quantities of surplus American farm products. Throughout the Eisenhower administration the problem of the farmers – which in turn is a direct product of their relatively worsening economic situation – has been one that is uppermost in the minds of the politicians and frequently makes the headlines of the daily press.
The trend was quite clear almost three years ago when we wrote The Permanent War Economy Under Eisenhower in the March–April 1953 issue of The New International. On the subject of the parity ratio we had this to say at that time:
The parity ratio, comparing prices received and paid by farmers, shows a perceptible decline during 1952. The figure was 105 in January 1952, but declined almost 10 per cent to 95 in January 1953. Since the parity ratio is based on average prices received and paid by farmers in the period 1910–1914, which was a rather good period for American farmers, a parity ratio below 100 does not indicate that farmers are starving. But a decline of 10 per cent in a year is precipitous, and when the parity ratio goes below 100 (which it did beginning November) political storms start brewing in the Congressional farm bloc.
The latest figure available for November 1955 shows that the parity ratio has declined to 81. In November 1954 the parity ratio was 87. For three years the parity ratio has declined from 100 to 81 – a decline of 19 per cent, or better than an average of six per cent annually.
This steady persistent decline in the parity ratio merely reflects the deepening agricultural crisis. It takes place because agriculture is the classic case where capitalist production quickly outruns available markets. It is taking plate, moreover, at a time when American imperialism is seeking to prevent the crisis in consumer goods from deepening and paralleling that in agriculture.
Hence, there is a frantic search for export markets for the products of American industry. American capital investment abroad has doubled in the postwar period, private investments abroad reaching about 326.5 billion at the end of 1954.
Of course, to the extent that American capitalism succeeds in alleviating the developing crisis in consumer durable goods by increasing the export markets for these products, to that extent will it aggravate the agricultural crisis. For in most cases the only manner in which these countries of the Western Hemisphere and western Europe can pay for the industrial products of America is through raw materials and agricultural products.
The tremendous increase in the output of farm products is a result of the application on a constantly expanding scale of large-scale capitalist methods of production to farming. All kinds of new agricultural implements and labor-saving devices have been developed and produced, so that with a constantly falling farm population it has been possible steadily to increase the output of agricultural products.
The process of government intervention has not ceased under the Eisenhower Administration. According to The New York Times of January 11, 1956:
“The Agricultural Department reported today that the Government’s investment in price- supported farm products amounted to $8,206,826,000 on Nov. 30.
“This was an increase of $1,316,809,000 from Nov. 30, 1954, when the investment stood at $6,890,017,000.”
In other words, during the past year there has been an increase of almost 20 per cent in the government’s investment in price-supported farm products – at a time when the parity ratio has declined another six points.
It is only natural, therefore, that the farm problem is of sufficient magnitude to occasion a special presidential message – particularly since 1956 is a presidential election year. This message was delivered by Eisenhower on January 9. Its major feature is the establishment of what is euphemistically called a “soil bank.” This means that farmers will be paid in cash or surplus commodities for withdrawing surplus producing land and putting it into soil-saving crops. Producers of cotton, wheat, corn and rice will be paid in cash or in kind from government stocks for reducing acres already allotted to them under federal controls. Cash will also be paid to farmers who devote their acreage to the so-called soil-building crops.
How this tepid proposal is to solve the agricultural crisis – assuming that it will be approved by the Congress, which is a large assumption indeed – is not at all clear, not even to the proponents of the proposal. It is both ironic and significant that the only person of any note to praise the program enthusiastically was Henry Wallace, former Secretary of Agriculture under Roosevelt, under whose auspices the AAA developed the classic capitalist theory of paying farmers to plow under every third row of cotton and wheat during the depths of the depression.
In the agricultural crisis there has existed for decades one of the truly fundamental contradictions of American capitalism – for which there is and can be no solution under capitalism. It is theoretically possible for the American bourgeoisie to discuss a solution comparable to that which the British bourgeoisie instituted over a century ago with the repeal of the Corn Laws, whereby British farming was abandoned to its fate and British capitalists permitted their customers in other lands who were buying their industrial exports to pay for them through agricultural imports into Britain. While a comparable program might be considered to be the goal of certain sections of the American bourgeoisie, it is clearly too risky in this day and age when a world war can easily become a fact of political life. In fact, it is easy for the opponents of any such plan to argue that the abandonment of the American farmer to the tender mercies of unbridled competition would merely encourage Stalinist imperialism to unleash World War III.
Thus the only thing that happens to the agricultural crisis is that it gets worse, and as it gets worse it has profound political repercussions and ultimately profound consequences on the entire economy. It is the agricultural crisis that provides the general background and setting for the developing crisis in consumer durables, both of which make it clear that to talk of permanent prosperity under capitalism is just so much poppycock.
DOES THIS MEAN THAT A LARGE-SCALE depression in 1956 is a realistic possibility? Obviously not. There have been certain fundamental changes in the nature and functioning of capitalism, two of which must be singled out for comment at this time. One of them has to do with the so-called built-in stabilizers, unemployment insurance, etc., constantly referred to by the advocates of the “permanent peace and prosperity” school. These are real and they do help to introduce an element of a sort of planning, which certainly prevents any rapid downward tobogganing of the various economic indexes. As unemployment develops, for example, it does not have precisely the same cumulative depressing effect on the markets for food, clothing and other basic economic necessities as formerly. The ability to manipulate tax rates likewise is a stabilizing element which should not be minimized. Since the recent boom has to a large extent been supported by the phenomenal accumulation of capital in the form of vast expansion in plant and equipment, it is not too much to say that the new tax law, with its new provisions for rapid depreciation, has played a great role in encouraging accumulation of capital.
Business borrowing has increased substantially, causing the government to raise the Federal Reserve discount rate to 214 per cent, a 20-year high. Interest rates in general have been rising. Bank loans increased about $3 billion during 1955, an increase of 16 per cent above the 1954 figure.
One of the interesting aspects of the boom in accumulation of capital is that it has largely been financed out of profits and surplus values accumulated in past periods. As The New York Times of January 8, 1956, puts it:
A detailed breakdown of long-term corporate financing in 1955 shows another striking phenomenon. Despite the sharp rise in business activity, external financing – raising funds from outside sources – did not increase. It ran at about $6,000,000,000, the same or a slightly higher rate than in 1954.
It should not be forgotten, in passing, that the need for financing in 1955 was great indeed. Companies spent more than $24,000,000,000 on plant and equipment, some $2,000,000,000 more than in 1954.
So where did business get the needed funds? The bulk by far, came from its own inner resources – earnings and depreciation allowances.
Retained earnings in the first half of last year amounted to $4,700,000,000. On that basis, for the year as a whole they totaled well over $9,000,000,000. When the final figures are toted up, that will probably set a new high record.
And take depreciation allowances, a steadily increasing factor in meeting capital requirements. Last year they topped $14,500,000000, a jump of more than $1,500,000,000 above the 1954 level.
Depreciation has bulked ever larger in corporate financial plans for several reasons. For one thing, the pressure of competition has forced constant additions to plant and equipment. Gross depreciable capital assets of non-financial corporations have soared to an astronomical $302,000,000,000. The high volume of new expenditures in recent years has meant that, after allowance for write-offs on worn-out and obsolete facilities, gross assets have risen at an annual rate of $20,000,000,000.
Under a “straight-line” depreciation, this increase in assets would boost depreciation allowances by more than $750,000,000 a year. The actual increase, however, has been substantially greater. From 1950 through 1954 and into 1955, for instance, the government’s fast amortization program allowed thousands of defense-supporting companies to write off their depreciation in five years. Facilities valued at more than $30,000,000,000 were granted this rapid write-off privilege.
The tax law of 1954 allowed all businesses to liberalize the basis on which they might depreciate capital assets acquired after January of that year. Previously, the straight-line method had required allowances to be spread evenly over the normal life of the asset; that might be twenty years or so. (Italics mine – T.N.V.)
There can be little doubt that the tax swindle law of 1954, the major accomplishment of the Eisenhower Administration, has contributed in no small way to the recent boom. The acceleration of the consumption of capital, however, does not in the long run eliminate the business cycle. If anything, it tends to aggravate the business cycle, for one must never forget that the basic law of motion of capitalist economy is Marx’s general law of capitalist accumulation: the greater the increase in capital accumulation, the greater the increase in the industrial reserve army.
We have analyzed for some years now, how the Permanent War Economy has tended to offset and to transform Marx’s general law of capitalist accumulation into one which reflects itself primarily in a relative decline in the standard of living of the working class. This, however, does not mean that the capitalist economy is either crisis-free or unemployment-free.
What these trends do, of course, is merely to reinforce a fundamental capitalist trend toward increasing monopoly. As Marx has pointed out, capitalism constantly strives in the direction of reaching the ultimate goal of one monopoly capitalist, but never, of course, quite reaches that exalted state of affairs.
In this connection it is interesting to note that now that the Democrats are in control of the committees of the Congress, the trend toward monopoly is receiving more publicity than previously. In a report published in The New York Times of December 27, 1955, we find that the sub-committee of the House Judiciary Committee investigating the question of monopoly – a committee headed by Representative Celler – agreed unanimously that “mergers were reaching a record for 25 years.” The Democrats, of course, blame the Republicans for this development, and the Republicans refuse to accept this responsibility.
According to this report, since January 1951 more than 3,000 companies in manufacturing, mining, trade and services have “disappeared in the swelling merger tide.”
It is true, of course, that the current wave of mergers is on an exceedingly large scale, and that it already has had the effect of confining the fantastic profits of the past few years to the largest corporations.
We must remember, however, in any analysis of the economy that these developments are taking place under a new stage of capitalism, one which we have described as the Permanent War Economy.
THE MAGNITUDE OF THIS THIRD SECTOR of the economy, i.e., outlays for the means of destruction as contrasted with outlays for the means of production or outlays for the means of consumption, is dramatically illustrated by a recent report of the Department of Defense, entitled Real and Personal Property as of December 31, 1954. We find that as of this date “the aggregate value of properties and inventories included in this report amounts to $123.9 billion for the Department of Defense.” This grand total is comprised of $34,082,000,000 for the Department of the Army; $56,428,000,000 for the Department of the Navy (including the Marine Corps); and $33,356,000,000 for the Department of the Air Force.
Major equipment in use for the entire armed forces totals $48,539,000,000, over 60 per cent of which belongs to the Navy. Equipment and supplies in the supply system account for a slightly larger figure, exceeding $50 billion, and more than $21 billion is in real property inventories, with almost $3 billion in machine tool inventories.
As The New York Times comments editorially on this report in its issue of October 31, 1955:
“An inventory of our national defense system brings up the astonishing figure of $124 billion as the current level of our military assets. This, of course, is still not the total figure. It does not include the atomic energy establishments, nor by any means all of the military materials now in use.”
It is, however, a staggering figure and the question logically arises, suppose that the Permanent War Economy did not exist and that instead of $124 billion of real and personal property belonging to the Department of Defense, the figure were only 10 per cent of this amount, what then? So far as the business cycle is concerned, the postwar prosperity would have ended quite some time ago.
It is worth trying to get some perspective on the extent of the military establishment and the nature of the investment that comprises the third sector of the economy, outlays for the means of destruction.
We find, for example, the extent of the acreage controlled is vast. To quote the report:
“The Department of Defense through the three military departments controlled a total of 29.4 million acres of land throughout the world on 1 January, 1955. This included land owned, leased, used on temporary permit, and various occupancy rights.”
In the United States alone, the acreage controlled totaled 24,172,739 acres, costing the government over $17.5 billion and representing about 37,800 square miles, equivalent to 1.3 per cent of total land area in continental United States.
The almost $3 billion inventory of machine tools, which admittedly is far from a complete tally, represents 2,494,363 metal cutting tools and 388,768 metal forming tools. If the military establishments had ordered only, say, 10 per cent of this quantity, what would be the situation in the machine tool industries today? Much the same question can be asked with reference to the more than $50 billion in inventories in the supply system throughout the entire armed forces.
The size and extent of the military establishment of American capitalist imperialism is so vast that it is difficult to appreciate its precise economic and political weight. The virtual interlocking directorate that has been established between the leaders of big business and the leaders of the military establishment is, however, a fact. It could not exist without the development of the Permanent War Economy and its mere existence and continuation have caused a qualitative change in the nature and functioning of the business cycle.
Of course, the direct investment in the establishments of the Department of Defense is not the sole measure of the importance of war outlays in the total economy. To this must be added the expenditures that are made for foreign aid, both military assistance and economic and technical assistance.
In a very interesting article in The New York Times of December 1, 1955, James Reston analyzes the dispute that has taken place between the advocates of a flexible and limited program and the advocates of a permanent commitment to this type of program.
As Reston puts it, the “Young Turks” (represented by such stalwart Eisenhower Republicans as Stassen, Nelson Rockefeller and Nixon):
“... are enthusiastic about the foreign aid program, want it to be larger, think it is a good thing in itself, good for the United States, and good for the development of a healthy world economy, which helps the United States.” (My italics – T.N.V.)
In the course of this article Reston supplies some convenient summary figures on the expenditures for foreign aid, as follows:
Expenditures for Foreign Aid
(in millions of dollars)
Fiscal
Year
Economic and
Military
Assistance
Technical
Assistance
Total
1950
$51.5
$3,437.2
$3,488.7
1951
933.6
2,802.2
3,735.8
1952
2,384.4
2,147.8
4,532.2
1953
3,956.1
1,766.6
5,722.7
1954
3,627.1
1,246.9
4,874.0
1955
2,292.6
1,973.1
4,265.7
1956 (projected)
2,585.8
1,801.4
4,387.2
Total
$15,831.1
$15,175.2
$31,006.3
It will be seen that over $31 billion will have been spent for this purpose in a seven-year period. Again, we are dealing with a type of economic outlay which was unknown before the advent of the Permanent War Economy and one which is quantitatively not insignificant – either in its economic or political impact.
THE ESTABLISHMENT OF PRODUCTION OF means of destruction as a significant sector of the economy, both quantitatively and qualitatively, has necessarily altered many of the fundamental laws of motion of capitalism. It has not, however, transformed capitalism into a system capable of producing permanent peace and prosperity. It has not eliminated the class struggle either nationally or internationally. It has not eliminated the need for a socialist organization of society. On the contrary.
Despite the inflationary boom that has taken place during the past 18 months or so – let us admit that its size and extent have amazed us at least as much as it has amazed the leaders of the bourgeoisie – the process of atrophy that we have described repeatedly during the past several years remains at work.
Government intervention in its manifold forms may possibly reduce what otherwise would perhaps be a level of unemployment of 10 million to one of 5 million (in a period of recession under the Permanent War Economy, which is in the process of developing) but it is entirely possible that the political impact of an unemployment level of five million in an economy so highly geared as the present, may have far more serious consequences for the class struggle than 10 million did in the 1930s.
To put the matter another way, when the ratio of war outlays to total production declines, we find that the hypodermic effect of these injections into the economy is considerably more weakened than the mere recital of the figures would lend one to believe. It is, to use the metaphor of the drug addict, a case where a constantly increasing dosage is required to achieve the same effect, so that when a period arrives when the dosage is decreased the effects on the patient are startling.
To say that the recent boom has been purely a peacetime boom, without benefit of war outlays, as do many of the advocates of the “permanent peace and prosperity” school, is to fly in the face of facts. The ratio of war outlays to total production has undoubtedly declined somewhat in the last few years (the detailed computations and their analysis must await another article) but they still remain well above the 10 per cent level which we originally established as the significant dividing line.
A precarious economic equilibrium has been achieved both domestically and internationally. The extent of the precariousness is about to be revealed. Despite the very sizable production increases of the past 18 months, factory employment is still below 1953’s highs, thereby revealing that the boomlets must necessarily be shortlived.
Had not the Korean war intervened, the present measures of state intervention would long ago have been revealed as inadequate to achieve any type of capitalist stabilization. The forces of production are on the verge of breaking through their capitalist integument. The development of atomic power will require socialism. That is the true measure of the profound social crisis that exists in a very real sense throughout capitalist society today. That is why this feeling of malaise penetrates all sections of the bourgeoisie from the most prosperous to the least. They know that this prosperity is, above all, temporary.
The precarious equilibrium of the domestic economy, in turn, rests upon an equally precarious international equilibrium. So long as this relative balance of forces is maintained between Stalinist and American imperialism, and so long as the fear of total destruction operates to restrain an immediate resort to military adventures, the precarious equilibria, both internationally and domestically, can continue. This, however, is clearly a very limited situation.
An interesting document in this connection is a study prepared for the Joint Committee on the Economic Report by the Legislative Reference Service of the Library of Congress. It is entitled, Trends In Economic Growth, A Comparison of the Western Powers and the Soviet Bloc, and was published in 1955.
It is not necessary to go beyond two of the important conclusions to realize that the international equilibrium is indeed temporary and precarious.
In connection with power, which after all is crucial, the report states: “Atomic power, if it were to be systematically developed by either Western Europe or the Soviet Bloc at relatively low cost, could alter the economic balance between the two areas quickly.” Since both sides are feverishly straining to develop atomic power, how long will it be before one or the other succeeds in obtaining this relative advantage which would immediately upset the precarious equilibrium?
So far as the growth of the respective economies is concerned, the report states that:
“In the period 1938–1953, as a whole, the national product of the United States increased about three times as rapidly as that of independent Europe, and almost twice as rapidly as that of the Soviet Union. To a substantial degree, this difference reflects the varying effects of World War II. Between 1948 and 1953 the national product of the United States grew not quite 30 per cent faster than that of independent Europe and only two-thirds as fast as that of the Soviet Union.” (My italics – T.N.V.)
In other words, in the real postwar period the economy of the Soviet Union has been outstripping that of the United States in a ratio of 3 to 2.
No wonder the inheritors of Stalin’s empire prefer a period of “competitive coexistence,” for even if we assume that American output today, and the strength of America and its allies in general, is twice that of the Soviet Union, or of the Soviet Union and its allies, it would take less than 10 years – assuming that the Soviet Union maintains its relative advantage of an annual increase that exceeds that of the United States by a ratio of 3 to 2 for the Russian economy to surpass that of the United States. At the present respective rates of increase, even without the inevitable recession in the United States, it would take less than a decade for the balance of power to be radically altered.
Once the precarious international equilibrium is basically changed, then the domestic equilibrium, if it has not already been upset, will surely be destroyed.
It is entirely possible that the productivity of labor under Stalinism does not have to equal the productivity of labor under capitalism before the former has achieved military-economic supremacy over the latter. We do not, however, have to speculate about these matters. It is sufficient merely to postulate that the international equilibrium is precarious and necessarily short-lived. This, whether they admit it or not, destroys a fundamental postulate of the advocates of the “permanent peace and prosperity” school, for what they are really saying is that internationally the power blocs constituting Stalinist imperialism on the one hand, and American and allied imperialism on the other hand, can continue indefinitely their huge level of armaments.
It is true, of course, that both Stalinism and capitalism require each other in order to exist. This is one of the paradoxes and contradictions of the present world situation. While the prospects of a resolution of this cosmic paradox may not seem too bright at this time, that they should not cause any elation in the camp of the “permanent peace and prosperity” school. There is no peace. And the prosperity of American capitalism is built on quicksand, as the future will demonstrate.
January 1956
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<h2>Frank Demby</h2>
<h1>Defense Housing Crisis Grows Acute</h1>
<h4>Workers Forced to Live in Dingy Homes</h4>
<h3>(December 1941)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_50" target="new">Vol. 5 No. 50</a>, 15 December 1941, p. 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">The defense housing crisis is coming to a head. Newspapers are running articles on the situation; Congress has appointed committees of investigation. Within a few months the lid threatens to blow off on the biggest scandal since Teapot Dome. As an example of how serious the situation has become, it has been reliably reported in the capitalist press this past week that in one town in Connecticut where a lot of war factories are located over 700 children were found locked in automobiles or miserable shacks while their parents were working at jobs in nearby defense plants.</p>
<p>The background of the housing crisis is quite clear. For more than a decade, as depression took its deadly toll, the housing shortage has grown worse and worse. Private construction of homes and apartments dwindled to virtually zero. Government efforts at low-cost housing projects and slum clearance were confined to a few large cities, were far from low-cost and represented a feeble drop in the bucket. The estimate made several years ago that one-third of the nation is ill-housed is extremely conservative.<br>
</p>
<h4>Workers Drift to Defense Centers</h4>
<p class="fst">Then, as billions of dollars were spent for war orders, mostly concentrated in a handful of cities, workers began to drift in from all parts of the country to these few defense centers. The existing housing shortage in such towns was accentuated a thousandfold. Trailer camps, miserable shacks and hovels, sprang up like mushrooms after a rain on the outskirts of a score of cities. Rents boomed sky-high as the landlord’s and real estate interests took advantage of the tremendous demand for living quarters. Charles Abrams, of the <strong>New York Post</strong>, summarizes the effect of the housing crisis as follows:</p>
<p class="quoteb">“<em>Today workers, unable to find quarters, are leaving their jobs in defense centers all over the country. Labor turnover exceeds 500 per cent in some vital areas. Skilled craftsmen in pivotal trades refuse to migrate because they might have to give half of their wages to landlords. Inefficiency, disaffection, work stoppages due to poor housing are already in evidence.”</em></p>
<p class="fst">The government’s handling of this situation is a monumental example of capitalist inefficiency, duplicity and downright skullduggery. It was admitted that there was a need for the construction of 525,000 homes this year in defense areas. Private industry obviously could not be relied upon to build homes for the vast majority of workers who earn less than $2,000 a year; for private industry will naturally only build homes if there is a profit in it – and there cannot be any profit in building homes for workers who get $30–$40 a week. Consequently, the government undertook the responsibility for constructing 70 per cent of these needed homes, or about 360,000 houses. Of this number, only 10 per cent has so far been built!<br>
</p>
<h4>Too Many Fingers in the Pie</h4>
<p class="fst">At the beginning of the armament program, the only real housing machinery in existence was the United States Housing Authority, which possessed 600 local branches spread over 38 states. But the USHA was not used at all in 1940 and is only partially used now. There are a dozen different agencies of the government which have their collective fingers in the housing pie. The Public Building Administration, the Division of Defense Housing, the Defense Homes Corporation are some of the more prominent examples of bureaucratic duplication. In addition, the Army, the Navy and the Farm Security Administration also managed to horn in on the housing pie.</p>
<p>Having tied itself up in a maze of red tape, the government tried to ease matters a bit by appointing Charles Palmer as Defense Housing Coordinator. Palmer, however, hasn’t done any coordinating at all. All he has done is to fight with the other two big-shots of the housing program, Nathan Straus, USHA Administrator, and John Carmody, Federal Works Administrator, who controls the Division of Defense Housing. Besides these eternal scraps, in which each accuses the other of incompetence and of sabotaging the defense program, Palmer’s main activity is seeing to it that as few government homes as possible are built. Palmer is typical of most of the officials in the “defense” program. He is a firm believer in private enterprise and doesn’t want to undermine it, even if this means that defense workers go without homes or live in slums.</p>
<p>Palmer, it must be emphasized, is President Roosevelt’s man, appointed directly by the President to the top position in the housing pyramid. His credo is “business as usual,” which phrase, given its proper translation, means “profits for the bosses.” In spite of his support of the system of “free, private enterprise,” Palmer is accused publicly by Carmody and others of being a dictator. Straus blames him for sponsoring “the most vicious piece of legislation that has been enacted in the field of housing, under the spur and drive of selfish private interests.” Needless to say, Palmer is aided and abetted in his work by the dollar-a-year OPM representatives of monopoly capital, who have needlessly placed priorities on building materials. This has forced up the price of building materials, with a consequent rise in rents and the price of homes. It has also resulted in some very fancy speculative activities in the construction field.<br>
</p>
<h4>A Vicious Piece of Legislation</h4>
<p class="fst">The legislation to which Straus referred is, indeed, one of the most vicious laws ever to come out of a servile Congress. It is known as the Lanham Act The ostensible purpose, of course, was to encourage housing. It permits the Federal Housing Authority to guarantee 90 per cent of builders’ mortgages on houses put up for defense workers. The effect of this provision has been to saddle workers with homes that they cannot possibly afford to keep. The workers are forced to buy them, even though they don’t want to, by being given the choice of being without a roof over their heads or buying these homes. In all such transactions, the builders and the bankers, who finance these homes, are given 100 per cent protection against any possible loss. The workers, of course, get no protection at all. Moreover, these are hardly low-cost affairs. The worker usually has to put down a payment of $100. His monthly payments, which take the place of rent, come to almost $60; when interest and taxes are included. To be able to afford such payments, a family should have a yearly income of close to $4,000 a year. Most of the workers who are forced to buy them, however, make half of this sum or less.</p>
<p>Another provision of the Lanham Act, which is equally vicious in this application, is the appropriation of funds to the Federal Works Administrator for defense housing, provided that building costs are not over an <em>average</em> of $3,500 per family. The maximum on any housing unit is set at $3,950 under this provision. Since it is virtually impossible to figure “average” costs in advance of construction, specifications are cut down to levels below minimum health standards. The net result is that in many cases the government is actually building slum houses for many defense workers.<br>
</p>
<h4>And a Lot of Plain Graft</h4>
<p class="fst">On top of these difficulties and abuses, there is obviously a considerable amount of plain, ordinary graft taking place. In some cases, sites for housing projects are located in swamps or places where sewage is disposed of. Local authorities are incensed in many cities over the fact that the federal agencies do not deem it necessary to consult local officials about the housing projects.</p>
<p>What the situation boils down to is that private industry cannot possibly build adequate homes for American workers. It is estimated that there is a real need for at least 12,000,000 housing units in this country today, for it should be obvious that it is not only the defense workers who need decent homes, but practically all workers. Unless the government immediately appropriates several billion dollars for real, low-cost housing projects (not the measly $300,000,000 that is being recommended) the overwhelming majority of workers will find that the “defense of democracy” means living in sub-standard dwellings. Democracy, it should be obvious, cannot thrive on slums which are injurious to the health.</p>
<p><strong>Labor Action</strong> is anxious to expose the whole rotten mess of the housing scandal. Only the fresh air of truth and vigorous protests can get decent housing for the mass of Americans. We should appreciate it if any of our readers who have reliable information concerning the housing situation – any data on rents, etc. – would send it to us. We promise to give it prompt publicity.</p>
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Frank Demby
Defense Housing Crisis Grows Acute
Workers Forced to Live in Dingy Homes
(December 1941)
From Labor Action, Vol. 5 No. 50, 15 December 1941, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The defense housing crisis is coming to a head. Newspapers are running articles on the situation; Congress has appointed committees of investigation. Within a few months the lid threatens to blow off on the biggest scandal since Teapot Dome. As an example of how serious the situation has become, it has been reliably reported in the capitalist press this past week that in one town in Connecticut where a lot of war factories are located over 700 children were found locked in automobiles or miserable shacks while their parents were working at jobs in nearby defense plants.
The background of the housing crisis is quite clear. For more than a decade, as depression took its deadly toll, the housing shortage has grown worse and worse. Private construction of homes and apartments dwindled to virtually zero. Government efforts at low-cost housing projects and slum clearance were confined to a few large cities, were far from low-cost and represented a feeble drop in the bucket. The estimate made several years ago that one-third of the nation is ill-housed is extremely conservative.
Workers Drift to Defense Centers
Then, as billions of dollars were spent for war orders, mostly concentrated in a handful of cities, workers began to drift in from all parts of the country to these few defense centers. The existing housing shortage in such towns was accentuated a thousandfold. Trailer camps, miserable shacks and hovels, sprang up like mushrooms after a rain on the outskirts of a score of cities. Rents boomed sky-high as the landlord’s and real estate interests took advantage of the tremendous demand for living quarters. Charles Abrams, of the New York Post, summarizes the effect of the housing crisis as follows:
“Today workers, unable to find quarters, are leaving their jobs in defense centers all over the country. Labor turnover exceeds 500 per cent in some vital areas. Skilled craftsmen in pivotal trades refuse to migrate because they might have to give half of their wages to landlords. Inefficiency, disaffection, work stoppages due to poor housing are already in evidence.”
The government’s handling of this situation is a monumental example of capitalist inefficiency, duplicity and downright skullduggery. It was admitted that there was a need for the construction of 525,000 homes this year in defense areas. Private industry obviously could not be relied upon to build homes for the vast majority of workers who earn less than $2,000 a year; for private industry will naturally only build homes if there is a profit in it – and there cannot be any profit in building homes for workers who get $30–$40 a week. Consequently, the government undertook the responsibility for constructing 70 per cent of these needed homes, or about 360,000 houses. Of this number, only 10 per cent has so far been built!
Too Many Fingers in the Pie
At the beginning of the armament program, the only real housing machinery in existence was the United States Housing Authority, which possessed 600 local branches spread over 38 states. But the USHA was not used at all in 1940 and is only partially used now. There are a dozen different agencies of the government which have their collective fingers in the housing pie. The Public Building Administration, the Division of Defense Housing, the Defense Homes Corporation are some of the more prominent examples of bureaucratic duplication. In addition, the Army, the Navy and the Farm Security Administration also managed to horn in on the housing pie.
Having tied itself up in a maze of red tape, the government tried to ease matters a bit by appointing Charles Palmer as Defense Housing Coordinator. Palmer, however, hasn’t done any coordinating at all. All he has done is to fight with the other two big-shots of the housing program, Nathan Straus, USHA Administrator, and John Carmody, Federal Works Administrator, who controls the Division of Defense Housing. Besides these eternal scraps, in which each accuses the other of incompetence and of sabotaging the defense program, Palmer’s main activity is seeing to it that as few government homes as possible are built. Palmer is typical of most of the officials in the “defense” program. He is a firm believer in private enterprise and doesn’t want to undermine it, even if this means that defense workers go without homes or live in slums.
Palmer, it must be emphasized, is President Roosevelt’s man, appointed directly by the President to the top position in the housing pyramid. His credo is “business as usual,” which phrase, given its proper translation, means “profits for the bosses.” In spite of his support of the system of “free, private enterprise,” Palmer is accused publicly by Carmody and others of being a dictator. Straus blames him for sponsoring “the most vicious piece of legislation that has been enacted in the field of housing, under the spur and drive of selfish private interests.” Needless to say, Palmer is aided and abetted in his work by the dollar-a-year OPM representatives of monopoly capital, who have needlessly placed priorities on building materials. This has forced up the price of building materials, with a consequent rise in rents and the price of homes. It has also resulted in some very fancy speculative activities in the construction field.
A Vicious Piece of Legislation
The legislation to which Straus referred is, indeed, one of the most vicious laws ever to come out of a servile Congress. It is known as the Lanham Act The ostensible purpose, of course, was to encourage housing. It permits the Federal Housing Authority to guarantee 90 per cent of builders’ mortgages on houses put up for defense workers. The effect of this provision has been to saddle workers with homes that they cannot possibly afford to keep. The workers are forced to buy them, even though they don’t want to, by being given the choice of being without a roof over their heads or buying these homes. In all such transactions, the builders and the bankers, who finance these homes, are given 100 per cent protection against any possible loss. The workers, of course, get no protection at all. Moreover, these are hardly low-cost affairs. The worker usually has to put down a payment of $100. His monthly payments, which take the place of rent, come to almost $60; when interest and taxes are included. To be able to afford such payments, a family should have a yearly income of close to $4,000 a year. Most of the workers who are forced to buy them, however, make half of this sum or less.
Another provision of the Lanham Act, which is equally vicious in this application, is the appropriation of funds to the Federal Works Administrator for defense housing, provided that building costs are not over an average of $3,500 per family. The maximum on any housing unit is set at $3,950 under this provision. Since it is virtually impossible to figure “average” costs in advance of construction, specifications are cut down to levels below minimum health standards. The net result is that in many cases the government is actually building slum houses for many defense workers.
And a Lot of Plain Graft
On top of these difficulties and abuses, there is obviously a considerable amount of plain, ordinary graft taking place. In some cases, sites for housing projects are located in swamps or places where sewage is disposed of. Local authorities are incensed in many cities over the fact that the federal agencies do not deem it necessary to consult local officials about the housing projects.
What the situation boils down to is that private industry cannot possibly build adequate homes for American workers. It is estimated that there is a real need for at least 12,000,000 housing units in this country today, for it should be obvious that it is not only the defense workers who need decent homes, but practically all workers. Unless the government immediately appropriates several billion dollars for real, low-cost housing projects (not the measly $300,000,000 that is being recommended) the overwhelming majority of workers will find that the “defense of democracy” means living in sub-standard dwellings. Democracy, it should be obvious, cannot thrive on slums which are injurious to the health.
Labor Action is anxious to expose the whole rotten mess of the housing scandal. Only the fresh air of truth and vigorous protests can get decent housing for the mass of Americans. We should appreciate it if any of our readers who have reliable information concerning the housing situation – any data on rents, etc. – would send it to us. We promise to give it prompt publicity.
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<h2>T.N. Vance</h2>
<h1>The Permanent War Economy<br>
Under Eisenhower</h1>
<h4>An Analysis of Economic Trends in 1953</h4>
<h3>(April 1953)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni53_03" target="new">Vol. XIX No. 2</a>, March–April 1953, pp. 89–99.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<br>
<p class="fst">The Stalinist “peace offensive” has been a long time in coming, but it was inevitable so long as the military stalemate continued in Korea. Stalin’s death may have accelerated the new Kremlin line, although there is considerable evidence that the basic strategy and major tactics of the “peace offensive” were worked out under Stalin’s personal leadership during the past six months. Stalin’s heirs may require time to work out and consolidate the succession. They may also wish to take precautions against any bold foray by the advocates of “preventive war” in Washington; and in an atmosphere of “peace” counsels of military attack are not likely to make much of an impression. Above all, however, they must figure on the “peace offensive” strengthening already apparent deflationary tendencies in the American economy.</p>
<p>Initial reactions in the United States show that the Kremlin’s strategists have not entirely miscalculated. A front-page article on April 8 by ace political reporter of the <strong>New York Times</strong>, James Reston, is headlined, <em>Soviet Tactics Give U.S. Problem of Avoiding Slump if Peace Comes</em>. The dependence of American prosperity on war outlays is expressed by Reston in these words:</p>
<p class="quoteb">“So long as the Kremlin was waging war in Asia and crying havoc all over the world, the Western nations were able to achieve full employment at home and at least a measure of unity with each other.”</p>
<p class="fst">After pointing out that a host of problems in the field of foreign policy are pressing for solution, Reston goes on to state:</p>
<p class="quoteb">The drop in stock market prices immediately after the red doves were sent aloft in Moscow was another reminder to the Administration that the pace of its planning in the domestic economic field was also running behind the pace of world events.</p>
<p class="quote">Labor union leaders, concerned about the talk here of cutting the defense budget, already have started appealing to the President to plan at once for the day when the vast Government orders for munitions will drop off. This same thesis is being heard within the President’s official family, particularly from those officials who have been studying the meaning of the recent Soviet moves.</p>
<p class="quote">These officials see increasing evidence of an internal struggle for power in Moscow. They believe that, for the time being, the Soviet leaders may want to relax the tension in the world so that they can deal with these internal problems. But the observers think that at the same time the Soviet hierarchy is trying to bring the United States up against the major problem of keeping its people employed when it shifts to a modified peace economy.</p>
<p class="quote">In the Soviet mind, the capitalist world cannot close the gap between its production and consumption without vast expenditures for war. The Russians insist on believing that Americans have learned nothing about distribution in the last fifty years and that the only answer to unemployment here is to create international crises that put men to work in the munitions factories.</p>
<p class="fst">Even more forthright is Arthur Krock, in his column in the <strong>New York Times</strong> of April 5:</p>
<p class="quoteb">Though tragic is the jest that what officials fear more than dateless war in Korea is peace, the jest has a real foundation. The vision of peace which could lure the free world into letting down its guard, and demolishing the slow and costly process of building collective security in western Europe while the Soviets maintained and increased their military power, is enough to make men in office indecisive. <em>And the stock market selling that followed the sudden conciliatory overtures from the Kremlin supports the thesis that immediate prosperity in this country is linked to a war economy and suggests desperate economic problems that may arise on the home front.</em> (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The possibility, even the probability, of a major change in the political and economic climate serves as an opportunity to review some of the major trends in the Permanent War Economy and to focus attention on some neglected aspects that are not without importance. First, however, it is instructive to recall the so-called “Varga controversy” that disturbed Stalinist circles in 1947. It will be recalled that virtually all Stalinist theoreticians took the position that there would be an immediate capitalist collapse following the cessation of military hostilities. Varga, however, disagreed. He maintained that there would be a short period of capitalist prosperity before any crisis developed. The dispute was important not only for its substantive features, but because it is alleged that Varga’s political mentor was Malenkov.</p>
<p>According to the authors of one of the reports of a Zhdanov-Malenkov faction fight, Zhdanov was the “internationalist,” basing his “revolutionary offensive” on the prospect of postwar depression in the capitalist world. Malenkov, however, is supposed to have been the “nationalist,” advocating concentration on Stalinland’s internal problems. Varga’s views were supposed to have been anathema to Zhdanov and to have been welcomed by Malenkov. When Varga was disgraced, it was presumably evidence that Zhdanov had the upper hand in his struggle with Malenkov. Why, then, Varga waited until 1949, after Zhdanov’s death in 1948, to recant is not at all clear. Be that as it may, if Varga played such an important role in the struggle for Stalin’s mantle, he has presumably been installed as number one economic advisor to the Kremlin now that Malenkov is premier. Thus reasons the “cloak-and-dagger” school of interpreting Kremlin actions, of which there are many and varied exponents in this country.</p>
<p>Regardless of whether Varga’s views were or are of political importance in helping to determine Kremlin policy, he has been the leading Stalinist economist and a summary of his views may well be instructive in providing some insight into the motivation for the Kremlin’s “peace offensive.” An article by Evsey D. Domar, associate professor of political economy at The Johns Hopkins University, in the March 1950 issue of the <strong>American Economic Review</strong>, entitled <em>The Varga Controversy</em>, summarizes the essence of Varga’s predictions (published in September 1946), as:</p>
<ol>
<li>During the first decade after the war economic conditions will be a natural aftermath of the war itself.<br>
</li>
<li>The impoverished countries of Europe and Asia will suffer throughout the period from what he calls a “crisis of underproduction.”<br>
</li>
<li>The United States, Canada and other countries whose productive capacities were greatly increased during the war will enjoy a short, two-to-three-year prosperity after its end.<br>
</li>
<li>This short prosperity will be followed by a sharp crisis of overproduction, probably more prolonged than that of 1920–21.<br>
</li>
<li>When this crisis has been overcome, a new industrial cycle will begin. It will be not of the 1921–29, but of the 1929–37, type; i.e., <em>its recovery will be incomplete. In its background there will be a sharp and prolonged agrarian crisis.</em> (Italics mine – <em>T.N.V.</em>)</li>
</ol>
<p class="fst">The above analysis conforms rather well to actual events, if one assumes that the outbreak of the Korean war prevented the “recession” of 1949–50 from developing into “a sharp crisis of overproduction.” Actually, of course, neither Varga nor any other Stalinist foresaw the development of the Permanent War Economy, but Varga’s expectations of “a sharp and prolonged agrarian crisis” are prescient. For the agricultural crisis has already started, as the Republicans are beginning to discover.</p>
<p>While the news of surplus butter, and threatened surpluses in wheat, cotton, tobacco, etc., is more dramatic, any Kremlin analyst working on trends in the American economy would be able to point up a number of significant developments indicating that a downswing in the economic cycle is at hand:</p>
<ol>
<li>The raising of the rate of interest. The Federal Reserve rediscount rate has been raised from one and three-quarter per cent to two per cent. This has the effect of reducing business loans by commercial banks and raising the bank rate. The Eisenhower Administration has also raised the interest rate on long-term (thirty-year) bonds to 314 per cent, the impact of which will reinforce the tendencies already at work to raise the average rate of interest throughout the economy. A rise in the average late of interest is normally deflationary; in fact, it is because of a mistaken fear of further inflation that the Eisenhower Administration has admittedly used state power to bring about a rise in the rate of interest.<br>
</li>
<li>The falling backlog of orders in the machine tool industry. This was already evident at the end of last year, for the <strong>Wall Street Journal</strong> in its edition of December 29, 1952 was able to write:</li>
</ol>
<p class="quoteb">“The heyday of new defense business for machine tool builders is about running out, at least for the time being. This is in marked contrast to the deluge of orders that poured in a year ago on an industry struggling feverishly to expand production ... Backlogs, meantime, continue to be further reduced as rated productive capacity goes up and new business falls off. The industry now has enough business on its books to keep it working at capacity for 11 months, compared with about 18 months at the start of 1952. However, the backlogs are not evenly distributed. Only about one-fourth of the industry can boast a six-month-or-more backlog. Included in the remainder, in fact, are many companies looking for business.”</p>
<blockquote>
<blockquote>
<p>And the machine tool industry, of course, is the prime mover in the production of means of production.</p>
</blockquote>
</blockquote>
<ol start="3">
<li>The slight, but steady, decline in wholesale prices. The wholesale price index for all commodities of the Department of Labor (which has a base of 1947–1949 equal to 100) declined during 1952 from 113 in January to 109.6 in December. While this is a decline of only 3 per cent, it indicates that the period of acute inflation in the primary markets is passed. As a matter of fact, for several months now virtually every raw material has been in distinctly easy supply. The final evidence, of course, is the abandonment of the Controlled Materials Plan, revealing that there is an ample supply of basic metals. While the Eisenhower Administration boasts of decontrol as part of its philosophy, the truth of the matter is that the basic decontrol steps so far taken were planned under the Truman Administration.<br>
</li>
<li>The parity ratio, comparing prices received and paid by farmers, shows a perceptible decline during 1952. The figure was 105 in January 1952, but declined almost 10 per cent to 95 in January 1953. Since the parity ratio is based on average prices received and paid by farmers in the period 1910–1914, which was a rather good period for American farmers, a parity ratio below 100 does not indicate that farmers are starving. But a decline of 10 per cent in a year is precipitous, and when the parity ratio goes below 100 (which it did beginning November) political storms start brewing in the Congressional farm bloc.<br>
</li>
<li>The deflationary attitude of the Eisenhower Administration as contrasted with the inflationary outlook of the preceding Truman Administration. This manifests itself in various ways, notably in announced programs to reduce Federal expenditures, to stretch out the defense program over a longer period of years, while at the same time there is an apparent refusal to reduce taxes and strict admonishment about the dangers in the expansion of consumer credit. The Eisenhower Administration is believed to be not averse to a mild deflation and to an accompanying modest rise in unemployment.</li>
</ol>
<p class="fst">It is only natural, therefore, that the Kremlin should be aware of growing signs of a deflationary trend in the American economy and should seek to take advantage of them. If its “peace offensive” encourages a larger reduction in war outlays than already planned, the possibilities of American internal difficulties diverting attention from consolidation of alliances and strengthening the military position of American imperialism abroad are that much greater. Moreover, no careful analysis of the American economy is required to arrive at the conclusion that deflation is at hand. It is only necessary to read the public statements of responsible spokesmen of big business and organized labor.</p>
<p>For example, <strong>Fortune</strong> magazine in its March 1953 issue states:</p>
<p class="quoteb">A majority of U.S. businessmen expect some sort of decline in business activity in the next couple of years, according to a recent <strong>Journal of Commerce</strong> survey, as do a majority of economists and analysts of business. <strong>Fortune</strong> looks for a slight downturn as early as the second half of the year. But as for the larger and longer-term worries about recession or depression sometime in 1954 or 1955, we believe the readjustment is apt to be mild, if relatively prolonged.</p>
<p class="fst">After a discussion of semantics and defining a “readjustment” as a mild recession, <strong>Fortune</strong> takes an unusually forthright position (which accounts for this article being much quoted) by stating:</p>
<p class="quoteb">The present outlook is for “a mild but prolonged readjustment,” perhaps lasting a year and a half, because non-durable goods and services should grow as taxes come down (along with defense outlays), and because public works and exports should offset a decline in capital expenditures. This readjustment would wind up, according to <strong>Fortune</strong>’s “reasonable” projection of 1955, with G.N.P. and industrial output distinctly below prospective capacity and with <em>possibly five million unemployed.</em> (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Unemployment of five million would mean an increase of 200 per cent over present levels, and would undoubtedly pose serious problems. Such a prospect naturally concerns organized labor, particularly its more articulate sections such as the U.A.W. One can, for example, quote at great length from the report of President Walter P. Reuther to the 14th Constitutional Convention of the UAW, held at the end of March at Atlantic City. A 20-page section on <em>General Economic Conditions</em> begins by stating:</p>
<p class="quoteb">“The national economy is now headed for a long-postponed showdown with basic economic realities. Since 1939, when 9½ million unemployed walked the streets, there has been no real test of the stability of our economy. In all the years since, this country has not had to face up to the question of whether we can raise our living standards to match our power to produce, and then keep both rising together.”</p>
<p class="fst">After recounting the increase in productive capacity (“Manufacturing capacity increased by 31 per cent from 1939 to 1946 and by 55 per cent from 1946 to 1952”) and the enormous currently unsatisfied needs of the American working class, as well as reviewing in a comprehensive manner the basic trends within the economy, Reuther concludes with an impressive <em>non-sequitur</em> that “our economy [must] move rapidly forward to constantly improved living standards, or collapse in depression.”</p>
<p>One should not fall victim to one’s own propaganda. Everyone will agree that the constant improvement of living standards is a desirable goal, but the probability of such a development is rather small. In fact, under the Permanent War Economy it is impossible over any extended period of time. It does not, therefore, follow – as Reuther (and others) would have us believe – that the economy will “collapse in depression.” On the contrary, an understanding of the Permanent War Economy would reveal that a sizable depression is excluded. This does not mean that a downturn is impossible. We have shown in our original series of articles on the Permanent War Economy that “the changes [in the ratio of war outlays to total output] are rapid and qualitative in nature, which is another characteristic of the Permanent War Economy stage of capitalism. The figures suggest that about 10 per cent of total output must be spent in the form of war outlays before the latter become significant in their impact.” (<strong>The New International</strong>, <a href="../../1951/permwar/part1.htm" target="new">January–February</a>, 1951, p. 38)<br>
</p>
<p class="fst">ACTUALLY, WHAT HAS HAPPENED IS THAT the ratio of war outlays to total output is beginning to decline. This trend was already evident prior to the start of the new Stalinist “peace offensive.” It appears likely that it will become more pronounced in the near future. There is still no evidence, however, that capitalism intends to abandon the Permanent War Economy. Both political and economic considerations clearly exclude such a variant.</p>
<p>If we revert to the analogy of “habit-forming drugs,” used in the introduction to Part III of the series on the Permanent War Economy, <a href="../../1951/permwar/part3.htm" target="new"><em>Increasing State Intervention</em></a> (<em>cf.</em>
<strong>The New International</strong>, May–June 1951, p. 132), we can refer to the economy as a drug addict. War outlays are the drug which has sustained a high level of economic activity. As is apparently the case with pathological drug addicts, a constantly increasing dosage is required in order to maintain the same effects of activity as previously. The measurement of the “dosage” is the ratio of war outlays to total output. Even a stable ratio of war outlays leads to a process of atrophy setting in. The “appetite” of the economy for war outlays increases steadily. If the ratio of war outlays to total output, although significant, merely remains level, tendencies toward a slackening in activity begin to appear in various sectors. If, on top of this, an actual decline in the ratio of war outlays to total output is to be recorded, then deflationary consequences are unavoidable. How much deflation is, of course, another question. There can be deflation without depression, in any recognizable meaning of the term.</p>
<table width="450" cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td colspan="8">
<p class="smc"><strong>War Outlays, 1949–1952<br>
And Their Relationship to Total Output</strong><br>
(Figures in Billions)</p>
</td>
</tr>
<tr>
<td rowspan="2">
<p class="smc"><em>Year</em></p>
</td>
<td rowspan="2">
<p class="smc"> </p>
</td>
<td rowspan="2">
<p class="smc"><em>Net<br>
National<br>
Product<br>
(1)</em></p>
</td>
<td rowspan="2">
<p class="smc"> </p>
</td>
<td colspan="3">
<p class="smc"><em>WAR OUTLAYS</em></p>
</td>
<td rowspan="2">
<p class="smc"><em>Col. (4)<br>
as % of<br>
Col. (1)<br>
<br>
(5)</em></p>
</td>
</tr>
<tr>
<td>
<p class="smc"><em>Direct<br>
(2)</em></p>
</td>
<td>
<p class="smc"><em>Indirect<br>
(3)</em></p>
</td>
<td>
<p class="smc"><em>Total<br>
(4)</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1949</p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc">$238.9 </p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc">$13.6 </p>
</td>
<td>
<p class="smc">$13.7 </p>
</td>
<td>
<p class="smc">$27.3 </p>
</td>
<td>
<p class="smc"> 11.4%</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1950</p>
</td>
<td>
<p class="smc">262.6</p>
</td>
<td>
<p class="smc">14.2</p>
</td>
<td>
<p class="smc">11.7</p>
</td>
<td>
<p class="smc">25.9</p>
</td>
<td>
<p class="smc"> 9.9</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1951</p>
</td>
<td>
<p class="smc">304.6</p>
</td>
<td>
<p class="smc">33.7</p>
</td>
<td>
<p class="smc"> 9.3</p>
</td>
<td>
<p class="smc">43.0</p>
</td>
<td>
<p class="smc">14.1</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952*</p>
</td>
<td>
<p class="smc">320.4</p>
</td>
<td>
<p class="smc">46.0</p>
</td>
<td>
<p class="smc"> 8.8</p>
</td>
<td>
<p class="smc">54.8</p>
</td>
<td>
<p class="smc">17.1</p>
</td>
</tr>
<tr>
<td colspan="8">
<p class="smj">* Net national product is derived from gross national product for 1952, as shown in the March 1953 issue of the <strong>Survey of Current Business</strong>; war outlays are derived from the Commerce series on National Security, together with the Treasury series on National Defense and Related Activities. Our estimates, therefore, follow the procedure explained in the text and are dependent upon official government figures.</p>
</td>
</tr>
</tbody></table>
<p class="fst">Inasmuch as it is now more than two years since the basic calculations were made in the development of the theory of the Permanent War Economy, we can now substitute actuals for our estimates. This is done below for the period 1949–1952 inclusive.</p>
<p>Our concept of measuring the ratio of war outlays by comparing direct and indirect war outlays to net national product remains as heretofore stated. Our concepts of direct and indirect war outlays, however, have undergone some modification because in the interim Commerce has redefined and republished the Federal war component of Federal government purchases of goods and services. This has been in the form of a series entitled “national security,” which is broken down into “national defense” and “other national security.” The definitions, contained in the July 1952 issue of the <strong>Survey of Current Business</strong>, are:</p>
<p class="quoteb">“National defense purchases comprise the purchases of the Atomic Energy Commission, Defense Department, Maritime Administration (before 1950), National Advisory Committee for Aeronautics, and Selective Service System, together with purchases for the programs of defense production and economic stabilization, foreign military assistance administered by Mutual Security Agency (formerly Mutual Defense Assistance program), and the stockpiling of strategic and critical materials.”</p>
<p class="fst">This is a broader concept than we previously used, and involves shifting from indirect to direct war outlays such programs as atomic energy, foreign military assistance and military stockpiling. There can, however, be no objection to this revised definition of war outlays.</p>
<p>The “other national security” series of Commerce forms only one part of our concept of indirect war outlays, for it is defined as comprising those purchases of “the Maritime Administration (after 1949), National Security Council, National Security Resources Board, Philippine Damage Commission, and State Department, as well as purchases for the following foreign economic assistance programs: those now administered by the Mutual Security Agency, government and relief in occupied areas, India Emergency Food Aid, International Children’s Emergency Fund, and Yugoslav Emergency Relief Assistance." To this base, we have added purchases of the Veterans’ Administration, as well as certain minor governmental programs, as explained in Part I, p. 36 of the January–February 1951 issue of <strong>The New International</strong>.</p>
<p>The differences between our revised calculations and our earlier estimates may be seen by comparing the ratios of war outlays to total output, as follows:</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<th colspan="4">
<p class="smc">War Outlay Ratios</p>
</th>
</tr>
<tr>
<td>
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Revised</em></p>
</td>
<td rowspan="5">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Original*</em></p>
</td>
</tr>
<tr>
<td>
<p class="smc">1949</p>
</td>
<td>
<p class="smc"> 11.4%</p>
</td>
<td>
<p class="smc"> 10.60%</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1950</p>
</td>
<td>
<p class="smc"> 9.9</p>
</td>
<td>
<p class="smc">10.9</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1951</p>
</td>
<td>
<p class="smc">14.1</p>
</td>
<td>
<p class="smc">20.0</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1952</p>
</td>
<td>
<p class="smc">17.1</p>
</td>
<td>
<p class="smc">21.1</p>
</td>
</tr>
<tr>
<td colspan="4">
<p class="sm1">* Taken from Table B of <a href="../../1951/permwar/part1.htm" target="new">Part I</a>, January–February 1951<br>
issue of <strong>The New International</strong>.</p>
</td>
</tr>
</tbody></table>
<p class="fst">Not only did we fail to take into account the degree of inflation that actually occurred (in fact, we deliberately made no attempt to forecast the amount of inflation), but we also underestimated the real increase in production and overestimated the amount actually spent on war outlays, as there developed a considerable lag between military expenditure plans and actual purchases. There was, in addition, of course, the conscious stretching out of the defense program by the Truman Administration. The trend line of our new series differs markedly from the old. War outlays have not reached the 20 per cent level, and the necessity for direct controls on production and prices has diminished. Moreover, the rate of increase in the ratio of war outlays to total production has been significantly less than predicted, thereby encouraging the process of atrophy to develop.</p>
<p>The pronounced change that has occurred in the economic outlook may be seen quite clearly from examining the 1952 data on a quarterly basis, while remembering that in our original forecasts we had expected the peak ratio of war outlays to be reached in 1953, as was at that time the apparent plan. On the assumption that net national product will show the same trend as gross national product, and the further assumption that our total war outlay series will correlate closely in trend with the Commerce series for total national security, we can construct index numbers for the quarterly ratios in 1952, with the first quarter of 1952 as base. We then obtain the following picture:</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td colspan="2">
<p class="smc"><strong>Index Numbers of War Outlays Ratio</strong></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">First Quarter 1952</p>
</td>
<td>
<p class="smc">100</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Second Quarter 1952</p>
</td>
<td>
<p class="smc">107</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Third Quarter 1952</p>
</td>
<td>
<p class="smc">106</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Fourth Quarter 1952</p>
</td>
<td>
<p class="smc">102</p>
</td>
</tr>
</tbody></table>
<p class="fst">As can be seen from the above tabulation, the incidence of war outlays during the current military build-up reached a peak during the second quarter of 1952. A slight decline during the third quarter of 1952 was followed by a more significant decline in the last quarter of the year. Present information indicates that this trend continued during the first quarter of 1953. Here, then, we have cogent economic reasons for the setting in of a deflationary trend. The fact that the ratio of war outlays to total output can change in both level and direction during the epoch of the Permanent War Economy is a factor of enormous importance in appraising current trends in the economy, and one of the more neglected aspects of the theory of the Permanent War Economy.</p>
<p>On reexamination, therefore, we feel that our basic conclusions remain valid, although certain formulations may require modification and several of our short-term predictions are invalidated by faulty assumptions. We have, for example, referred to the chronic character of inflation under the Permanent War Economy. Over a period of years, this remains true; yet, as we did indicate, there will be ups and downs in the price level. Hence, a formulation such as “This rate of increase in the price level will continue to be maintained, regardless of controls, because inflation is unceasing and permanent” (Part II, <a href="../../1951/permwar/part2.htm" target="new"><em>Declining Standards of Living</em></a>, March–April 1951 issue of <strong>The New International</strong>, p. 89) is incorrect. It has to be modified by the demonstrable fact that there is a marked variation in the ratio of war outlays to total output, and during the period when the ratio declines, the inflationary pressures are reduced and, in many cases, converted into their opposites – i.e., deflationary pressures.</p>
<p>The decline in the cost of living, as measured by the Consumers’ Price Index, new or old, of the Bureau of Labor Statistics, is clear-cut evidence that the peak of the present inflation has passed. The manner in which several large corporations have used this decline in the cost of living to reduce wages should serve as a reminder that the class struggle has not disappeared.</p>
<p>In retrospect, it is clear that our major error of fact was our gross underestimation in the amount of capital accumulation that could be expected to take place in the period following the outbreak of the Korean war. While we consciously underestimated in order to maximize the amount of civilian output available to sustain civilian standards of living, we neglected to take into sufficient account the fact that even at a 20 per cent level of war outlays there was room for sizable private capital accumulations that did not exist in 1943–1944, when the ratio of war outlays exceeded 40 per cent. As a consequence, we have underestimated the impact of capital accumulation in sustaining the inflationary boom. By the same token, we have not given full weight to the increase in productive capacity to which these unusually large capital accumulations have given rise.</p>
<p>It may help, therefore, if we set the record straight by presenting revised</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td colspan="4">
<p class="smc"><strong>Net Private Capital Formation, 1946–1952</strong><br>
(Billions of Dollars)</p>
</td>
</tr>
<tr valign="bottom">
<td>
<p class="smc"><em>Year</em></p>
</td>
<td>
<p class="smc"><em>Gross<br>
Investment</em></p>
</td>
<td>
<p class="smc"><em>Capital Consumption<br>
Allowances</em></p>
</td>
<td>
<p class="smc"><em>Net<br>
Investment</em></p>
</td>
</tr>
<tr>
<td>
<p class="smc">1946</p>
</td>
<td>
<p class="smc">$33.3 </p>
</td>
<td>
<p class="smc">$12.2 </p>
</td>
<td>
<p class="smc">$21.1 </p>
</td>
</tr>
<tr>
<td>
<p class="smc">1947</p>
</td>
<td>
<p class="smc">39.1</p>
</td>
<td>
<p class="smc">14.8</p>
</td>
<td>
<p class="smc">24.3</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1948</p>
</td>
<td>
<p class="smc">44.6</p>
</td>
<td>
<p class="smc">17.6</p>
</td>
<td>
<p class="smc">27.0</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1949</p>
</td>
<td>
<p class="smc">34.0</p>
</td>
<td>
<p class="smc">19.4</p>
</td>
<td>
<p class="smc">14.6</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1950</p>
</td>
<td>
<p class="smc">48.0</p>
</td>
<td>
<p class="smc">21.5</p>
</td>
<td>
<p class="smc">26.5</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1951</p>
</td>
<td>
<p class="smc">58.7</p>
</td>
<td>
<p class="smc">24.6</p>
</td>
<td>
<p class="smc">34.1</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1952</p>
</td>
<td>
<p class="smc">52.4</p>
</td>
<td>
<p class="smc"> 25.9 est.*</p>
</td>
<td>
<p class="smc"> 26.5 est.</p>
</td>
</tr>
<tr>
<td>
<p class="smc">TOTAL</p>
</td>
<td>
<p class="smc">310.1 </p>
</td>
<td>
<p class="smc">136.0 </p>
</td>
<td>
<p class="smc">174.1 </p>
</td>
</tr>
<tr>
<td>
<p class="smc">AVERAGE</p>
</td>
<td>
<p class="smc">44.3</p>
</td>
<td>
<p class="smc">19.4</p>
</td>
<td>
<p class="smc">24.9</p>
</td>
</tr>
<tr>
<td colspan="4">
<p class="smc">* Estimated assuming the same ratio of net to gross national product in 1952 as in 1951.</p>
</td>
</tr>
</tbody></table>
<p class="fst">actual figures on capital accumulation in substitution for our previous estimates. As before, we equate capital accumulation to net investment in the Commerce private capital formation series. This procedure possesses several weaknesses, especially a dubious treatment of inventory accumulation, but it is the only handy official series and serves the purpose of providing a broad picture of what has happened in this vital sector of the economy.</p>
<p>For the seven post-World War II years, 1946–1952, net private investment totals more than $174 billion, averaging about $25 billion annually. This means that on the average 10 per cent of the net output of each year has been added to the capital stock. There has, consequently, been an enormous increase in productive capacity. This substantial increase in capacity manifests itself first and foremost in durable goods, especially consumer durables. Passenger automobiles, for example, could be produced at a rate of seven million a year and production for 1953 is expected to exceed six million. Since this comes on top of six high production years in a row, there may possibly be some difficulty in disposing of the entire output. The Reuther report, previously cited, states (p. 64): “The industry as a whole, however, is becoming uneasy about future marketing prospects.” In fact, it is a rather open secret in the trade that what prompted the recent price reduction in the Chrysler line is that their cars are backed up all the way to the factory. In short, it may not be long before sales for the entire passenger auto industry fall short of production. Automobile production remains the bellwether of the civilian economy. A similar trend may be expected in several important durable goods lines, thereby adding to the deflationary forces enumerated above.</p>
<p>In discussing the increasingly high organic composition of capital in Part III, <a href="../../1951/permwar/part3.htm" target="new"><em>Increasing State Intervention</em></a>, in the May–June 1951 issue of <strong>The New International</strong>, we stated (p. 150):</p>
<p class="quoteb">“Precisely where the breaking point is likely to be, no one can say, but it is clear that the composition of capital is already dangerously high and constitutes a sword of Damocles, hanging over the unsuspecting head of such a highly-geared capitalist economy that in a few years it is possible to produce all the automobiles, television sets, etc., that can be sold under capitalist conditions of production.”</p>
<p class="fst">While precise figures are not available, all available evidence indicates that the composition of capital has continued to increase. Theoretically, these trends ought to result in a falling average rate of profit. Empirical evidence indicates that both the mass and rate of profit did begin to decline in 1952.</p>
<p>If the net investment figures developed in the previous table are compared with net national product (total output) for the same years, 1946–1952, it will be seen that the ratio is 10 or 11 per cent in all but two years. These were 1949, when an “adjustment” took place, and 1952, when a plateau was reached and the beginnings of an adjustment are apparent. In 1949, the ratio of net investment to net national product was 6 per cent. In 1952, it was 8 per cent.</p>
<p>The pressures previously cited that would lead to increasing reliance on state foreign aid, given the continued low level of private exports of capital, remain. To what extent the Eisenhower Administration will curtail state foreign aid remains to be seen. In any case, exports of capital, both state and private, are unlikely to increase and cannot offset the deflationary trends analyzed above.</p>
<p>Some deflation is clearly in process of taking place. The question remains: how much? A sober consensus is given by Thomas F. Conroy in the <strong>New York Times</strong> of April 12, 1953:</p>
<p class="quoteb">“While the economy appears to be entering a deflationary transition period which may involve some setback and certainly intense competition, business and industry do not face another 1929. There are too many favorable differences between 1953 and 1929.”</p>
<p class="fst">In Part V of the <strong>Permanent War Economy</strong>, <a href="../../1951/permwar/part5.htm" target="new"><em>Some Significant Trends</em></a>, September–October 1951 issue of <strong>The New International</strong>, we stated (p. 254):</p>
<p class="quoteb">“A sharp reduction in war outlays in the near future is therefore unlikely and would in a remarkably short time cause a collapse of the economy.”</p>
<p class="fst">There seems no reason warranting change of this forecast. The ratio of war outlays to total output may decline to 15 per cent or thereabouts, but there is no indication that any sharp reduction in war outlays is in prospect. In fact, peace or no peace in Korea, according to Anthony Leviero in the <strong>New York Times</strong> of April 8th:</p>
<p class="quoteb">“John Foster Dulles, Secretary of State, is planning to go to the North Atlantic Treaty Council meeting in Paris on April 23 with a restatement of this country’s defense policy predicated on <em>ten or twenty years of tension</em>.” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">It does seem possible, however, that at a 15 per cent level it is possible to dispense with most direct controls, although it is worth noting that the Eisenhower Administration has been forced to set up a permanent control establishment in the Office of Defense Mobilization. This agency will undoubtedly be responsible for introducing the stand-by controls in the event that they become necessary.</p>
<p>While official forecasts are necessarily optimistic, indicating that there will be no deflation, it is apparent that some deflation, accompanied by rising unemployment, perhaps to the level of the five million forecast by <strong>Fortune</strong>, is the likely order of events over the next two years. There should, therefore, be a consequent eruption in the class struggle, with increasing strikes throughout the economy. Objective conditions are perceptibly ripening for a leap forward in the political level and class consciousness of the American workers, and it behooves the socialist movement to pay close attention to these awakening forces. Let us not go overboard with predictions of dire depression and mass unemployment. But let us not imbibe capitalist propaganda to the effect that “capitalism has learned how to solve the fundamental problems of the business cycle.” Both extremes are wrong and to be avoided in developing socialist policy for the current economic environment and that of the immediate future.</p>
<p class="fst">April 1953</p>
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T.N. Vance
The Permanent War Economy
Under Eisenhower
An Analysis of Economic Trends in 1953
(April 1953)
From The New International, Vol. XIX No. 2, March–April 1953, pp. 89–99.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Stalinist “peace offensive” has been a long time in coming, but it was inevitable so long as the military stalemate continued in Korea. Stalin’s death may have accelerated the new Kremlin line, although there is considerable evidence that the basic strategy and major tactics of the “peace offensive” were worked out under Stalin’s personal leadership during the past six months. Stalin’s heirs may require time to work out and consolidate the succession. They may also wish to take precautions against any bold foray by the advocates of “preventive war” in Washington; and in an atmosphere of “peace” counsels of military attack are not likely to make much of an impression. Above all, however, they must figure on the “peace offensive” strengthening already apparent deflationary tendencies in the American economy.
Initial reactions in the United States show that the Kremlin’s strategists have not entirely miscalculated. A front-page article on April 8 by ace political reporter of the New York Times, James Reston, is headlined, Soviet Tactics Give U.S. Problem of Avoiding Slump if Peace Comes. The dependence of American prosperity on war outlays is expressed by Reston in these words:
“So long as the Kremlin was waging war in Asia and crying havoc all over the world, the Western nations were able to achieve full employment at home and at least a measure of unity with each other.”
After pointing out that a host of problems in the field of foreign policy are pressing for solution, Reston goes on to state:
The drop in stock market prices immediately after the red doves were sent aloft in Moscow was another reminder to the Administration that the pace of its planning in the domestic economic field was also running behind the pace of world events.
Labor union leaders, concerned about the talk here of cutting the defense budget, already have started appealing to the President to plan at once for the day when the vast Government orders for munitions will drop off. This same thesis is being heard within the President’s official family, particularly from those officials who have been studying the meaning of the recent Soviet moves.
These officials see increasing evidence of an internal struggle for power in Moscow. They believe that, for the time being, the Soviet leaders may want to relax the tension in the world so that they can deal with these internal problems. But the observers think that at the same time the Soviet hierarchy is trying to bring the United States up against the major problem of keeping its people employed when it shifts to a modified peace economy.
In the Soviet mind, the capitalist world cannot close the gap between its production and consumption without vast expenditures for war. The Russians insist on believing that Americans have learned nothing about distribution in the last fifty years and that the only answer to unemployment here is to create international crises that put men to work in the munitions factories.
Even more forthright is Arthur Krock, in his column in the New York Times of April 5:
Though tragic is the jest that what officials fear more than dateless war in Korea is peace, the jest has a real foundation. The vision of peace which could lure the free world into letting down its guard, and demolishing the slow and costly process of building collective security in western Europe while the Soviets maintained and increased their military power, is enough to make men in office indecisive. And the stock market selling that followed the sudden conciliatory overtures from the Kremlin supports the thesis that immediate prosperity in this country is linked to a war economy and suggests desperate economic problems that may arise on the home front. (Italics mine – T.N.V.)
The possibility, even the probability, of a major change in the political and economic climate serves as an opportunity to review some of the major trends in the Permanent War Economy and to focus attention on some neglected aspects that are not without importance. First, however, it is instructive to recall the so-called “Varga controversy” that disturbed Stalinist circles in 1947. It will be recalled that virtually all Stalinist theoreticians took the position that there would be an immediate capitalist collapse following the cessation of military hostilities. Varga, however, disagreed. He maintained that there would be a short period of capitalist prosperity before any crisis developed. The dispute was important not only for its substantive features, but because it is alleged that Varga’s political mentor was Malenkov.
According to the authors of one of the reports of a Zhdanov-Malenkov faction fight, Zhdanov was the “internationalist,” basing his “revolutionary offensive” on the prospect of postwar depression in the capitalist world. Malenkov, however, is supposed to have been the “nationalist,” advocating concentration on Stalinland’s internal problems. Varga’s views were supposed to have been anathema to Zhdanov and to have been welcomed by Malenkov. When Varga was disgraced, it was presumably evidence that Zhdanov had the upper hand in his struggle with Malenkov. Why, then, Varga waited until 1949, after Zhdanov’s death in 1948, to recant is not at all clear. Be that as it may, if Varga played such an important role in the struggle for Stalin’s mantle, he has presumably been installed as number one economic advisor to the Kremlin now that Malenkov is premier. Thus reasons the “cloak-and-dagger” school of interpreting Kremlin actions, of which there are many and varied exponents in this country.
Regardless of whether Varga’s views were or are of political importance in helping to determine Kremlin policy, he has been the leading Stalinist economist and a summary of his views may well be instructive in providing some insight into the motivation for the Kremlin’s “peace offensive.” An article by Evsey D. Domar, associate professor of political economy at The Johns Hopkins University, in the March 1950 issue of the American Economic Review, entitled The Varga Controversy, summarizes the essence of Varga’s predictions (published in September 1946), as:
During the first decade after the war economic conditions will be a natural aftermath of the war itself.
The impoverished countries of Europe and Asia will suffer throughout the period from what he calls a “crisis of underproduction.”
The United States, Canada and other countries whose productive capacities were greatly increased during the war will enjoy a short, two-to-three-year prosperity after its end.
This short prosperity will be followed by a sharp crisis of overproduction, probably more prolonged than that of 1920–21.
When this crisis has been overcome, a new industrial cycle will begin. It will be not of the 1921–29, but of the 1929–37, type; i.e., its recovery will be incomplete. In its background there will be a sharp and prolonged agrarian crisis. (Italics mine – T.N.V.)
The above analysis conforms rather well to actual events, if one assumes that the outbreak of the Korean war prevented the “recession” of 1949–50 from developing into “a sharp crisis of overproduction.” Actually, of course, neither Varga nor any other Stalinist foresaw the development of the Permanent War Economy, but Varga’s expectations of “a sharp and prolonged agrarian crisis” are prescient. For the agricultural crisis has already started, as the Republicans are beginning to discover.
While the news of surplus butter, and threatened surpluses in wheat, cotton, tobacco, etc., is more dramatic, any Kremlin analyst working on trends in the American economy would be able to point up a number of significant developments indicating that a downswing in the economic cycle is at hand:
The raising of the rate of interest. The Federal Reserve rediscount rate has been raised from one and three-quarter per cent to two per cent. This has the effect of reducing business loans by commercial banks and raising the bank rate. The Eisenhower Administration has also raised the interest rate on long-term (thirty-year) bonds to 314 per cent, the impact of which will reinforce the tendencies already at work to raise the average rate of interest throughout the economy. A rise in the average late of interest is normally deflationary; in fact, it is because of a mistaken fear of further inflation that the Eisenhower Administration has admittedly used state power to bring about a rise in the rate of interest.
The falling backlog of orders in the machine tool industry. This was already evident at the end of last year, for the Wall Street Journal in its edition of December 29, 1952 was able to write:
“The heyday of new defense business for machine tool builders is about running out, at least for the time being. This is in marked contrast to the deluge of orders that poured in a year ago on an industry struggling feverishly to expand production ... Backlogs, meantime, continue to be further reduced as rated productive capacity goes up and new business falls off. The industry now has enough business on its books to keep it working at capacity for 11 months, compared with about 18 months at the start of 1952. However, the backlogs are not evenly distributed. Only about one-fourth of the industry can boast a six-month-or-more backlog. Included in the remainder, in fact, are many companies looking for business.”
And the machine tool industry, of course, is the prime mover in the production of means of production.
The slight, but steady, decline in wholesale prices. The wholesale price index for all commodities of the Department of Labor (which has a base of 1947–1949 equal to 100) declined during 1952 from 113 in January to 109.6 in December. While this is a decline of only 3 per cent, it indicates that the period of acute inflation in the primary markets is passed. As a matter of fact, for several months now virtually every raw material has been in distinctly easy supply. The final evidence, of course, is the abandonment of the Controlled Materials Plan, revealing that there is an ample supply of basic metals. While the Eisenhower Administration boasts of decontrol as part of its philosophy, the truth of the matter is that the basic decontrol steps so far taken were planned under the Truman Administration.
The parity ratio, comparing prices received and paid by farmers, shows a perceptible decline during 1952. The figure was 105 in January 1952, but declined almost 10 per cent to 95 in January 1953. Since the parity ratio is based on average prices received and paid by farmers in the period 1910–1914, which was a rather good period for American farmers, a parity ratio below 100 does not indicate that farmers are starving. But a decline of 10 per cent in a year is precipitous, and when the parity ratio goes below 100 (which it did beginning November) political storms start brewing in the Congressional farm bloc.
The deflationary attitude of the Eisenhower Administration as contrasted with the inflationary outlook of the preceding Truman Administration. This manifests itself in various ways, notably in announced programs to reduce Federal expenditures, to stretch out the defense program over a longer period of years, while at the same time there is an apparent refusal to reduce taxes and strict admonishment about the dangers in the expansion of consumer credit. The Eisenhower Administration is believed to be not averse to a mild deflation and to an accompanying modest rise in unemployment.
It is only natural, therefore, that the Kremlin should be aware of growing signs of a deflationary trend in the American economy and should seek to take advantage of them. If its “peace offensive” encourages a larger reduction in war outlays than already planned, the possibilities of American internal difficulties diverting attention from consolidation of alliances and strengthening the military position of American imperialism abroad are that much greater. Moreover, no careful analysis of the American economy is required to arrive at the conclusion that deflation is at hand. It is only necessary to read the public statements of responsible spokesmen of big business and organized labor.
For example, Fortune magazine in its March 1953 issue states:
A majority of U.S. businessmen expect some sort of decline in business activity in the next couple of years, according to a recent Journal of Commerce survey, as do a majority of economists and analysts of business. Fortune looks for a slight downturn as early as the second half of the year. But as for the larger and longer-term worries about recession or depression sometime in 1954 or 1955, we believe the readjustment is apt to be mild, if relatively prolonged.
After a discussion of semantics and defining a “readjustment” as a mild recession, Fortune takes an unusually forthright position (which accounts for this article being much quoted) by stating:
The present outlook is for “a mild but prolonged readjustment,” perhaps lasting a year and a half, because non-durable goods and services should grow as taxes come down (along with defense outlays), and because public works and exports should offset a decline in capital expenditures. This readjustment would wind up, according to Fortune’s “reasonable” projection of 1955, with G.N.P. and industrial output distinctly below prospective capacity and with possibly five million unemployed. (Italics mine – T.N.V.)
Unemployment of five million would mean an increase of 200 per cent over present levels, and would undoubtedly pose serious problems. Such a prospect naturally concerns organized labor, particularly its more articulate sections such as the U.A.W. One can, for example, quote at great length from the report of President Walter P. Reuther to the 14th Constitutional Convention of the UAW, held at the end of March at Atlantic City. A 20-page section on General Economic Conditions begins by stating:
“The national economy is now headed for a long-postponed showdown with basic economic realities. Since 1939, when 9½ million unemployed walked the streets, there has been no real test of the stability of our economy. In all the years since, this country has not had to face up to the question of whether we can raise our living standards to match our power to produce, and then keep both rising together.”
After recounting the increase in productive capacity (“Manufacturing capacity increased by 31 per cent from 1939 to 1946 and by 55 per cent from 1946 to 1952”) and the enormous currently unsatisfied needs of the American working class, as well as reviewing in a comprehensive manner the basic trends within the economy, Reuther concludes with an impressive non-sequitur that “our economy [must] move rapidly forward to constantly improved living standards, or collapse in depression.”
One should not fall victim to one’s own propaganda. Everyone will agree that the constant improvement of living standards is a desirable goal, but the probability of such a development is rather small. In fact, under the Permanent War Economy it is impossible over any extended period of time. It does not, therefore, follow – as Reuther (and others) would have us believe – that the economy will “collapse in depression.” On the contrary, an understanding of the Permanent War Economy would reveal that a sizable depression is excluded. This does not mean that a downturn is impossible. We have shown in our original series of articles on the Permanent War Economy that “the changes [in the ratio of war outlays to total output] are rapid and qualitative in nature, which is another characteristic of the Permanent War Economy stage of capitalism. The figures suggest that about 10 per cent of total output must be spent in the form of war outlays before the latter become significant in their impact.” (The New International, January–February, 1951, p. 38)
ACTUALLY, WHAT HAS HAPPENED IS THAT the ratio of war outlays to total output is beginning to decline. This trend was already evident prior to the start of the new Stalinist “peace offensive.” It appears likely that it will become more pronounced in the near future. There is still no evidence, however, that capitalism intends to abandon the Permanent War Economy. Both political and economic considerations clearly exclude such a variant.
If we revert to the analogy of “habit-forming drugs,” used in the introduction to Part III of the series on the Permanent War Economy, Increasing State Intervention (cf.
The New International, May–June 1951, p. 132), we can refer to the economy as a drug addict. War outlays are the drug which has sustained a high level of economic activity. As is apparently the case with pathological drug addicts, a constantly increasing dosage is required in order to maintain the same effects of activity as previously. The measurement of the “dosage” is the ratio of war outlays to total output. Even a stable ratio of war outlays leads to a process of atrophy setting in. The “appetite” of the economy for war outlays increases steadily. If the ratio of war outlays to total output, although significant, merely remains level, tendencies toward a slackening in activity begin to appear in various sectors. If, on top of this, an actual decline in the ratio of war outlays to total output is to be recorded, then deflationary consequences are unavoidable. How much deflation is, of course, another question. There can be deflation without depression, in any recognizable meaning of the term.
War Outlays, 1949–1952
And Their Relationship to Total Output
(Figures in Billions)
Year
Net
National
Product
(1)
WAR OUTLAYS
Col. (4)
as % of
Col. (1)
(5)
Direct
(2)
Indirect
(3)
Total
(4)
1949
$238.9
$13.6
$13.7
$27.3
11.4%
1950
262.6
14.2
11.7
25.9
9.9
1951
304.6
33.7
9.3
43.0
14.1
1952*
320.4
46.0
8.8
54.8
17.1
* Net national product is derived from gross national product for 1952, as shown in the March 1953 issue of the Survey of Current Business; war outlays are derived from the Commerce series on National Security, together with the Treasury series on National Defense and Related Activities. Our estimates, therefore, follow the procedure explained in the text and are dependent upon official government figures.
Inasmuch as it is now more than two years since the basic calculations were made in the development of the theory of the Permanent War Economy, we can now substitute actuals for our estimates. This is done below for the period 1949–1952 inclusive.
Our concept of measuring the ratio of war outlays by comparing direct and indirect war outlays to net national product remains as heretofore stated. Our concepts of direct and indirect war outlays, however, have undergone some modification because in the interim Commerce has redefined and republished the Federal war component of Federal government purchases of goods and services. This has been in the form of a series entitled “national security,” which is broken down into “national defense” and “other national security.” The definitions, contained in the July 1952 issue of the Survey of Current Business, are:
“National defense purchases comprise the purchases of the Atomic Energy Commission, Defense Department, Maritime Administration (before 1950), National Advisory Committee for Aeronautics, and Selective Service System, together with purchases for the programs of defense production and economic stabilization, foreign military assistance administered by Mutual Security Agency (formerly Mutual Defense Assistance program), and the stockpiling of strategic and critical materials.”
This is a broader concept than we previously used, and involves shifting from indirect to direct war outlays such programs as atomic energy, foreign military assistance and military stockpiling. There can, however, be no objection to this revised definition of war outlays.
The “other national security” series of Commerce forms only one part of our concept of indirect war outlays, for it is defined as comprising those purchases of “the Maritime Administration (after 1949), National Security Council, National Security Resources Board, Philippine Damage Commission, and State Department, as well as purchases for the following foreign economic assistance programs: those now administered by the Mutual Security Agency, government and relief in occupied areas, India Emergency Food Aid, International Children’s Emergency Fund, and Yugoslav Emergency Relief Assistance." To this base, we have added purchases of the Veterans’ Administration, as well as certain minor governmental programs, as explained in Part I, p. 36 of the January–February 1951 issue of The New International.
The differences between our revised calculations and our earlier estimates may be seen by comparing the ratios of war outlays to total output, as follows:
War Outlay Ratios
Revised
Original*
1949
11.4%
10.60%
1950
9.9
10.9
1951
14.1
20.0
1952
17.1
21.1
* Taken from Table B of Part I, January–February 1951
issue of The New International.
Not only did we fail to take into account the degree of inflation that actually occurred (in fact, we deliberately made no attempt to forecast the amount of inflation), but we also underestimated the real increase in production and overestimated the amount actually spent on war outlays, as there developed a considerable lag between military expenditure plans and actual purchases. There was, in addition, of course, the conscious stretching out of the defense program by the Truman Administration. The trend line of our new series differs markedly from the old. War outlays have not reached the 20 per cent level, and the necessity for direct controls on production and prices has diminished. Moreover, the rate of increase in the ratio of war outlays to total production has been significantly less than predicted, thereby encouraging the process of atrophy to develop.
The pronounced change that has occurred in the economic outlook may be seen quite clearly from examining the 1952 data on a quarterly basis, while remembering that in our original forecasts we had expected the peak ratio of war outlays to be reached in 1953, as was at that time the apparent plan. On the assumption that net national product will show the same trend as gross national product, and the further assumption that our total war outlay series will correlate closely in trend with the Commerce series for total national security, we can construct index numbers for the quarterly ratios in 1952, with the first quarter of 1952 as base. We then obtain the following picture:
Index Numbers of War Outlays Ratio
First Quarter 1952
100
Second Quarter 1952
107
Third Quarter 1952
106
Fourth Quarter 1952
102
As can be seen from the above tabulation, the incidence of war outlays during the current military build-up reached a peak during the second quarter of 1952. A slight decline during the third quarter of 1952 was followed by a more significant decline in the last quarter of the year. Present information indicates that this trend continued during the first quarter of 1953. Here, then, we have cogent economic reasons for the setting in of a deflationary trend. The fact that the ratio of war outlays to total output can change in both level and direction during the epoch of the Permanent War Economy is a factor of enormous importance in appraising current trends in the economy, and one of the more neglected aspects of the theory of the Permanent War Economy.
On reexamination, therefore, we feel that our basic conclusions remain valid, although certain formulations may require modification and several of our short-term predictions are invalidated by faulty assumptions. We have, for example, referred to the chronic character of inflation under the Permanent War Economy. Over a period of years, this remains true; yet, as we did indicate, there will be ups and downs in the price level. Hence, a formulation such as “This rate of increase in the price level will continue to be maintained, regardless of controls, because inflation is unceasing and permanent” (Part II, Declining Standards of Living, March–April 1951 issue of The New International, p. 89) is incorrect. It has to be modified by the demonstrable fact that there is a marked variation in the ratio of war outlays to total output, and during the period when the ratio declines, the inflationary pressures are reduced and, in many cases, converted into their opposites – i.e., deflationary pressures.
The decline in the cost of living, as measured by the Consumers’ Price Index, new or old, of the Bureau of Labor Statistics, is clear-cut evidence that the peak of the present inflation has passed. The manner in which several large corporations have used this decline in the cost of living to reduce wages should serve as a reminder that the class struggle has not disappeared.
In retrospect, it is clear that our major error of fact was our gross underestimation in the amount of capital accumulation that could be expected to take place in the period following the outbreak of the Korean war. While we consciously underestimated in order to maximize the amount of civilian output available to sustain civilian standards of living, we neglected to take into sufficient account the fact that even at a 20 per cent level of war outlays there was room for sizable private capital accumulations that did not exist in 1943–1944, when the ratio of war outlays exceeded 40 per cent. As a consequence, we have underestimated the impact of capital accumulation in sustaining the inflationary boom. By the same token, we have not given full weight to the increase in productive capacity to which these unusually large capital accumulations have given rise.
It may help, therefore, if we set the record straight by presenting revised
Net Private Capital Formation, 1946–1952
(Billions of Dollars)
Year
Gross
Investment
Capital Consumption
Allowances
Net
Investment
1946
$33.3
$12.2
$21.1
1947
39.1
14.8
24.3
1948
44.6
17.6
27.0
1949
34.0
19.4
14.6
1950
48.0
21.5
26.5
1951
58.7
24.6
34.1
1952
52.4
25.9 est.*
26.5 est.
TOTAL
310.1
136.0
174.1
AVERAGE
44.3
19.4
24.9
* Estimated assuming the same ratio of net to gross national product in 1952 as in 1951.
actual figures on capital accumulation in substitution for our previous estimates. As before, we equate capital accumulation to net investment in the Commerce private capital formation series. This procedure possesses several weaknesses, especially a dubious treatment of inventory accumulation, but it is the only handy official series and serves the purpose of providing a broad picture of what has happened in this vital sector of the economy.
For the seven post-World War II years, 1946–1952, net private investment totals more than $174 billion, averaging about $25 billion annually. This means that on the average 10 per cent of the net output of each year has been added to the capital stock. There has, consequently, been an enormous increase in productive capacity. This substantial increase in capacity manifests itself first and foremost in durable goods, especially consumer durables. Passenger automobiles, for example, could be produced at a rate of seven million a year and production for 1953 is expected to exceed six million. Since this comes on top of six high production years in a row, there may possibly be some difficulty in disposing of the entire output. The Reuther report, previously cited, states (p. 64): “The industry as a whole, however, is becoming uneasy about future marketing prospects.” In fact, it is a rather open secret in the trade that what prompted the recent price reduction in the Chrysler line is that their cars are backed up all the way to the factory. In short, it may not be long before sales for the entire passenger auto industry fall short of production. Automobile production remains the bellwether of the civilian economy. A similar trend may be expected in several important durable goods lines, thereby adding to the deflationary forces enumerated above.
In discussing the increasingly high organic composition of capital in Part III, Increasing State Intervention, in the May–June 1951 issue of The New International, we stated (p. 150):
“Precisely where the breaking point is likely to be, no one can say, but it is clear that the composition of capital is already dangerously high and constitutes a sword of Damocles, hanging over the unsuspecting head of such a highly-geared capitalist economy that in a few years it is possible to produce all the automobiles, television sets, etc., that can be sold under capitalist conditions of production.”
While precise figures are not available, all available evidence indicates that the composition of capital has continued to increase. Theoretically, these trends ought to result in a falling average rate of profit. Empirical evidence indicates that both the mass and rate of profit did begin to decline in 1952.
If the net investment figures developed in the previous table are compared with net national product (total output) for the same years, 1946–1952, it will be seen that the ratio is 10 or 11 per cent in all but two years. These were 1949, when an “adjustment” took place, and 1952, when a plateau was reached and the beginnings of an adjustment are apparent. In 1949, the ratio of net investment to net national product was 6 per cent. In 1952, it was 8 per cent.
The pressures previously cited that would lead to increasing reliance on state foreign aid, given the continued low level of private exports of capital, remain. To what extent the Eisenhower Administration will curtail state foreign aid remains to be seen. In any case, exports of capital, both state and private, are unlikely to increase and cannot offset the deflationary trends analyzed above.
Some deflation is clearly in process of taking place. The question remains: how much? A sober consensus is given by Thomas F. Conroy in the New York Times of April 12, 1953:
“While the economy appears to be entering a deflationary transition period which may involve some setback and certainly intense competition, business and industry do not face another 1929. There are too many favorable differences between 1953 and 1929.”
In Part V of the Permanent War Economy, Some Significant Trends, September–October 1951 issue of The New International, we stated (p. 254):
“A sharp reduction in war outlays in the near future is therefore unlikely and would in a remarkably short time cause a collapse of the economy.”
There seems no reason warranting change of this forecast. The ratio of war outlays to total output may decline to 15 per cent or thereabouts, but there is no indication that any sharp reduction in war outlays is in prospect. In fact, peace or no peace in Korea, according to Anthony Leviero in the New York Times of April 8th:
“John Foster Dulles, Secretary of State, is planning to go to the North Atlantic Treaty Council meeting in Paris on April 23 with a restatement of this country’s defense policy predicated on ten or twenty years of tension.” (Italics mine – T.N.V.)
It does seem possible, however, that at a 15 per cent level it is possible to dispense with most direct controls, although it is worth noting that the Eisenhower Administration has been forced to set up a permanent control establishment in the Office of Defense Mobilization. This agency will undoubtedly be responsible for introducing the stand-by controls in the event that they become necessary.
While official forecasts are necessarily optimistic, indicating that there will be no deflation, it is apparent that some deflation, accompanied by rising unemployment, perhaps to the level of the five million forecast by Fortune, is the likely order of events over the next two years. There should, therefore, be a consequent eruption in the class struggle, with increasing strikes throughout the economy. Objective conditions are perceptibly ripening for a leap forward in the political level and class consciousness of the American workers, and it behooves the socialist movement to pay close attention to these awakening forces. Let us not go overboard with predictions of dire depression and mass unemployment. But let us not imbibe capitalist propaganda to the effect that “capitalism has learned how to solve the fundamental problems of the business cycle.” Both extremes are wrong and to be avoided in developing socialist policy for the current economic environment and that of the immediate future.
April 1953
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<h2>Frank Demby</h2>
<h1>The Breakdown of Soviet Planning Under Stalin</h1>
<h3>(March 1941)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_09" target="new">Vol. 5 No. 9</a>, 3 March 1941, p. 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">The recent 18th conference of Stalin’s “Communist” Party indicates that the Stalinist regime is near the end of its rope. Behind the more dramatic expulsions of Litvinoff, as a member, and Madame Molotoff, as an alternate, from Stalin’s Central Committee lurks the lurid self-confessed picture of bureaucratic bankruptcy. All the manipulations of statistics, which long ago became a “class” science in Stalinland – i.e., a propaganda device – cannot hide the fact that the regime totters on the brink of the grave.</p>
<p>“The more honest we are in disclosing our shortcomings, the sooner shall we be able to get rid of them. Stalin daily teaches us this,” said the nonentity, Malenkoff, who delivered the main report, while “the great leader of the peoples, Stalin,” sat on the platform calmly watching his lackeys trying to explain away the awful mess into which his gangster regime has dragged the entire national economy. Hypocrisy knows no limits so far as these cynical grave-diggers of the revolution are concerned. “The regime of dirt, top-heavy bureaucracy, laziness, armchair administration, and chatter-boxes” has resulted, according to Malenkoff, in decreased output, increasing costs and threatened purges in such industries as building materials and lumber, oil, paper, railroad and water transport, aircraft, chemical, munitions, electrical, maritime and fishing. This picture of more or less complete chaos is then dressed up by Voznesensky, chairman of the State Planning Commission, as one of “new Socialist upsurge and further progress.”<br>
</p>
<h4>From Plan to Plan</h4>
<p class="fst">“On November, 1, 1940,” reports <strong>Pravda</strong> (as quoted in the <strong>Daily Worker</strong> of Feb. 18), “in eight industrial people’s commissariats, 33,000 machine tools stand idle. At 7,629 enterprises, 170,000 electric motors were not mounted. The cement industry last year worked only at 64 per cent of its capacity.” This presumably is an illustration of what Voznesensky means when he says (<strong>Sunday Worker</strong>, Feb. 23): “However, by no means all enterprises and people’s commissariats have utilized the possibilities for the growth of production created by the edict of the Presidium of the Supreme Soviet of the USSR, dated June 26, 1940.” (This refers to the <a href="../01/russia2.htm" target="new">industrial peonage laws</a> which I described in <strong>Labor Action</strong> of Feb. 3.)</p>
<p>In spite of the fact that Voznesensky’s report is carefully enveloped in percentages and figures expressed in rubles, and in spite of the omission of certain vital figures, it is possible, on the basis of what is given and what is known about the situation of Soviet economy at the end of the Second Five Year Plan in 1937, to obtain a fairly reliable picture of the extent of the breakdown of Soviet economic planning during the last three years – years of almost constant and perpetual purges, the Soviet-Finnish war and the Hitler-Stalin pact, which has resulted in Soviet economy becoming more and more dependent on German economy The Second Five Year Plan was begun on Jan. 1, 1933, with the fond expectation of “overtaking and outstripping the capitalistic countries” by the end of it, in 1937. One must rub one’s eyes with amazement at the proposal of a Fifteen Year Plan, which emanated from the recent conference, and has for its purpose “outstripping the leading capitalist states in the <em>per capita</em> production of pig iron, steel, fuel, electric power, machinery and other means of production and articles of consumption.” The fact that <em>per capita</em> production in the Soviet Union declined during the last three years and that it admittedly lags way behind production in the advanced capitalist countries (three to four times, according to Voznesensky, and much more in reality) may not disturb the equanimity of Stalin and his hierarchy. But surely the Russian workers and peasants do not feel overjoyed at the prospect of facing 15 more years of Stalin’s rule of promises mixed with forced slavery.</p>
<p>The Third Five Year Plan (1938–1942) was not even mentioned during the year 1938. Except for the fact that it was supposed to be approved by the Council of People’s Commissars by <em>July 1, 1937</em>, one would never know that a Third Five Year Plan was even contemplated. In January 1939, however, it was admitted that “difficulties of reorganization” had delayed the publication of the Third Five Year Plan, but it was nevertheless operating “satisfactorily.” The plan was formally approved at the 17th Congress of the Communist Party in March, 1939. Aside from an oblique reference by Molotoff to the fact that the Third Five Year Plan called for a 100 per cent increase in heavy industry and producers’ goods during the lifetime of the Plan, one could have legitimately questioned the existence of a Third Five Year Plan, even on paper.</p>
<p>After years of constant sacrifice, the promise that Stalin made to the Russian masses that a temporary period of sacrifice would result in the creation of a land of plenty is completely belied by the official figures on national income given by the same Voznesensky. The national income of the USSR was 125,500,000,000 rubles in 1940, or a <em>per capita</em> annual income of about 650 rubles. The national income in 1937, at the end of the Second Five Year Plan, is now officially announced as 96 billion rubles, or a <em>per capita</em> annual income of about 600 rubles. The increase of 29,500,000,000 rubles is thus almost entirely negated by the increase in population, which is a product of Stalin’s expansionist policy and his reactionary social laws, such as virtually making abortions impossible and using the fascist technique of bonuses for large families. But this fails to take into account the purchasing power of the ruble and what has happened to the purchasing power of the ruble during the last three years. The most conservative estimates available indicate that the ruble’s purchasing power has declined by at least half since 1937. This indicates that the average standard of living of the Russian people has declined by at least 46 per cent during the last three years. And since the inequality of income in Russia is notorious, this means that the overwhelming majority of workers and peasants suffered a much greater decline in their standard of living. It is highly probable, therefore, that the standard of living of the Russian workers and peasants today, more than 23 years after the Bolshevik Revolution, is decidedly below that which existed under the Czar and can only be compared with that of the Chinese coolie.</p>
<p>This decline in the standard of living is in sharp contrast to the growth of the productive forces.<br>
</p>
<h4>Production Lags</h4>
<p class="fst">When Voznesensky reports that Soviet production is 534 per cent of 1929 production and goes on to make such a terrific hullaballoo about this tremendous increase as compared with the very small increase in production in the United States between 1929 and 1940, it is first necessary to make a few important corrections and then to give the figures the proper interpretation.</p>
<p>In the first place, on the basis of rough estimates which I made for 1929 production in the USSR, production in 1940 was 283 per cent of 1929 – and not 534 per cent In the second place, the decisive portion of this very considerable increase took place during the first and second Five Year Plans – not during the first three years of the third Five Year Plan. The increase during the last three years is only about 15 per cent.</p>
<p>In the third place, production during the first three years of the third Five Year Plan was supposed to have increased by about 60 per cent. It only increased 15 per cent. In other words, the plan, if it exists, has only been fulfilled about 25 per cent so far, and this does not take into account the terrific disproportions in Soviet economy caused by the bureaucratic commands entering into the economy as a result of underfulfillment of certain plans and the drive to overfulfill others.</p>
<p>Fourthly, and most important of all, according to official Stalinist estimates, production at the end of the second Five Year Plan (1937) was estimated to have increased anywhere between 8 and 12 times from the productive levels of 1929. So that, even if we accept as entirely accurate the Stalinist figure of 1940 production as being a little more than five times the 1929 production, the regime stands convicted of a considerable decrease in production.</p>
<p>The crisis in the Soviet economy has reached such proportions that it cannot be concealed. That is the real meaning of Stalin’s 18th Party Congress. And this was only to be expected, for genuine economic planning requires thoroughgoing democratic control of the planned economy by the working population. This, of course, is utterly excluded as long as the totalitarian bureaucracy exists. Correcting mistakes in the plans and flaws in the economy becomes impossible when life is organized on the basis of: Produce according to the dictates of the Kremlin or be shot. The idle boast that the USSR is now independent of capitalist economy is given the lie by the official figures for Soviet production and by the steady efforts made to import machines and machine tools from Germany and the United States. Stalin can only hope to offset the economic crisis, expressed in declining standards of living, declining productivity of labor and the slowing down of the growth of production almost to a standstill, and thus preserve his tottering regime, by engaging in new foreign adventures.</p>
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Frank Demby
The Breakdown of Soviet Planning Under Stalin
(March 1941)
From Labor Action, Vol. 5 No. 9, 3 March 1941, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The recent 18th conference of Stalin’s “Communist” Party indicates that the Stalinist regime is near the end of its rope. Behind the more dramatic expulsions of Litvinoff, as a member, and Madame Molotoff, as an alternate, from Stalin’s Central Committee lurks the lurid self-confessed picture of bureaucratic bankruptcy. All the manipulations of statistics, which long ago became a “class” science in Stalinland – i.e., a propaganda device – cannot hide the fact that the regime totters on the brink of the grave.
“The more honest we are in disclosing our shortcomings, the sooner shall we be able to get rid of them. Stalin daily teaches us this,” said the nonentity, Malenkoff, who delivered the main report, while “the great leader of the peoples, Stalin,” sat on the platform calmly watching his lackeys trying to explain away the awful mess into which his gangster regime has dragged the entire national economy. Hypocrisy knows no limits so far as these cynical grave-diggers of the revolution are concerned. “The regime of dirt, top-heavy bureaucracy, laziness, armchair administration, and chatter-boxes” has resulted, according to Malenkoff, in decreased output, increasing costs and threatened purges in such industries as building materials and lumber, oil, paper, railroad and water transport, aircraft, chemical, munitions, electrical, maritime and fishing. This picture of more or less complete chaos is then dressed up by Voznesensky, chairman of the State Planning Commission, as one of “new Socialist upsurge and further progress.”
From Plan to Plan
“On November, 1, 1940,” reports Pravda (as quoted in the Daily Worker of Feb. 18), “in eight industrial people’s commissariats, 33,000 machine tools stand idle. At 7,629 enterprises, 170,000 electric motors were not mounted. The cement industry last year worked only at 64 per cent of its capacity.” This presumably is an illustration of what Voznesensky means when he says (Sunday Worker, Feb. 23): “However, by no means all enterprises and people’s commissariats have utilized the possibilities for the growth of production created by the edict of the Presidium of the Supreme Soviet of the USSR, dated June 26, 1940.” (This refers to the industrial peonage laws which I described in Labor Action of Feb. 3.)
In spite of the fact that Voznesensky’s report is carefully enveloped in percentages and figures expressed in rubles, and in spite of the omission of certain vital figures, it is possible, on the basis of what is given and what is known about the situation of Soviet economy at the end of the Second Five Year Plan in 1937, to obtain a fairly reliable picture of the extent of the breakdown of Soviet economic planning during the last three years – years of almost constant and perpetual purges, the Soviet-Finnish war and the Hitler-Stalin pact, which has resulted in Soviet economy becoming more and more dependent on German economy The Second Five Year Plan was begun on Jan. 1, 1933, with the fond expectation of “overtaking and outstripping the capitalistic countries” by the end of it, in 1937. One must rub one’s eyes with amazement at the proposal of a Fifteen Year Plan, which emanated from the recent conference, and has for its purpose “outstripping the leading capitalist states in the per capita production of pig iron, steel, fuel, electric power, machinery and other means of production and articles of consumption.” The fact that per capita production in the Soviet Union declined during the last three years and that it admittedly lags way behind production in the advanced capitalist countries (three to four times, according to Voznesensky, and much more in reality) may not disturb the equanimity of Stalin and his hierarchy. But surely the Russian workers and peasants do not feel overjoyed at the prospect of facing 15 more years of Stalin’s rule of promises mixed with forced slavery.
The Third Five Year Plan (1938–1942) was not even mentioned during the year 1938. Except for the fact that it was supposed to be approved by the Council of People’s Commissars by July 1, 1937, one would never know that a Third Five Year Plan was even contemplated. In January 1939, however, it was admitted that “difficulties of reorganization” had delayed the publication of the Third Five Year Plan, but it was nevertheless operating “satisfactorily.” The plan was formally approved at the 17th Congress of the Communist Party in March, 1939. Aside from an oblique reference by Molotoff to the fact that the Third Five Year Plan called for a 100 per cent increase in heavy industry and producers’ goods during the lifetime of the Plan, one could have legitimately questioned the existence of a Third Five Year Plan, even on paper.
After years of constant sacrifice, the promise that Stalin made to the Russian masses that a temporary period of sacrifice would result in the creation of a land of plenty is completely belied by the official figures on national income given by the same Voznesensky. The national income of the USSR was 125,500,000,000 rubles in 1940, or a per capita annual income of about 650 rubles. The national income in 1937, at the end of the Second Five Year Plan, is now officially announced as 96 billion rubles, or a per capita annual income of about 600 rubles. The increase of 29,500,000,000 rubles is thus almost entirely negated by the increase in population, which is a product of Stalin’s expansionist policy and his reactionary social laws, such as virtually making abortions impossible and using the fascist technique of bonuses for large families. But this fails to take into account the purchasing power of the ruble and what has happened to the purchasing power of the ruble during the last three years. The most conservative estimates available indicate that the ruble’s purchasing power has declined by at least half since 1937. This indicates that the average standard of living of the Russian people has declined by at least 46 per cent during the last three years. And since the inequality of income in Russia is notorious, this means that the overwhelming majority of workers and peasants suffered a much greater decline in their standard of living. It is highly probable, therefore, that the standard of living of the Russian workers and peasants today, more than 23 years after the Bolshevik Revolution, is decidedly below that which existed under the Czar and can only be compared with that of the Chinese coolie.
This decline in the standard of living is in sharp contrast to the growth of the productive forces.
Production Lags
When Voznesensky reports that Soviet production is 534 per cent of 1929 production and goes on to make such a terrific hullaballoo about this tremendous increase as compared with the very small increase in production in the United States between 1929 and 1940, it is first necessary to make a few important corrections and then to give the figures the proper interpretation.
In the first place, on the basis of rough estimates which I made for 1929 production in the USSR, production in 1940 was 283 per cent of 1929 – and not 534 per cent In the second place, the decisive portion of this very considerable increase took place during the first and second Five Year Plans – not during the first three years of the third Five Year Plan. The increase during the last three years is only about 15 per cent.
In the third place, production during the first three years of the third Five Year Plan was supposed to have increased by about 60 per cent. It only increased 15 per cent. In other words, the plan, if it exists, has only been fulfilled about 25 per cent so far, and this does not take into account the terrific disproportions in Soviet economy caused by the bureaucratic commands entering into the economy as a result of underfulfillment of certain plans and the drive to overfulfill others.
Fourthly, and most important of all, according to official Stalinist estimates, production at the end of the second Five Year Plan (1937) was estimated to have increased anywhere between 8 and 12 times from the productive levels of 1929. So that, even if we accept as entirely accurate the Stalinist figure of 1940 production as being a little more than five times the 1929 production, the regime stands convicted of a considerable decrease in production.
The crisis in the Soviet economy has reached such proportions that it cannot be concealed. That is the real meaning of Stalin’s 18th Party Congress. And this was only to be expected, for genuine economic planning requires thoroughgoing democratic control of the planned economy by the working population. This, of course, is utterly excluded as long as the totalitarian bureaucracy exists. Correcting mistakes in the plans and flaws in the economy becomes impossible when life is organized on the basis of: Produce according to the dictates of the Kremlin or be shot. The idle boast that the USSR is now independent of capitalist economy is given the lie by the official figures for Soviet production and by the steady efforts made to import machines and machine tools from Germany and the United States. Stalin can only hope to offset the economic crisis, expressed in declining standards of living, declining productivity of labor and the slowing down of the growth of production almost to a standstill, and thus preserve his tottering regime, by engaging in new foreign adventures.
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<h2>Frank L. Demby</h2>
<h1>New Crisis Hits People’s Front Gov’t in France</h1>
<h3>(October 1937)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Socialist Appeal</strong>, <a href="../../../../newspape/themilitant/socialist-appeal-1937/index.htm#sa01_09" target="new">Vol. 1 No. 9</a>, 9 October 1937, pp. 1 & 6.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">The rapidly approaching cantonal elections and the October 2 communiqué of the French cabinet serve once again to focus the eyes of the politically conscious on France. The long-smouldering crisis bids fair to break out into the open with far-reaching consequences for France and the entire world. P.J. Philip, Paris correspondent of the <strong>New York Times</strong>, describes the recent cabinet meeting as having “altered the whole course along which France has been traveling since the Popular Front Government came into power fifteen months ago.”</p>
<p>Signs of the coming crisis and indications as to its nature have not been lacking. Already, during the last months of the Blum cabinet, it was not difficult to see that the major political parties in the Peoples Front were being subjected to different social pressures, which, together with the exigencies of diplomacy and political maneuvering, were tending to pull the People’s From apart – or, at least, sufficed to show that the honeymoon period was over.</p>
<p>The Radicals, conscious instrument of French finance imperialism, have steadily pulled in the direction of a Bonapartist regime – at first, due chiefly to the requirements of foreign policy (alliance with England, strangling of the Spanish Revolution, rapprochement with Germany), but soon the internal situation (especially financial) forced the Senate (dominated toy the Radicals) to kick over the traces and to replace the Blum cabinet by the Chautemps cabinet. In between, the SP has been trying to make the class-collaborationist policy of the People’s Front palatable to the workers and to maintain harmony within its own ranks.</p>
<p>In any case, if one doubts the depth of the dissension within the Peoples Front, or, perhaps even the existence of a crisis, the smoke that has not ceased to obscure the political skies since the coming to power of Chautemps leaves little doubt as to the existence of the crisis, and, to -a lesser extent, of its nature.<br>
</p>
<h4>Socialists Continue Old Line</h4>
<p class="fst">The National Congress of the SP at Marseilles (July 10–14) openly revealed the crisis. Coming on top of a postponement which facilitated the CAP (Permanent Administrative Committee) in making the decision to support the Chautemp cabinet, after having cracked down on the youth by dissolving the Seine Federation and its paper, <strong>La Jeune Garde</strong>, and expelling the youth leaders, after having illegalized Pivert’s “Revolutionary Left”, there was bound to be fireworks and the Blum-Faure bureaucracy had to exert all its bureaucratic pressure to maintain its majority. But little did anyone think that the “Socialist” government bureaucracy would be so hard-pressed to maintain its majority, nor that there would be such violent incidents as the fist-fights and other turbulent scenes that many times threatened actually to stop the proceedings.</p>
<p>The most interesting aspect of the Congress was undoubtedly the existence of the three tendencies – Blum-Faure, Zyromski-Bracke and Pivert. To be sure, there was no opposition to the People’s Front in principle – all such opposition having already been expelled or thoroughly squelched. The differences of opinions, therefore, all took place within the framework of class-collaboration, and are, at most, the differences between reformism and centrism. The actions of the first People’s Front Government, “under Socialist leadership,” were overwhelmingly approved by 4,549 to 26.</p>
<p>The major debate, front page news throughout the country, was over the Blum-Faure motion to continue participation in the Chautemps cabinet. It was carried after a tumultuous session by 3,484 mandates against 1,866. The differences became clear, however, only on the debate over general policy, which included perspectives for the future of the party. Blum-Faure again carried the day for their outright reformist policy, receiving 2,949 mandates. Zyromski-Bracke received 1,545 mandates for their positions, which was to support Chautemps but to prepare immediately for the replacement of Chautemps by another Blum cabinet. In the words of Zyromski: “The Chautemps government is not in the image of the People’s Front, but is a poor substitute (<em>ersatz</em>) for a People’s Front Government.” Pivert indignantly denied that he was a “Trotskyite” and proposed a “fighting government” – i.e., the formation of another Blum government immediately, for which he received 894 mandates. The victory of the right-wing bureaucracy was sealed with the election of the new CAP, on which there are 18 supporters of Blum-Faure, 9 of Zyromski-Bracke and 6 of Pivert.</p>
<p>The Stalinists, having toyed with the slogan of “Thorez to power” (Thorez being the General Secretary of the CP and its outstanding leader at present) on July 14th, were the next to cause the political pulse to rise when, on July 29th, <strong>L’Humanité</strong> (official organ of the CP) ran a front-page editorial for the immediate consummation of organic unity. “The workers want the united party. It was a mistake to have split in 1920.” All this of course, with one eye cocked on the cantonal elections; for, under the French system of run-off elections and the People’s Front agreements organic unity would mean that the unified party (which the Stalinists would be sure to dominate as they have in Catalonia in the case of the PSUC) would gain at the expense of the Radicals.<br>
</p>
<h4>Radicals Divided</h4>
<p class="fst">The Radicals, themselves, were meanwhile being torn in two. The so-called left wing, dominated by Daladier-Herriot and using the notorious Chautemps, of Stavisky scandal fame, as their mouthpiece, were confident that they could continue to use the alliance with the CP and SP to their own advantage. Fortified by increasing support from the big bourgeoisie (including <strong>Le Temps</strong>)</p>
<p>they have so far kept the upper hand as against the so-called right wing, led by Caillaux, Bonnet and Delbos, who want to break with the CP and form a center government with Flandin, Laval and Co., more or less on the model of the old “cartel” governments.</p>
<p>The People’s Front has entered its stage of permanent crisis. The government must more and more function openly for what it is – the conscious instrument by which the bourgeoisie maintains its oppression of the masses. That is the real significance of the communiqué of Oct. 2. What else can it mean when “the government recalls to all citizens the necessity for public order and social discipline,” when it makes an appeal to the workers “to renounce definitely ... all occupation of factories,” when it is “resolved to put an end to the agitations and activities of certain foreigners on the soil of the republic”? All the parties of the People’s Front are afraid of one thing above all – that the workers will become fed up with the continued treachery of the People’s Front and will take matters into their own hands again, as they did in the glorious days of June 1936. That is why all the various proposals, contradictory and self-contradictory as they are, must yield before the imperative necessity for the French bourgeoisie to complete the establishment of <em>l’union sacrèe</em>, the national unity which will permit them to enter the coming war without any internal dissension at home.</p>
<p>The cantonal elections are important only insofar as they will elect the people who will then elect the members of the Senate. Undoubtedly, they will witness a “victory” for the People’s Front, especially for the Stalinists, now the strongest single party in France. Apropos of the Senate, it is necessary to recall that part of the new program of the SP, published after the Marseilles Congress, was for the reform of the Senate. When I asked Maurice Paz, member of the CAP and authoritative spokesman for Blum, “How can you expect the Radicals to carry out your new program, when the first program hasn’t been carried out,’’ he replied: “If the Radicals don’t accept our new program, we must then finish the first program.” Somewhat perplexed by this “logic,” I took my question to Jean Longuet, grandson of Karl Marx and an important cog in the reformist bureaucracy. This worthy stated quite baldly: “We have entered into an alliance with the Radicals. This entails certain responsibilities on our part, which we must be prepared to carry out.” Such is the leadership that the French workers have today!<br>
</p>
<h4>Sharp Struggles Ahead</h4>
<p class="fst">What a picture France presents today! The crisis is evident. Mass revolutionary leadership does not yet exist. The fascist movement is divided within itself and not yet prepared to take power. The bourgeoisie continually lower the standard of living of the workers by depreciating the franc, and incidentally weaken the position of the government as the elections approach. Hundreds of workers and peasants are being massacred in the French colonies, in Indo-China, in Algeria, in Morocco. Bonapartism rears its ugly head. Bourgeois democracy has outlived its historical usefulness. The counter-revolution is being prepared behind the backs of the People’s Front.</p>
<p>The results of the elections can only intensify the crisis. If the workers enter the path of direct class struggle action in the near future, the bourgeoisie may be forced to rely upon a Blum-Thorez government to strangle the revolutionary initiative of the masses. Otherwise, if war does not intervene, the government may witness a steady drift to the right. In any case, complicated as the French political scene is, we do not hesitate to predict that Chautemps will fall in the not-too-distant future and that the French workers will be face to face with a ferocious reaction, wielded by the Stalinists, militarists or fascists, or any combination of the three. No, the course has not been altered by the French cabinet! It is simply that the French bourgeoisie are preparing for tomorrow. Will the workers be ready?</p>
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Frank L. Demby
New Crisis Hits People’s Front Gov’t in France
(October 1937)
From Socialist Appeal, Vol. 1 No. 9, 9 October 1937, pp. 1 & 6.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The rapidly approaching cantonal elections and the October 2 communiqué of the French cabinet serve once again to focus the eyes of the politically conscious on France. The long-smouldering crisis bids fair to break out into the open with far-reaching consequences for France and the entire world. P.J. Philip, Paris correspondent of the New York Times, describes the recent cabinet meeting as having “altered the whole course along which France has been traveling since the Popular Front Government came into power fifteen months ago.”
Signs of the coming crisis and indications as to its nature have not been lacking. Already, during the last months of the Blum cabinet, it was not difficult to see that the major political parties in the Peoples Front were being subjected to different social pressures, which, together with the exigencies of diplomacy and political maneuvering, were tending to pull the People’s From apart – or, at least, sufficed to show that the honeymoon period was over.
The Radicals, conscious instrument of French finance imperialism, have steadily pulled in the direction of a Bonapartist regime – at first, due chiefly to the requirements of foreign policy (alliance with England, strangling of the Spanish Revolution, rapprochement with Germany), but soon the internal situation (especially financial) forced the Senate (dominated toy the Radicals) to kick over the traces and to replace the Blum cabinet by the Chautemps cabinet. In between, the SP has been trying to make the class-collaborationist policy of the People’s Front palatable to the workers and to maintain harmony within its own ranks.
In any case, if one doubts the depth of the dissension within the Peoples Front, or, perhaps even the existence of a crisis, the smoke that has not ceased to obscure the political skies since the coming to power of Chautemps leaves little doubt as to the existence of the crisis, and, to -a lesser extent, of its nature.
Socialists Continue Old Line
The National Congress of the SP at Marseilles (July 10–14) openly revealed the crisis. Coming on top of a postponement which facilitated the CAP (Permanent Administrative Committee) in making the decision to support the Chautemp cabinet, after having cracked down on the youth by dissolving the Seine Federation and its paper, La Jeune Garde, and expelling the youth leaders, after having illegalized Pivert’s “Revolutionary Left”, there was bound to be fireworks and the Blum-Faure bureaucracy had to exert all its bureaucratic pressure to maintain its majority. But little did anyone think that the “Socialist” government bureaucracy would be so hard-pressed to maintain its majority, nor that there would be such violent incidents as the fist-fights and other turbulent scenes that many times threatened actually to stop the proceedings.
The most interesting aspect of the Congress was undoubtedly the existence of the three tendencies – Blum-Faure, Zyromski-Bracke and Pivert. To be sure, there was no opposition to the People’s Front in principle – all such opposition having already been expelled or thoroughly squelched. The differences of opinions, therefore, all took place within the framework of class-collaboration, and are, at most, the differences between reformism and centrism. The actions of the first People’s Front Government, “under Socialist leadership,” were overwhelmingly approved by 4,549 to 26.
The major debate, front page news throughout the country, was over the Blum-Faure motion to continue participation in the Chautemps cabinet. It was carried after a tumultuous session by 3,484 mandates against 1,866. The differences became clear, however, only on the debate over general policy, which included perspectives for the future of the party. Blum-Faure again carried the day for their outright reformist policy, receiving 2,949 mandates. Zyromski-Bracke received 1,545 mandates for their positions, which was to support Chautemps but to prepare immediately for the replacement of Chautemps by another Blum cabinet. In the words of Zyromski: “The Chautemps government is not in the image of the People’s Front, but is a poor substitute (ersatz) for a People’s Front Government.” Pivert indignantly denied that he was a “Trotskyite” and proposed a “fighting government” – i.e., the formation of another Blum government immediately, for which he received 894 mandates. The victory of the right-wing bureaucracy was sealed with the election of the new CAP, on which there are 18 supporters of Blum-Faure, 9 of Zyromski-Bracke and 6 of Pivert.
The Stalinists, having toyed with the slogan of “Thorez to power” (Thorez being the General Secretary of the CP and its outstanding leader at present) on July 14th, were the next to cause the political pulse to rise when, on July 29th, L’Humanité (official organ of the CP) ran a front-page editorial for the immediate consummation of organic unity. “The workers want the united party. It was a mistake to have split in 1920.” All this of course, with one eye cocked on the cantonal elections; for, under the French system of run-off elections and the People’s Front agreements organic unity would mean that the unified party (which the Stalinists would be sure to dominate as they have in Catalonia in the case of the PSUC) would gain at the expense of the Radicals.
Radicals Divided
The Radicals, themselves, were meanwhile being torn in two. The so-called left wing, dominated by Daladier-Herriot and using the notorious Chautemps, of Stavisky scandal fame, as their mouthpiece, were confident that they could continue to use the alliance with the CP and SP to their own advantage. Fortified by increasing support from the big bourgeoisie (including Le Temps)
they have so far kept the upper hand as against the so-called right wing, led by Caillaux, Bonnet and Delbos, who want to break with the CP and form a center government with Flandin, Laval and Co., more or less on the model of the old “cartel” governments.
The People’s Front has entered its stage of permanent crisis. The government must more and more function openly for what it is – the conscious instrument by which the bourgeoisie maintains its oppression of the masses. That is the real significance of the communiqué of Oct. 2. What else can it mean when “the government recalls to all citizens the necessity for public order and social discipline,” when it makes an appeal to the workers “to renounce definitely ... all occupation of factories,” when it is “resolved to put an end to the agitations and activities of certain foreigners on the soil of the republic”? All the parties of the People’s Front are afraid of one thing above all – that the workers will become fed up with the continued treachery of the People’s Front and will take matters into their own hands again, as they did in the glorious days of June 1936. That is why all the various proposals, contradictory and self-contradictory as they are, must yield before the imperative necessity for the French bourgeoisie to complete the establishment of l’union sacrèe, the national unity which will permit them to enter the coming war without any internal dissension at home.
The cantonal elections are important only insofar as they will elect the people who will then elect the members of the Senate. Undoubtedly, they will witness a “victory” for the People’s Front, especially for the Stalinists, now the strongest single party in France. Apropos of the Senate, it is necessary to recall that part of the new program of the SP, published after the Marseilles Congress, was for the reform of the Senate. When I asked Maurice Paz, member of the CAP and authoritative spokesman for Blum, “How can you expect the Radicals to carry out your new program, when the first program hasn’t been carried out,’’ he replied: “If the Radicals don’t accept our new program, we must then finish the first program.” Somewhat perplexed by this “logic,” I took my question to Jean Longuet, grandson of Karl Marx and an important cog in the reformist bureaucracy. This worthy stated quite baldly: “We have entered into an alliance with the Radicals. This entails certain responsibilities on our part, which we must be prepared to carry out.” Such is the leadership that the French workers have today!
Sharp Struggles Ahead
What a picture France presents today! The crisis is evident. Mass revolutionary leadership does not yet exist. The fascist movement is divided within itself and not yet prepared to take power. The bourgeoisie continually lower the standard of living of the workers by depreciating the franc, and incidentally weaken the position of the government as the elections approach. Hundreds of workers and peasants are being massacred in the French colonies, in Indo-China, in Algeria, in Morocco. Bonapartism rears its ugly head. Bourgeois democracy has outlived its historical usefulness. The counter-revolution is being prepared behind the backs of the People’s Front.
The results of the elections can only intensify the crisis. If the workers enter the path of direct class struggle action in the near future, the bourgeoisie may be forced to rely upon a Blum-Thorez government to strangle the revolutionary initiative of the masses. Otherwise, if war does not intervene, the government may witness a steady drift to the right. In any case, complicated as the French political scene is, we do not hesitate to predict that Chautemps will fall in the not-too-distant future and that the French workers will be face to face with a ferocious reaction, wielded by the Stalinists, militarists or fascists, or any combination of the three. No, the course has not been altered by the French cabinet! It is simply that the French bourgeoisie are preparing for tomorrow. Will the workers be ready?
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<h2>T.N. Vance</h2>
<h4>Notes of the Quarter</h4>
<h1>The Eisenhower Recession</h1>
<h4>The Causes and Depth of the Economic Decline</h4>
<h3>(March 1958)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">T.N. Vance, <em>The Eisenhower Recession</em>, <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni58win" target="new">Vol. XXIV No. 1</a>, Winter 1958, pp. 3–9.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">What kind of recession? It is now clear that the Eisenhower recession is no mild, inventory adjustment. In six months, from August 1957 to February 1958, the Federal Reserve Index of industrial production has declined from 145 to 130 – a decrease of more than 10 per cent. Unemployment in February is officially placed at 5,173,000 – an increase of about two million in six months, placing official unemployment at the highest post-World War II level, exceeding by an appreciable amount the 4,700,000 reached in 1949-1950, prior to the break of the Korean war. Steel production is at 52.4 per cent of capacity against 93.5 per cent a year ago. Weekly steel production is currently at 1,415,000 tons – almost a million tons a week less than a year ago. Motor vehicle production is running at 101,266 units a week, compared with 161,865 vehicles in the comparable week 1957. Oil production and freight car loadings are off substantially. In fact, all durables show a 10 per cent decline from February, 1957 to February 1958, with consumer durables down 20 per cent. Business failures are way up, and the pressures for the Federal government to “do something” are increasing daily from virtually every class and every segment of society.</p>
<p>It appears likely that March figures will show further declines. Aside from <strong>Fortune</strong> magazine and certain other Republican spokesmen for the big bourgeoisie, most analysts and commentators are ready to concede that this is the most serious post-war recession (in fact, before public relations became the chief science of government, this would have been called a depression) and that there will be no immediate upturn. Writes a <strong>New York Times</strong> financial columnist in the issue of March 23rd: “As the week ended, it was clear that the recession was still in progress, though slowing perhaps. While some of the key economic indicators are still sharply depressed from year-ago levels, their recent rates of decline have slackened. This has led to the belief in some quarters that a ‘bottoming-out’ of the downtrend might be imminent. But <em>little hope is held for any marked up-turn before the fourth quarter of this year or early 1959</em>.” (Italics mine – <em>T.N.V.</em>)</p>
<p>To be sure, this is <em>not</em> 1929–1933, but it is also <em>not</em> 1948–1949 nor 1953–1954. One should not forget that the recession of 1948–1949 was undoubtedly cut short by the timely (from an economic point of view) arrival of the Korean war. And the recession of 1953-1954 was probably held to minimum duration by the passage of the “tax swindle” Revenue Act of 1954 providing, among other things, for accelerated depreciation. It is also an open secret that major forces within the Eisenhower administration preferred to ignore the signs that the economy was softening and attempted, through strict credit controls and high interest rates, to induce a “little” depression.</p>
<p>The big bourgeoisie, whose captive Eisenhower is, has simply been pursuing the class struggle in its own interests. As we said in our article in the Summer 1957 issue of <strong>The New International</strong> (p. 178): “The big bourgeoisie demand a halt to inflation, or rather they use the concern of the working classes to prevent inflation as a device for getting the government to raise interest rates and to place a squeeze on small and medium-size business.” It goes without saying that among the calculations of big capital is the expectation that a working class with 5,000,000 or so unemployed will be more docile and its unions more “amenable to common sense” when negotiations for new contracts take place.</p>
<p>Like a breath of clean fresh air, the Eisenhower recession has suddenly swept away all the nonsense about capitalism having achieved “permanent prosperity.” It is clear that the Eisenhower recession is a major cyclical downturn in the epoch of the Permanent War Economy. Its severity is not to be compared with the Great Depression of the 1930’s, but only because capitalism has entered a new stage, which we have named the Permanent War Economy. As we forecast at the conclusion of our previously-quoted article in the Summer 1957 issue of <strong>The New International</strong>: “The impossibility of continuing to expand in all three departments of production will lead to a deteriorating economic situation and in the relatively near future to the beginnings of a first-rate political crisis.” The deteriorating economic situation is at hand and the political crisis is about to unfold.<br>
</p>
<h2>II</h2>
<p class="fst">What has happened to the war outlays ratio? In the epoch of the Permanent War Economy stage of capitalism, a prime mover becomes the ratio of war outlays to total production, as we have explained on numerous occasions in these pages. In our article in the Summer, 1957 issue, we presented up-to-date calculations, from which we extract merely the ratio of war outlays to total production from its peak in 1952 through 1956:</p>
<table align="center" cellspacing="1" cellpadding="1">
<tbody><tr>
<th colspan="3">
<p class="smc">Ratio of War Outlays to Total Production</p>
</th>
</tr>
<tr>
<td>
<p class="smc"><em>Year</em></p>
</td>
<td rowspan="6">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Ratio %</em></p>
</td>
</tr>
<tr>
<td>
<p class="smc">1952</p>
</td>
<td>
<p class="smc">16.9</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1953</p>
</td>
<td>
<p class="smc">16.8</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1954</p>
</td>
<td>
<p class="smc">14.5</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1955</p>
</td>
<td>
<p class="smc">13.0</p>
</td>
</tr>
<tr>
<td>
<p class="smc">1956</p>
</td>
<td>
<p class="smc">12.7</p>
</td>
</tr>
</tbody></table>
<p class="fst">We estimate that this crucial ratio remained the same in 1957 as in 1956, namely, 12.7 per cent. How, then, could there have been such a sharp decline taking place during the latter part of 1957? A year, of course, is a rather long period of time and such a unit of measure tends to blunt the cyclical fluctuations. These can be seen by examining quarterly movements within the economy, as is also the case for the overall picture of economy.</p>
<p>Gross national product, for example for the year 1957 (see the February 1958 issue of the <strong>Survey of Current Business</strong>) is estimated at $434.4 billion almost a five per cent increase in prices over the $414.7 billion figure of 1956. To be sure, practically all the increase represents the inflation in prices, but the fact is that for the year as a whole 1957 set a production peak. 1958, of course, will be another story. Yet, if one examines the quarterly movements, the steady upward trend reached its peak in the third quarter, with GNP at a seasonally adjusted annual rate of $440 billion, declining in the fourth quarter to a level of $432.6 billion. We can thus pinpoint, so far as gross national product is concerned, the third quarter of 1957 as the start of the Eisenhower recession. And August appears to be the month in which most meaningful indexes turned downwards.</p>
<p>If we examine the ratio of war out-lays to total production in 1957 by quarters, we obtain the following picture (using estimates of the Department of Commerce, in accordance with methods set forth in the Summer 1957 and March–April 1953 issues of <strong>The New International</strong>):</p>
<table align="center" cellspacing="1" cellpadding="1">
<tbody><tr>
<th colspan="4">
<p class="smc">1957 Quarterly Ratios of War Outlays<br>
to Total Production</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">I</p>
</td>
<td>
<p class="sm1">Quarter</p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc">12.9%</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">II</p>
</td>
<td>
<p class="sm1">Quarter</p>
</td>
<td>
<p class="smc">13.0%</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">III</p>
</td>
<td>
<p class="sm1">Quarter</p>
</td>
<td>
<p class="smc">12.5%</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">IV</p>
</td>
<td>
<p class="sm1">Quarter</p>
</td>
<td>
<p class="smc">12.5%</p>
</td>
</tr>
</tbody></table>
<p class="fst">Thus, a decline of about four per cent took place in the war outlays ratio between the second and third quarters of 1957. The decline was based on the planned reduction in war outlays by the Eisenhower administration, under the influence of the budget-cutting drive spearheaded by big business organizations and representatives. This, of course, occurred at a time when total output was still increasing and helped to bring about the end of the boom and the beginning of the recession. A war outlays ratio of 12.5 per cent brings us back almost to the pre-Korean level and materially weakens one of the major sustaining props under the economy.</p>
<p>As was to be expected, the Kremlin came to the rescue of sorely beleaguered American capitalism with the Sputnik and the manner in which it was launched. Immediately, the budget-cutting drive ceased and an increase in “defense” expenditures was sanctioned by <em>all</em> classes in American society. The difficulty is that the Federal bureaucracy is a ponderous machine and it takes time for it to move. It will still be several months, before the planned increase in war outlays will be realized in the form of increased production and employment.</p>
<p>Meanwhile, the clamor for immediate action steadily increases. A tremendous debate has arisen between the advocates of increased public expenditures (in which camp are most of the leading Democrats) and the supporters of an immediate tax cut (in which camp are a number of Republican leaders). Many Republicans, of course, still favor doing nothing; and the Administration has stated that it will wait another month before deciding whether <em>special</em> government intervention measures are required.</p>
<p>In this connection, it is interesting to note the position of Professor Arthur F. Burns, formerly Eisenhower’s chief economic advisor. He stated in a speech delivered in Chicago on March 22, and reported in <strong>The New York Times</strong> of March 23, 1958: “If, on the other hand, we delay more than a very few weeks, in the hope that economic recovery will come on its own by midyear, we shall be taking the risk of having to resort later to drastic medicine.” Burns, it should be noted, is on record as favoring an <em>immediate and permanent</em> “broadly based” $5 billion tax cut.</p>
<p>While a tax cut does not possess the “multiplier” effects of an increase in the war outlays ratio, it can have some hypodermic effect, depending on the nature and size of the tax cut. Neither approach, by itself, carries any promise of arresting the decline in capital accumulation – and it is this, more than any other factor, that bothers the more knowledgeable defenders of the bourgeoisie when they glibly predict that the recession will be of short duration.<br>
</p>
<h2>III</h2>
<p class="fst">Why the decline in capital accumulation? The figures on capital formation or accumulation always leave much to be desired. Nevertheless, the present trends are unmistakably clear and disputed by no one. Capital accumulation turned downward in 1957 and will continue downward throughout 1958.</p>
<p>If we take the figures on gross private domestic investment in constant (1947) dollars of the Department of Commerce, we get the following totals:</p>
<table align="center" cellspacing="1" cellpadding="1">
<tbody><tr>
<td colspan="3">
<p class="smc"><strong>Gross Private Domestic Investment</strong><br>
(in Billions of 1947 Dollars)</p>
</td>
</tr>
<tr>
<td>
<p class="sm1"><em>Year</em></p>
</td>
<td rowspan="6">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Billions of Dollars</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953</p>
</td>
<td>
<p class="smc">38.5</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1954</p>
</td>
<td>
<p class="smc">37.9</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1955</p>
</td>
<td>
<p class="smc">46.6</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1956</p>
</td>
<td>
<p class="smc">47.6</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1957</p>
</td>
<td>
<p class="smc">44.4</p>
</td>
</tr>
</tbody></table>
<p class="fst">Here, the effects of the accelerated depreciation provisions of the Revenue Act of 1954 are apparent in 1955 and 1956. Yet, a decline of almost seven per cent set in 1957, and all forecasts for 1958 reveal the expectation of further and sharper declines.</p>
<p>If we confine ourselves to plant and equipment expenditures, the most decisive portion of capital accumulation, we find a dramatic rise from $26 billion in 1954 to over $37 billion in 1957. Yet, here, too, the quarterly analysis of 1957 figures shows a decline from a third quarter seasonally adjusted annual total of $37.75 billion to a fourth quarter level of $37.47 with a sharp decline expected to be shown once the first quarter of figures become available.</p>
<p>The economic crisis is revealed, above all, in the sudden decision of capitalists to forego planned investments in plant expansion or decision of big corporations to reduce sharply expenditures for new plant and equipment. It is as if all of a sudden the capitalist class, or at least large segments of it, has reached the conclusion that present capacity is more than ample to take care of existing demand. In this respect, <em>the Eisenhower recession is typical of a classical capitalist depression, albeit it takes place in a different epoch and with the economy operating at very high levels</em>.</p>
<p>The fact is, however, that this is a durable goods crisis. In virtually every such industry, idle capacity under capitalist conditions of production exists. In some cases, such as the railroads, the industry is permanently sick and an intelligent bourgeois would take the lead in favoring nationalization. The American bourgeoisie, however, especially its Republican wing, is so immersed in the fetishism of private capital that it will drive some of its leading elements to suicide rather than permit its state to socialize the losses of an important basic industry.</p>
<p>Having accelerated depreciation allowances over the last three years thereby borrowing from future capital accumulation, the bourgeoisie is in a quandary. Another “gimmick” of this nature is not in the cards, although watch for certain advocates of a tax cut to stress the “necessity to provide a stimulus for investment, for those who make jobs.” And with capital accumulation in a state of obvious decline, the only real remedy that the bourgeoisie has is to increase government expenditures, which again brings them face to face with the fetishism of private capital that dominates especially the more Republican sections of the bourgeoisie. Hence, the indecision of the Eisenhower administration, and its plaintive hope that by postponing a decision as to a tax cut or sizable increase in government expenditures, or both, the economy will suddenly right itself, thereby avoiding the necessity of a decision.<br>
</p>
<h2>IV</h2>
<p class="fst">What about the built-in stabilizers? The answer is that despite much room for further improvement, above all the need to increase the amount of unemployment insurance and its duration, as well as other aspects of government – supported purchasing power, the built-in stabilizers have worked. An interesting and essentially correct article on this subject appears in the <em>Review of the Week</em> section <strong>The New York Times</strong> of March 23, 1958 by economics reporter Edwin L. Dale, Jr. Comparing the postwar slumps with that of 1929, aside from the fact that the decline in production was greater and more severe in 1929, Dale properly points out that the main difference has been that personal income, due to the built-in stabilizers, has declined much less. He puts it this way:</p>
<p class="quoteb">In 1929–30, personal income fell off about 8 per cent in the first seven months of the slump. This meant a sharp and severe drop in purchasing power.</p>
<p class="quote">Since that time there have been added unemployment compensation, other social security payments affecting mainly the aged and farm price supports. These “income cushions,” otherwise known as built-in stabilizers, have worked beautifully in the postwar slumps.</p>
<p class="quote">Compared with the 8 per cent decline in personal income in 1929–30, the decline in 1948–49’s first seven months was 3.1 per cent, while in 1953–54 it was 1.9 per cent and 1.3 per cent in 1957–58. This means that purchasing power in each postwar slump has fallen far less than production and considerably less than employment.</p>
<p class="fst">Of course, without the development of the Permanent War Economy, these built-in stabilizers would be helpless to stem the tide of recession. By themselves, unemployment insurance and other purchasing power supplements would be relatively powerless and, as in the case of Germany under the Weimar Republic, would simply be swept away by a desperate and impoverished middle class driven to the support of fascism.</p>
<p>That Dale is not so sure of the outlook can be seen from the conclusion of his article:</p>
<p class="quoteb">This postwar experience is an illustration of why the present situation is such a difficult one. True, the gods have once again provided a lucky break – the post-Sputnik increase in defense spending.</p>
<p class="quote"><em>But there is real doubt that this will be enough. Hence the widespread belief that this recession is providing much the most severe test of whether modern American governments can and will take the right actions to cure successfully a serious slump</em>. (Italics mine – <em>T.N.V.</em>)<br>
</p>
<h2>V</h2>
<p class="fst">Whose anti-recession program and for whom? The significant fact is that the Eisenhower administration, despite its being the creation of the fetishists of private capital, has already taken governmental action to try to stem the tide of recession. The government has lowered the rate of interest, through its control of the money markets, and attempted to ease credit. It is clear that these actions by themselves will not suffice. Certain foreign economic measures, as well as certain military expenditures, are presented as necessary to stimulate economic recovery, a tactic that riles the more orthodox Republicans. Gestures are being made in the direction of trying to persuade the states to extend the period of unemployment insurance benefits. All this is a far cry from the last Republican administration under Hoover. Naturally, the Democrats do not suffer nearly to the same degree from the fetishism of private capital, and hence (especially as an opposition political party) they are developing all kinds of proposals for large-scale public expenditures.</p>
<p>Since the most optimistic economic forecast merely hopes for a leveling off at the bottom during the second quarter and perhaps a slight upturn by the end of 1958, and since 1958 is an election year, it is quite apparent that there will be some type of tax cut in 1958, possibly a temporary one along the lines of the Committee for Economic Development proposal. Naturally, any flat percentage tax cut will be of greater benefit to the upper income groups than to the lower.</p>
<p>As always, when major economic policy questions become matters of practical politics, the class struggle has an ugly habit of intruding itself, to the despair of the “classless patriots.” A tax cut can have art immediate effect, but the question of “for whom?” is most relevant. Instead of the trade-union movement making pious representations to Eisenhower, it is time that labor developed a hard-hitting political-economic program, divorced from both the Democrats and Republicans. Among the planks that such a program ought to include are the following:</p>
<ol type="A">
<li>Developing the responsibility of society for the existence of unemployment and the support of the unemployed by raising benefits to a minimum of one-half of the previous wage and increasing the duration of unemployment insurance benefits from the present maximum of 26 weeks to 35 weeks. A program of this type should be financed by a capital levy (five per cent would be more than adequate on all aggregates of private capital in excess of one million dollars.<br>
</li>
<li>Nationalizing those industries whose output is essential to the public welfare and which can no longer be operated profitably under private capital. The starting point should be the railroads, with an immediate perspective of including all interstate transportation.<br>
</li>
<li>A large-scale public Works program, starting at $5 billion for the first year, to help build such institutions as schools, hospitals, roads etc.<br>
</li>
<li>Take the profit out of war industry by limiting profits to a maximum return of six per cent on invested capital. Nationalize those industries whose output is 100 per cent for military purposes.<br>
</li>
<li>Reducing Federal personal income taxes by increasing the dependency credit from $600 per dependent to $900, thereby eliminating the lower income groups from the burden of Federal income taxation, and making the existing burden more equitable than at present.</li>
</ol>
<p class="fst">There are other measures that unionists and socialists could advocate. The important point, however is that the pressure of the unemployed and the rank and file on the trade union leadership is bound to increase. As these economic pressures develop and the longer the Eisenhower recession lasts, the more powerful will the pressures become, the sooner will become apparent to broad sections of the American working class that only through class political action can even the most elementary of economic demands be satisfied. The forthcoming political crisis will usher in a period of regroupment of political forces among all classes. Now is the time for labor to lay the foundations of independent political action!</p>
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<p> </p>
</td>
<td>
<p class="fst"><em>T.N. Vance</em><br>
March 1958</p>
</td>
</tr>
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T.N. Vance
Notes of the Quarter
The Eisenhower Recession
The Causes and Depth of the Economic Decline
(March 1958)
T.N. Vance, The Eisenhower Recession, The New International, Vol. XXIV No. 1, Winter 1958, pp. 3–9.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
What kind of recession? It is now clear that the Eisenhower recession is no mild, inventory adjustment. In six months, from August 1957 to February 1958, the Federal Reserve Index of industrial production has declined from 145 to 130 – a decrease of more than 10 per cent. Unemployment in February is officially placed at 5,173,000 – an increase of about two million in six months, placing official unemployment at the highest post-World War II level, exceeding by an appreciable amount the 4,700,000 reached in 1949-1950, prior to the break of the Korean war. Steel production is at 52.4 per cent of capacity against 93.5 per cent a year ago. Weekly steel production is currently at 1,415,000 tons – almost a million tons a week less than a year ago. Motor vehicle production is running at 101,266 units a week, compared with 161,865 vehicles in the comparable week 1957. Oil production and freight car loadings are off substantially. In fact, all durables show a 10 per cent decline from February, 1957 to February 1958, with consumer durables down 20 per cent. Business failures are way up, and the pressures for the Federal government to “do something” are increasing daily from virtually every class and every segment of society.
It appears likely that March figures will show further declines. Aside from Fortune magazine and certain other Republican spokesmen for the big bourgeoisie, most analysts and commentators are ready to concede that this is the most serious post-war recession (in fact, before public relations became the chief science of government, this would have been called a depression) and that there will be no immediate upturn. Writes a New York Times financial columnist in the issue of March 23rd: “As the week ended, it was clear that the recession was still in progress, though slowing perhaps. While some of the key economic indicators are still sharply depressed from year-ago levels, their recent rates of decline have slackened. This has led to the belief in some quarters that a ‘bottoming-out’ of the downtrend might be imminent. But little hope is held for any marked up-turn before the fourth quarter of this year or early 1959.” (Italics mine – T.N.V.)
To be sure, this is not 1929–1933, but it is also not 1948–1949 nor 1953–1954. One should not forget that the recession of 1948–1949 was undoubtedly cut short by the timely (from an economic point of view) arrival of the Korean war. And the recession of 1953-1954 was probably held to minimum duration by the passage of the “tax swindle” Revenue Act of 1954 providing, among other things, for accelerated depreciation. It is also an open secret that major forces within the Eisenhower administration preferred to ignore the signs that the economy was softening and attempted, through strict credit controls and high interest rates, to induce a “little” depression.
The big bourgeoisie, whose captive Eisenhower is, has simply been pursuing the class struggle in its own interests. As we said in our article in the Summer 1957 issue of The New International (p. 178): “The big bourgeoisie demand a halt to inflation, or rather they use the concern of the working classes to prevent inflation as a device for getting the government to raise interest rates and to place a squeeze on small and medium-size business.” It goes without saying that among the calculations of big capital is the expectation that a working class with 5,000,000 or so unemployed will be more docile and its unions more “amenable to common sense” when negotiations for new contracts take place.
Like a breath of clean fresh air, the Eisenhower recession has suddenly swept away all the nonsense about capitalism having achieved “permanent prosperity.” It is clear that the Eisenhower recession is a major cyclical downturn in the epoch of the Permanent War Economy. Its severity is not to be compared with the Great Depression of the 1930’s, but only because capitalism has entered a new stage, which we have named the Permanent War Economy. As we forecast at the conclusion of our previously-quoted article in the Summer 1957 issue of The New International: “The impossibility of continuing to expand in all three departments of production will lead to a deteriorating economic situation and in the relatively near future to the beginnings of a first-rate political crisis.” The deteriorating economic situation is at hand and the political crisis is about to unfold.
II
What has happened to the war outlays ratio? In the epoch of the Permanent War Economy stage of capitalism, a prime mover becomes the ratio of war outlays to total production, as we have explained on numerous occasions in these pages. In our article in the Summer, 1957 issue, we presented up-to-date calculations, from which we extract merely the ratio of war outlays to total production from its peak in 1952 through 1956:
Ratio of War Outlays to Total Production
Year
Ratio %
1952
16.9
1953
16.8
1954
14.5
1955
13.0
1956
12.7
We estimate that this crucial ratio remained the same in 1957 as in 1956, namely, 12.7 per cent. How, then, could there have been such a sharp decline taking place during the latter part of 1957? A year, of course, is a rather long period of time and such a unit of measure tends to blunt the cyclical fluctuations. These can be seen by examining quarterly movements within the economy, as is also the case for the overall picture of economy.
Gross national product, for example for the year 1957 (see the February 1958 issue of the Survey of Current Business) is estimated at $434.4 billion almost a five per cent increase in prices over the $414.7 billion figure of 1956. To be sure, practically all the increase represents the inflation in prices, but the fact is that for the year as a whole 1957 set a production peak. 1958, of course, will be another story. Yet, if one examines the quarterly movements, the steady upward trend reached its peak in the third quarter, with GNP at a seasonally adjusted annual rate of $440 billion, declining in the fourth quarter to a level of $432.6 billion. We can thus pinpoint, so far as gross national product is concerned, the third quarter of 1957 as the start of the Eisenhower recession. And August appears to be the month in which most meaningful indexes turned downwards.
If we examine the ratio of war out-lays to total production in 1957 by quarters, we obtain the following picture (using estimates of the Department of Commerce, in accordance with methods set forth in the Summer 1957 and March–April 1953 issues of The New International):
1957 Quarterly Ratios of War Outlays
to Total Production
I
Quarter
12.9%
II
Quarter
13.0%
III
Quarter
12.5%
IV
Quarter
12.5%
Thus, a decline of about four per cent took place in the war outlays ratio between the second and third quarters of 1957. The decline was based on the planned reduction in war outlays by the Eisenhower administration, under the influence of the budget-cutting drive spearheaded by big business organizations and representatives. This, of course, occurred at a time when total output was still increasing and helped to bring about the end of the boom and the beginning of the recession. A war outlays ratio of 12.5 per cent brings us back almost to the pre-Korean level and materially weakens one of the major sustaining props under the economy.
As was to be expected, the Kremlin came to the rescue of sorely beleaguered American capitalism with the Sputnik and the manner in which it was launched. Immediately, the budget-cutting drive ceased and an increase in “defense” expenditures was sanctioned by all classes in American society. The difficulty is that the Federal bureaucracy is a ponderous machine and it takes time for it to move. It will still be several months, before the planned increase in war outlays will be realized in the form of increased production and employment.
Meanwhile, the clamor for immediate action steadily increases. A tremendous debate has arisen between the advocates of increased public expenditures (in which camp are most of the leading Democrats) and the supporters of an immediate tax cut (in which camp are a number of Republican leaders). Many Republicans, of course, still favor doing nothing; and the Administration has stated that it will wait another month before deciding whether special government intervention measures are required.
In this connection, it is interesting to note the position of Professor Arthur F. Burns, formerly Eisenhower’s chief economic advisor. He stated in a speech delivered in Chicago on March 22, and reported in The New York Times of March 23, 1958: “If, on the other hand, we delay more than a very few weeks, in the hope that economic recovery will come on its own by midyear, we shall be taking the risk of having to resort later to drastic medicine.” Burns, it should be noted, is on record as favoring an immediate and permanent “broadly based” $5 billion tax cut.
While a tax cut does not possess the “multiplier” effects of an increase in the war outlays ratio, it can have some hypodermic effect, depending on the nature and size of the tax cut. Neither approach, by itself, carries any promise of arresting the decline in capital accumulation – and it is this, more than any other factor, that bothers the more knowledgeable defenders of the bourgeoisie when they glibly predict that the recession will be of short duration.
III
Why the decline in capital accumulation? The figures on capital formation or accumulation always leave much to be desired. Nevertheless, the present trends are unmistakably clear and disputed by no one. Capital accumulation turned downward in 1957 and will continue downward throughout 1958.
If we take the figures on gross private domestic investment in constant (1947) dollars of the Department of Commerce, we get the following totals:
Gross Private Domestic Investment
(in Billions of 1947 Dollars)
Year
Billions of Dollars
1953
38.5
1954
37.9
1955
46.6
1956
47.6
1957
44.4
Here, the effects of the accelerated depreciation provisions of the Revenue Act of 1954 are apparent in 1955 and 1956. Yet, a decline of almost seven per cent set in 1957, and all forecasts for 1958 reveal the expectation of further and sharper declines.
If we confine ourselves to plant and equipment expenditures, the most decisive portion of capital accumulation, we find a dramatic rise from $26 billion in 1954 to over $37 billion in 1957. Yet, here, too, the quarterly analysis of 1957 figures shows a decline from a third quarter seasonally adjusted annual total of $37.75 billion to a fourth quarter level of $37.47 with a sharp decline expected to be shown once the first quarter of figures become available.
The economic crisis is revealed, above all, in the sudden decision of capitalists to forego planned investments in plant expansion or decision of big corporations to reduce sharply expenditures for new plant and equipment. It is as if all of a sudden the capitalist class, or at least large segments of it, has reached the conclusion that present capacity is more than ample to take care of existing demand. In this respect, the Eisenhower recession is typical of a classical capitalist depression, albeit it takes place in a different epoch and with the economy operating at very high levels.
The fact is, however, that this is a durable goods crisis. In virtually every such industry, idle capacity under capitalist conditions of production exists. In some cases, such as the railroads, the industry is permanently sick and an intelligent bourgeois would take the lead in favoring nationalization. The American bourgeoisie, however, especially its Republican wing, is so immersed in the fetishism of private capital that it will drive some of its leading elements to suicide rather than permit its state to socialize the losses of an important basic industry.
Having accelerated depreciation allowances over the last three years thereby borrowing from future capital accumulation, the bourgeoisie is in a quandary. Another “gimmick” of this nature is not in the cards, although watch for certain advocates of a tax cut to stress the “necessity to provide a stimulus for investment, for those who make jobs.” And with capital accumulation in a state of obvious decline, the only real remedy that the bourgeoisie has is to increase government expenditures, which again brings them face to face with the fetishism of private capital that dominates especially the more Republican sections of the bourgeoisie. Hence, the indecision of the Eisenhower administration, and its plaintive hope that by postponing a decision as to a tax cut or sizable increase in government expenditures, or both, the economy will suddenly right itself, thereby avoiding the necessity of a decision.
IV
What about the built-in stabilizers? The answer is that despite much room for further improvement, above all the need to increase the amount of unemployment insurance and its duration, as well as other aspects of government – supported purchasing power, the built-in stabilizers have worked. An interesting and essentially correct article on this subject appears in the Review of the Week section The New York Times of March 23, 1958 by economics reporter Edwin L. Dale, Jr. Comparing the postwar slumps with that of 1929, aside from the fact that the decline in production was greater and more severe in 1929, Dale properly points out that the main difference has been that personal income, due to the built-in stabilizers, has declined much less. He puts it this way:
In 1929–30, personal income fell off about 8 per cent in the first seven months of the slump. This meant a sharp and severe drop in purchasing power.
Since that time there have been added unemployment compensation, other social security payments affecting mainly the aged and farm price supports. These “income cushions,” otherwise known as built-in stabilizers, have worked beautifully in the postwar slumps.
Compared with the 8 per cent decline in personal income in 1929–30, the decline in 1948–49’s first seven months was 3.1 per cent, while in 1953–54 it was 1.9 per cent and 1.3 per cent in 1957–58. This means that purchasing power in each postwar slump has fallen far less than production and considerably less than employment.
Of course, without the development of the Permanent War Economy, these built-in stabilizers would be helpless to stem the tide of recession. By themselves, unemployment insurance and other purchasing power supplements would be relatively powerless and, as in the case of Germany under the Weimar Republic, would simply be swept away by a desperate and impoverished middle class driven to the support of fascism.
That Dale is not so sure of the outlook can be seen from the conclusion of his article:
This postwar experience is an illustration of why the present situation is such a difficult one. True, the gods have once again provided a lucky break – the post-Sputnik increase in defense spending.
But there is real doubt that this will be enough. Hence the widespread belief that this recession is providing much the most severe test of whether modern American governments can and will take the right actions to cure successfully a serious slump. (Italics mine – T.N.V.)
V
Whose anti-recession program and for whom? The significant fact is that the Eisenhower administration, despite its being the creation of the fetishists of private capital, has already taken governmental action to try to stem the tide of recession. The government has lowered the rate of interest, through its control of the money markets, and attempted to ease credit. It is clear that these actions by themselves will not suffice. Certain foreign economic measures, as well as certain military expenditures, are presented as necessary to stimulate economic recovery, a tactic that riles the more orthodox Republicans. Gestures are being made in the direction of trying to persuade the states to extend the period of unemployment insurance benefits. All this is a far cry from the last Republican administration under Hoover. Naturally, the Democrats do not suffer nearly to the same degree from the fetishism of private capital, and hence (especially as an opposition political party) they are developing all kinds of proposals for large-scale public expenditures.
Since the most optimistic economic forecast merely hopes for a leveling off at the bottom during the second quarter and perhaps a slight upturn by the end of 1958, and since 1958 is an election year, it is quite apparent that there will be some type of tax cut in 1958, possibly a temporary one along the lines of the Committee for Economic Development proposal. Naturally, any flat percentage tax cut will be of greater benefit to the upper income groups than to the lower.
As always, when major economic policy questions become matters of practical politics, the class struggle has an ugly habit of intruding itself, to the despair of the “classless patriots.” A tax cut can have art immediate effect, but the question of “for whom?” is most relevant. Instead of the trade-union movement making pious representations to Eisenhower, it is time that labor developed a hard-hitting political-economic program, divorced from both the Democrats and Republicans. Among the planks that such a program ought to include are the following:
Developing the responsibility of society for the existence of unemployment and the support of the unemployed by raising benefits to a minimum of one-half of the previous wage and increasing the duration of unemployment insurance benefits from the present maximum of 26 weeks to 35 weeks. A program of this type should be financed by a capital levy (five per cent would be more than adequate on all aggregates of private capital in excess of one million dollars.
Nationalizing those industries whose output is essential to the public welfare and which can no longer be operated profitably under private capital. The starting point should be the railroads, with an immediate perspective of including all interstate transportation.
A large-scale public Works program, starting at $5 billion for the first year, to help build such institutions as schools, hospitals, roads etc.
Take the profit out of war industry by limiting profits to a maximum return of six per cent on invested capital. Nationalize those industries whose output is 100 per cent for military purposes.
Reducing Federal personal income taxes by increasing the dependency credit from $600 per dependent to $900, thereby eliminating the lower income groups from the burden of Federal income taxation, and making the existing burden more equitable than at present.
There are other measures that unionists and socialists could advocate. The important point, however is that the pressure of the unemployed and the rank and file on the trade union leadership is bound to increase. As these economic pressures develop and the longer the Eisenhower recession lasts, the more powerful will the pressures become, the sooner will become apparent to broad sections of the American working class that only through class political action can even the most elementary of economic demands be satisfied. The forthcoming political crisis will usher in a period of regroupment of political forces among all classes. Now is the time for labor to lay the foundations of independent political action!
T.N. Vance
March 1958
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<h4><em>New International</em>, November 1938</h4>
<p> </p>
<h1>Correspondence 1</h1>
<p class="from">From <em>New International</em>, <a href="../../issue.htm#ni38_11" target="new">Vol. 4 No. 11</a>, November 1938, p. 351.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for ETOL.</p>
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<p class="c">(<em>Note:</em> Comrade Demby recently returned from a trip to Europe where he had an opportunity to observe the labor and revolutionary movement.)</p>
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<p class="fst">EVERY COMRADE in Europe, partisan of the Fourth International or even bitter opponent (excluding, of course, Stalinists) who can read English, reads <strong>The New International</strong> and eagerly awaits the next issue. What impressed me most was the universal acclaim with which <strong>The New International</strong> is received. It is everywhere regarded as the outstanding Marxist journal in the world. The comrades read it from cover to cover and discuss its contents. In fact, issues are passed around from one to the other and put to great service. I have seen comrades in most of the countries of Europe go without meals and pool their pennies in order to raise enough money for a subscription to <strong>The New International</strong>.</p>
<p>Considering the number of comrades and sympathizers who can read English, the circulation of <strong>The New International</strong> in Europe is certainly much higher than in the United States. Actually, it has done far more for increasing the prestige of the SWP than anything else we have done. Further, <strong>The New International</strong> is the best organizer that the Fourth International has. Not only individual comrades, but in some cases, entire groups have been won to the Fourth International on the basis of <strong>The New International</strong>, a copy of the magazine having found its way into their hands in some way or other. I only wish that our own comrades would appreciate <strong>The New International</strong> as much as the European comrades do, and as much as <strong>The New International</strong> deserves.</p>
<p class="author">Frank DEMBY</p>
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New International, November 1938
Correspondence 1
From New International, Vol. 4 No. 11, November 1938, p. 351.
Transcribed & marked up by Einde O’Callaghan for ETOL.
(Note: Comrade Demby recently returned from a trip to Europe where he had an opportunity to observe the labor and revolutionary movement.)
EVERY COMRADE in Europe, partisan of the Fourth International or even bitter opponent (excluding, of course, Stalinists) who can read English, reads The New International and eagerly awaits the next issue. What impressed me most was the universal acclaim with which The New International is received. It is everywhere regarded as the outstanding Marxist journal in the world. The comrades read it from cover to cover and discuss its contents. In fact, issues are passed around from one to the other and put to great service. I have seen comrades in most of the countries of Europe go without meals and pool their pennies in order to raise enough money for a subscription to The New International.
Considering the number of comrades and sympathizers who can read English, the circulation of The New International in Europe is certainly much higher than in the United States. Actually, it has done far more for increasing the prestige of the SWP than anything else we have done. Further, The New International is the best organizer that the Fourth International has. Not only individual comrades, but in some cases, entire groups have been won to the Fourth International on the basis of The New International, a copy of the magazine having found its way into their hands in some way or other. I only wish that our own comrades would appreciate The New International as much as the European comrades do, and as much as The New International deserves.
Frank DEMBY
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<h2>Frank Demby</h2>
<h1>Congress Throws Burden of War Billions on Labor</h1>
<h3>(July 1941)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_29" target="new">Vol. 5 No. 29</a>, 21 July 1941, pp. 1 & 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">As the July 1 deadline to begin the new fiscal year approached, the duly elected representatives of the people put on their annually astonishing burst of speed and voted the largest federal budget in the history of the United States. Almost 70 per cent of the 1942 fiscal budget will go for war preparations. What has been happening to the federal budget can readily be seen from the table:</p>
<table width="600" align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<th colspan="5">
<p class="smc">(Expenditures in millions of dollars)</p>
</th>
</tr>
<tr valign="top">
<td>
<p class="smc"> </p>
</td>
<th width="16%">
<p class="smc">Total<br>
Expenditures</p>
</th>
<th width="16%">
<p class="smc">War*</p>
</th>
<th width="16%">
<p class="smc">Normal</p>
</th>
<th width="16%">
<p class="smc">% Budget<br>
for War</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">Fiscal year 1940 (actual)</p>
</td>
<td>
<p class="smc"> 8,998</p>
</td>
<td>
<p class="smc"> 1,559</p>
</td>
<td>
<p class="smc">7,439</p>
</td>
<td>
<p class="smc">17.3</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Fiscal year 1941 (actual)</p>
</td>
<td>
<p class="smc">12,710</p>
</td>
<td>
<p class="smc"> 6,948</p>
</td>
<td>
<p class="smc">6,662</p>
</td>
<td>
<p class="smc">41.6</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Fiscal year 1943 (planned)</p>
</td>
<td>
<p class="smc">22,269</p>
</td>
<td>
<p class="smc">15,500</p>
</td>
<td>
<p class="smc">6,768</p>
</td>
<td>
<p class="smc">69.6</p>
</td>
</tr>
<tr>
<td colspan="5">
<p class="sm1"><small><small>* Expenditures for war (exclusive of debt retirements) include only those directly listed by the Treasury under “National Defense.” However, many hundreds of millions of dollars appropriated for other agencies will directly and indirectly aid in war preparations.</small></small></p>
</td>
</tr>
</tbody></table>
<p class="fst">More money will be spent for war preparations from July 1, 1941, to June 30, 1942, than was spent for all purposes during the past fiscal year. The total expenditures for the coming year are expected to exceed the previous record, during 1938–1939. by almost four billion dollars. Moreover, this total will undoubtedly be exceeded as the drive toward entry into a “shooting war” accelerates, requiring the passage of huge deficiency appropriations. From 1940 to 1941, direct appropriations for war increased about 400 per cent. From 1941 to 1942 they will increase at least 250 per cent more.</p>
<p>These figures simply mean that the United States has truly entered upon a long period of war economy. Representatives of the government and the boss press have been thundering at us for the past several months what this will mean to the working population of the country – gasless Sundays, reduction in the use of electricity for the home, no more aluminum pots and pans, etc. But it will mean much more than a few inconveniences in our normal habits of consumption. The burden of the war economy will be thrown onto the backs of those who toil and sweat for a living – that is the real meaning of this war budget. One of the first direct indications of this was the cutting down of the total relief appropriation to $910,905,000. This means a reduction of more than $457,000,000 from last year’s relief appropriation. Translated into human terms, it means that 700,000 of the 1,700,000 persons now on WPA will have to be dropped immediately.</p>
<p>The <strong>New York Times</strong>, in its report of this step, says: “In both Houses, the majority contended that in the coming year defense industries will absorb many of those dropped from the rolls, but at the same time, <em>Congress was told by WPA officials that 5,500,000 persons will be unemployed during the next twelve months and that because of the uneven distribution of defense contracts many thousands were bound to suffer because of the relief cuts.</em>” (Emphasis mine – <em>F.D.</em>) We can be not exaggerating the number of unemployed. Labor sources indicate a much higher figure. Moreover, dislocations in the war economy produced by the shifting of many factories from the production of peacetime consumer goods to war-time producer goods and the inability to procure some necessary raw materials for war production will undoubtedly throw many additional thousands of workers into the ranks of the unemployed.</p>
<p>This, however, is only the beginning of the story of how the developing war economy will mean a catastrophic decline in the living standards of the masses. War costs money. World War I cost the United States, according to the late President Coolidge, $100,000,000,000. The tremendous increase in man’s capacity for destruction in the intervening quarter of a century means that World War II will cost the United States a much greater sum.</p>
<p>It is expected that revenues for the 1942 fiscal year will total about $12,000,000,000, about five billion dollars more than the past year, but still ten billion dollars short of what is to be spent. The deficit, of course, will be covered by government borrowing. This will raise the national debt by June 30, 1942, to an expected $57,500,000,000. It probably will be much larger coming close to the present statutory limit of 65 billion dollars on the federal debt. Interest payments on the national debt during the past year amounted to $1,111,000,000. The overwhelming majority of these payments went to the banks and insurance companies. This year these companies will receive even more.</p>
<p>A rising national debt, particularly one based on a war economy, greatly increases the danger of inflation. Already Leon Henderson, federal price control administrator, speaks of the price situation as “very serious.” He believes that the cost of living is bound to go up and that far-reaching controls will be needed, particularly over wage rates. The cost of living has already gone up almost 5 per cent during the past year, more than nullifying most of the wage increases that some sections of the working class have won through strike action or the threat of strikes. An indication of what is in store for the workers is shown by the wholesale commodity index of the U.S. Bureau of Labor Statistics, which has risen almost 50 per cent since the outbreak of World War II. Retail prices always follow wholesale prices, as a rule, even though they lag behind somewhat. In other words prices, especially prices of necessities, will continue to rise during the next year – meaning a further and really substantial decline in the standard of living of the American workers and masses.</p>
<p>Nor is this the whole story of what the war budget means. The increased revenues will be covered only in small part by increased yields from existing taxes. The House Ways and Means Committee has not yet reported out the new tax bill. When it does I shall analyze it in detail. In will be raised through new excise taxes, which will be passed on to the consumer in the form of higher prices. Practically all of these will bear most heavily on the workers and those in the low income brackets. In addition, the bulk of the increased revenue from income taxes will come from the middle classes. The most damning indictment of the proposed that it proposes a mere 10 per cent increase in the rates for the excess profits tax. This is a drop in a bucket and still leaves the excess profits tax as a pure swindle.</p>
<p>The opposition of the Workers Party to the war budget flows from our opposition to the imperialist war toward which Roosevelt is heading us. All sections of the working class should therefore oppose this war budget. The workers, especially the organized workers through their trade unions, must oppose this war budget because it means death and strangulation for them. It means a tremendous decline in their standard of living at the same time that the big capitalists are raking in fantastically high profits. It means a steady undermining of the hard-won rights and civil liberties of the workers as the capitalists try to solve the budgetary crisis by a more and more open drive to institute a rigid totalitarian regime in this country. We are not in the habit of giving run their government. But we have the right and the duty to point out to the workers that there is absolutely no reason why the main burden of the war should be shouldered by the workers and masses. There is no rational reason why people should be unemployed and starving in this country of wonderfully abundant resources and highly developed technical skills. There is no reason why prices should go up, why indirect taxes, which fall most heavily on those who can least afford to pay them, should increase. In short, there is no reason why the standard of living of the working population should go down while a few build up huge fortunes, except that this is the way the capitalist system functions, particularly in war-time.</p>
<p><em>Let the capitalists pay for their war! They can afford it! Let the government levy a 100 per cent excess profits tax. Take all the profits out of war. Nationalize the war industries and place them under control of the workers. Place a capital levy on the accumulated fortunes of big business men, wrung from the sweat and blood of the workers, and there can be a steadily rising standard of living and the preservation of democratic rights!</em></p>
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Frank Demby
Congress Throws Burden of War Billions on Labor
(July 1941)
From Labor Action, Vol. 5 No. 29, 21 July 1941, pp. 1 & 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
As the July 1 deadline to begin the new fiscal year approached, the duly elected representatives of the people put on their annually astonishing burst of speed and voted the largest federal budget in the history of the United States. Almost 70 per cent of the 1942 fiscal budget will go for war preparations. What has been happening to the federal budget can readily be seen from the table:
(Expenditures in millions of dollars)
Total
Expenditures
War*
Normal
% Budget
for War
Fiscal year 1940 (actual)
8,998
1,559
7,439
17.3
Fiscal year 1941 (actual)
12,710
6,948
6,662
41.6
Fiscal year 1943 (planned)
22,269
15,500
6,768
69.6
* Expenditures for war (exclusive of debt retirements) include only those directly listed by the Treasury under “National Defense.” However, many hundreds of millions of dollars appropriated for other agencies will directly and indirectly aid in war preparations.
More money will be spent for war preparations from July 1, 1941, to June 30, 1942, than was spent for all purposes during the past fiscal year. The total expenditures for the coming year are expected to exceed the previous record, during 1938–1939. by almost four billion dollars. Moreover, this total will undoubtedly be exceeded as the drive toward entry into a “shooting war” accelerates, requiring the passage of huge deficiency appropriations. From 1940 to 1941, direct appropriations for war increased about 400 per cent. From 1941 to 1942 they will increase at least 250 per cent more.
These figures simply mean that the United States has truly entered upon a long period of war economy. Representatives of the government and the boss press have been thundering at us for the past several months what this will mean to the working population of the country – gasless Sundays, reduction in the use of electricity for the home, no more aluminum pots and pans, etc. But it will mean much more than a few inconveniences in our normal habits of consumption. The burden of the war economy will be thrown onto the backs of those who toil and sweat for a living – that is the real meaning of this war budget. One of the first direct indications of this was the cutting down of the total relief appropriation to $910,905,000. This means a reduction of more than $457,000,000 from last year’s relief appropriation. Translated into human terms, it means that 700,000 of the 1,700,000 persons now on WPA will have to be dropped immediately.
The New York Times, in its report of this step, says: “In both Houses, the majority contended that in the coming year defense industries will absorb many of those dropped from the rolls, but at the same time, Congress was told by WPA officials that 5,500,000 persons will be unemployed during the next twelve months and that because of the uneven distribution of defense contracts many thousands were bound to suffer because of the relief cuts.” (Emphasis mine – F.D.) We can be not exaggerating the number of unemployed. Labor sources indicate a much higher figure. Moreover, dislocations in the war economy produced by the shifting of many factories from the production of peacetime consumer goods to war-time producer goods and the inability to procure some necessary raw materials for war production will undoubtedly throw many additional thousands of workers into the ranks of the unemployed.
This, however, is only the beginning of the story of how the developing war economy will mean a catastrophic decline in the living standards of the masses. War costs money. World War I cost the United States, according to the late President Coolidge, $100,000,000,000. The tremendous increase in man’s capacity for destruction in the intervening quarter of a century means that World War II will cost the United States a much greater sum.
It is expected that revenues for the 1942 fiscal year will total about $12,000,000,000, about five billion dollars more than the past year, but still ten billion dollars short of what is to be spent. The deficit, of course, will be covered by government borrowing. This will raise the national debt by June 30, 1942, to an expected $57,500,000,000. It probably will be much larger coming close to the present statutory limit of 65 billion dollars on the federal debt. Interest payments on the national debt during the past year amounted to $1,111,000,000. The overwhelming majority of these payments went to the banks and insurance companies. This year these companies will receive even more.
A rising national debt, particularly one based on a war economy, greatly increases the danger of inflation. Already Leon Henderson, federal price control administrator, speaks of the price situation as “very serious.” He believes that the cost of living is bound to go up and that far-reaching controls will be needed, particularly over wage rates. The cost of living has already gone up almost 5 per cent during the past year, more than nullifying most of the wage increases that some sections of the working class have won through strike action or the threat of strikes. An indication of what is in store for the workers is shown by the wholesale commodity index of the U.S. Bureau of Labor Statistics, which has risen almost 50 per cent since the outbreak of World War II. Retail prices always follow wholesale prices, as a rule, even though they lag behind somewhat. In other words prices, especially prices of necessities, will continue to rise during the next year – meaning a further and really substantial decline in the standard of living of the American workers and masses.
Nor is this the whole story of what the war budget means. The increased revenues will be covered only in small part by increased yields from existing taxes. The House Ways and Means Committee has not yet reported out the new tax bill. When it does I shall analyze it in detail. In will be raised through new excise taxes, which will be passed on to the consumer in the form of higher prices. Practically all of these will bear most heavily on the workers and those in the low income brackets. In addition, the bulk of the increased revenue from income taxes will come from the middle classes. The most damning indictment of the proposed that it proposes a mere 10 per cent increase in the rates for the excess profits tax. This is a drop in a bucket and still leaves the excess profits tax as a pure swindle.
The opposition of the Workers Party to the war budget flows from our opposition to the imperialist war toward which Roosevelt is heading us. All sections of the working class should therefore oppose this war budget. The workers, especially the organized workers through their trade unions, must oppose this war budget because it means death and strangulation for them. It means a tremendous decline in their standard of living at the same time that the big capitalists are raking in fantastically high profits. It means a steady undermining of the hard-won rights and civil liberties of the workers as the capitalists try to solve the budgetary crisis by a more and more open drive to institute a rigid totalitarian regime in this country. We are not in the habit of giving run their government. But we have the right and the duty to point out to the workers that there is absolutely no reason why the main burden of the war should be shouldered by the workers and masses. There is no rational reason why people should be unemployed and starving in this country of wonderfully abundant resources and highly developed technical skills. There is no reason why prices should go up, why indirect taxes, which fall most heavily on those who can least afford to pay them, should increase. In short, there is no reason why the standard of living of the working population should go down while a few build up huge fortunes, except that this is the way the capitalist system functions, particularly in war-time.
Let the capitalists pay for their war! They can afford it! Let the government levy a 100 per cent excess profits tax. Take all the profits out of war. Nationalize the war industries and place them under control of the workers. Place a capital levy on the accumulated fortunes of big business men, wrung from the sweat and blood of the workers, and there can be a steadily rising standard of living and the preservation of democratic rights!
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<h2>Frank Demby</h2>
<h1>Await Nazi Move in Czechoslovakia</h1>
<h4>Hlitler Threat Arouses Extreme Nationalistic Fervor;<br>
Workers View British Efforts with Skepticism</h4>
<h3>(August 1938)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Socialist Appeal</strong>, <a href="../../../../newspape/themilitant/socialist-appeal-1938/index.htm#sa02_35" target="new">Vol. II No. 35</a>, 27 August 1938, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">PRAGUE, Czechoslovakia, Aug. 10. – This magnificent city, the juncture between East and West, has been literally overwhelmed by an influx of newspaper correspondents since the beginning of this month – the occasion, of course, being the arrival of Lord Runciman and his entourage. On the surface, Prague is calm; the people do not seem unduly excited in view of the critical situation. They know, at least, that regardless of the results of Runciman’s mission, there will be no war while Runciman is here, so they calmly pursue the even tenor of their ways, take vacations, sip their beer in the many pleasant cafes and talk – mainly of the Russo-Japanese situation, rather than of Runciman and Hitler, whom they would like to forget.</p>
<p>The experienced observer, however, is not fooled by the easy-going disposition of the Czechs. There are countless bits of evidence which reveal the tension beneath the surface and explain the highly surcharged atmosphere of Prague, when compared with London or Paris. One can stroll any evening down the stately Vaclavske, Prague’s Broadway and Fifth Avenue, and notice the number of soldiers who walk briskly past, saluting each other. The population, from capitalist to worker, eyes them with pride. One can almost read behind the gleam in their eyes their obvious thoughts: “There go our soldiers. Look how strong and well-trained they are. If Hitler thinks that he will take Czechoslovakia like he took Austria, he is making a big mistake. We will fight, everyone of us; and our army, almost a million strong, is the best-equipped in the world.” How many times now have I heard such thoughts from the lips of various people, representing every social strata and class!<br>
</p>
<h4>Speak No German</h4>
<p class="fst">It is obvious that an intense wave of nationalism and patriotism has swept over this small, elongated state, artificially created by the Treaty of Versailles, and now already half inside the jaws of Hitler’s Greater Germany. Instances are too numerous to mention, but one made a profound impression upon me. I knew that Czechoslovakian is a Slavic language and would be so much gibberish to me, but I did not anticipate any language difficulties as I took it for granted that almost everyone in Prague would speak German. Time after time German drew no response at all. Finally, I asked a comrade to explain this. He replied: “Oh, yes! Most Czechs speak German, but they will not do so nowadays if they can avoid it.”</p>
<p>The reasons for this chauvinistic sweep are not hard to find. Hitler’s annexation of Austria made the Czech bourgeoisie realize that they were next. Relatively far more powerful and clever than the Austrian bourgeoisie, the Czech bourgeoisie was determined to fight for the preservation of their internal imperialist domain, the right to exploit the nine millions of Germans, Slovaks, Ruthenians, Hungarians, etc., who comprise a definite majority of the total population of 15,000,000. When the general mobilization was called on May 21, there were many misgivings in foreign capitals, even, it is rumored, in the Presidential Palace. Only the General Staff of the Army was confident that the mobilization could be achieved. They knew the strength and training of the army, and the superiority that the famous Skoda munitions works gave them. It turned out to be a master stroke. Everything went off like clockwork. In some towns in the Sudeten areas when soldiers began to appear, they thought it must be the advance guard of Hitler’s legions The Henleinists turned out to welcome them, only to be immediately disillusioned. Hitler took pause and decided that that was not the moment. The result was to raise Czech patriotism to a feverish pitch.<br>
</p>
<h4>Class Lines Forgotten</h4>
<p class="fst">But far more important than the strategy and propaganda of the bourgeoisie in the development of the nationalistic spirit here has been the complete degeneration and capitulation of the mass workers’ organizations, the Communist Party, the Social Democracy and the trade unions. They have completely solidarized themselves with Benes in an unwritten People’s Front and, with the exception of the German Social-Democratic Party (in Sudeten Czechoslovakia), have abandoned even making a pretext to fight for the self-determination of the national minorities.</p>
<p>While the Stalinist apparatus is concentrated in Prague, having nothing at all in the Sudeten areas, its 40,000 members wield a far greater influence proportionately than the 180,000 members of the Czech Social Democratic Party and the 40,000 German-speaking Social Democrats. It is important to note, however, that while the Stalinist influence is on the increase, it is largely amongst the intelligentsia and the petty-bourgeoisie. Prague is already the second (next to Spain) largest concentration point of the G.P.U., outside of Russia, and the gangster apparatus, although a present quiet, is waiting for the time when it will be more politic for it to move more openly and freely.</p>
<p>In fact, it is only the small voice of the Fourth International that is raised here against the dictatorial war plans of Czechoslovakia and the chauvinistic poison that has been injected into the bloodstream of the proletariat by these so-called workers’ leaders.<br>
</p>
<h4>Economic Crisis</h4>
<p class="fst">The present crisis is equally re vealed, although perhaps not so dramatically, in the economic field. True, the two gigantic enterprises of Czechoslovakia, the Skoda munitions works and the Bata shoe factories, are still showing profits, but at a diminished rate. The currency is depreciated, the Czech kronen being placed in the category of the “blocked currencies,” along with the German mark and the Italian lire. This makes it quite advantageous for foreigners to visit but in spite of this the tourist trade of Czechoslovakia, which annually draws hundreds of thousands to its famous baths, has dwindled to practically nothing, and most of the baths are closed.</p>
<p>Unemployment is increasing steadily, and the government has made absolutely no provision for relief. “Join the army or starve” is, in reality, the slogan of this “democratic” government; and of course, neither the C.P., S.P nor trade unions lift a finger in defense of the unemployed. As a matter of fact, the trade unions controlled by the Social Democracy, do not even exercise the strength which their number permit them, working hours being very long and wages low. The average Czech worker earns about $5.00 a week; Czechoslovakia may be a tourist’s paradise but hardly a worker’s. In true Rooseveltian Popular Front style the entire burden of the crisis and the war preparations is placed on the backs of the workers.</p>
<p>What will Runciman do? This question I have propounded to many workers. Invariably they reply: “I don’t know. We hope for the best, but we do not expect anything from him.” In this, the Czech workers show admirable good sense and a healthy distrust for the chicanery of British diplomacy. The newspaper correspondents are beginning to chafe at the lack of news, but those on the inside predict that these conversations of Runciman will bring the Henleinists and the Government together over the same table, the object being a formula which will appease the situation for a time, as the notorious lag in England’s rearmament has even handicapped her in trying to achieve the Four-Power Pact. The difficulties are many.<br>
</p>
<h4>Believe War Inevitable</h4>
<p class="fst">England has no qualms about giving Hitler Sudeten Czechoslovakia. After all, it doesn’t belong to her, but it must be done “peacefully.” That requires time. Can Hitler wait a year to carry out the policy of peaceful penetration that is to be proposed? Moreover, while the Czech government is quite willing to grant the Nazis almost a free hand in the municipal administrations in the Sudeten area, such proposals will weaken their authority considerably, and they have already indicated that they will insist that control of the police, army and financial departments in the Sudeten cities remain in their hands. Whether Runciman can find a formula (and any formula must be at the expense of Czechoslovakia) that will be agreeable to both Henlein and Benes remains to be seen. The population here is skeptical, but in any case it believes that war is inevitable, and sooner rather than later.</p>
<p>Meanwhile, absolutely no steps are taken by the government to arm the workers or to solve the nationalistic problem in an effective manner. Nor can any capitalist government do so, without unleashing a workers’ revolution. It is this that the Fourth International realizes, but which the Czech workers do not yet realize. The instinctive hatred of the workers for Hitler is legitimate and progressive. But they must be made to realize, as the new united organ of the Fourth International, <strong>Proletarske Noviny</strong>, points out that Hitler cannot be defeated, nor the independence of Czechoslovakia maintained, without at the same time pursuing an intransigent policy of class struggle against the Czech bourgeoisie. Only a workers’ state, part of the United Socialist States of Europe, can save Czechoslovakia.</p>
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Frank Demby
Await Nazi Move in Czechoslovakia
Hlitler Threat Arouses Extreme Nationalistic Fervor;
Workers View British Efforts with Skepticism
(August 1938)
From Socialist Appeal, Vol. II No. 35, 27 August 1938, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
PRAGUE, Czechoslovakia, Aug. 10. – This magnificent city, the juncture between East and West, has been literally overwhelmed by an influx of newspaper correspondents since the beginning of this month – the occasion, of course, being the arrival of Lord Runciman and his entourage. On the surface, Prague is calm; the people do not seem unduly excited in view of the critical situation. They know, at least, that regardless of the results of Runciman’s mission, there will be no war while Runciman is here, so they calmly pursue the even tenor of their ways, take vacations, sip their beer in the many pleasant cafes and talk – mainly of the Russo-Japanese situation, rather than of Runciman and Hitler, whom they would like to forget.
The experienced observer, however, is not fooled by the easy-going disposition of the Czechs. There are countless bits of evidence which reveal the tension beneath the surface and explain the highly surcharged atmosphere of Prague, when compared with London or Paris. One can stroll any evening down the stately Vaclavske, Prague’s Broadway and Fifth Avenue, and notice the number of soldiers who walk briskly past, saluting each other. The population, from capitalist to worker, eyes them with pride. One can almost read behind the gleam in their eyes their obvious thoughts: “There go our soldiers. Look how strong and well-trained they are. If Hitler thinks that he will take Czechoslovakia like he took Austria, he is making a big mistake. We will fight, everyone of us; and our army, almost a million strong, is the best-equipped in the world.” How many times now have I heard such thoughts from the lips of various people, representing every social strata and class!
Speak No German
It is obvious that an intense wave of nationalism and patriotism has swept over this small, elongated state, artificially created by the Treaty of Versailles, and now already half inside the jaws of Hitler’s Greater Germany. Instances are too numerous to mention, but one made a profound impression upon me. I knew that Czechoslovakian is a Slavic language and would be so much gibberish to me, but I did not anticipate any language difficulties as I took it for granted that almost everyone in Prague would speak German. Time after time German drew no response at all. Finally, I asked a comrade to explain this. He replied: “Oh, yes! Most Czechs speak German, but they will not do so nowadays if they can avoid it.”
The reasons for this chauvinistic sweep are not hard to find. Hitler’s annexation of Austria made the Czech bourgeoisie realize that they were next. Relatively far more powerful and clever than the Austrian bourgeoisie, the Czech bourgeoisie was determined to fight for the preservation of their internal imperialist domain, the right to exploit the nine millions of Germans, Slovaks, Ruthenians, Hungarians, etc., who comprise a definite majority of the total population of 15,000,000. When the general mobilization was called on May 21, there were many misgivings in foreign capitals, even, it is rumored, in the Presidential Palace. Only the General Staff of the Army was confident that the mobilization could be achieved. They knew the strength and training of the army, and the superiority that the famous Skoda munitions works gave them. It turned out to be a master stroke. Everything went off like clockwork. In some towns in the Sudeten areas when soldiers began to appear, they thought it must be the advance guard of Hitler’s legions The Henleinists turned out to welcome them, only to be immediately disillusioned. Hitler took pause and decided that that was not the moment. The result was to raise Czech patriotism to a feverish pitch.
Class Lines Forgotten
But far more important than the strategy and propaganda of the bourgeoisie in the development of the nationalistic spirit here has been the complete degeneration and capitulation of the mass workers’ organizations, the Communist Party, the Social Democracy and the trade unions. They have completely solidarized themselves with Benes in an unwritten People’s Front and, with the exception of the German Social-Democratic Party (in Sudeten Czechoslovakia), have abandoned even making a pretext to fight for the self-determination of the national minorities.
While the Stalinist apparatus is concentrated in Prague, having nothing at all in the Sudeten areas, its 40,000 members wield a far greater influence proportionately than the 180,000 members of the Czech Social Democratic Party and the 40,000 German-speaking Social Democrats. It is important to note, however, that while the Stalinist influence is on the increase, it is largely amongst the intelligentsia and the petty-bourgeoisie. Prague is already the second (next to Spain) largest concentration point of the G.P.U., outside of Russia, and the gangster apparatus, although a present quiet, is waiting for the time when it will be more politic for it to move more openly and freely.
In fact, it is only the small voice of the Fourth International that is raised here against the dictatorial war plans of Czechoslovakia and the chauvinistic poison that has been injected into the bloodstream of the proletariat by these so-called workers’ leaders.
Economic Crisis
The present crisis is equally re vealed, although perhaps not so dramatically, in the economic field. True, the two gigantic enterprises of Czechoslovakia, the Skoda munitions works and the Bata shoe factories, are still showing profits, but at a diminished rate. The currency is depreciated, the Czech kronen being placed in the category of the “blocked currencies,” along with the German mark and the Italian lire. This makes it quite advantageous for foreigners to visit but in spite of this the tourist trade of Czechoslovakia, which annually draws hundreds of thousands to its famous baths, has dwindled to practically nothing, and most of the baths are closed.
Unemployment is increasing steadily, and the government has made absolutely no provision for relief. “Join the army or starve” is, in reality, the slogan of this “democratic” government; and of course, neither the C.P., S.P nor trade unions lift a finger in defense of the unemployed. As a matter of fact, the trade unions controlled by the Social Democracy, do not even exercise the strength which their number permit them, working hours being very long and wages low. The average Czech worker earns about $5.00 a week; Czechoslovakia may be a tourist’s paradise but hardly a worker’s. In true Rooseveltian Popular Front style the entire burden of the crisis and the war preparations is placed on the backs of the workers.
What will Runciman do? This question I have propounded to many workers. Invariably they reply: “I don’t know. We hope for the best, but we do not expect anything from him.” In this, the Czech workers show admirable good sense and a healthy distrust for the chicanery of British diplomacy. The newspaper correspondents are beginning to chafe at the lack of news, but those on the inside predict that these conversations of Runciman will bring the Henleinists and the Government together over the same table, the object being a formula which will appease the situation for a time, as the notorious lag in England’s rearmament has even handicapped her in trying to achieve the Four-Power Pact. The difficulties are many.
Believe War Inevitable
England has no qualms about giving Hitler Sudeten Czechoslovakia. After all, it doesn’t belong to her, but it must be done “peacefully.” That requires time. Can Hitler wait a year to carry out the policy of peaceful penetration that is to be proposed? Moreover, while the Czech government is quite willing to grant the Nazis almost a free hand in the municipal administrations in the Sudeten area, such proposals will weaken their authority considerably, and they have already indicated that they will insist that control of the police, army and financial departments in the Sudeten cities remain in their hands. Whether Runciman can find a formula (and any formula must be at the expense of Czechoslovakia) that will be agreeable to both Henlein and Benes remains to be seen. The population here is skeptical, but in any case it believes that war is inevitable, and sooner rather than later.
Meanwhile, absolutely no steps are taken by the government to arm the workers or to solve the nationalistic problem in an effective manner. Nor can any capitalist government do so, without unleashing a workers’ revolution. It is this that the Fourth International realizes, but which the Czech workers do not yet realize. The instinctive hatred of the workers for Hitler is legitimate and progressive. But they must be made to realize, as the new united organ of the Fourth International, Proletarske Noviny, points out that Hitler cannot be defeated, nor the independence of Czechoslovakia maintained, without at the same time pursuing an intransigent policy of class struggle against the Czech bourgeoisie. Only a workers’ state, part of the United Socialist States of Europe, can save Czechoslovakia.
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<h2>T.N. Vance</h2>
<h1>The Crisis in Distribution</h1>
<h3>(May 1955)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni55sum" target="new">Vol. XXI No. 2</a>, Summer 1955, pp. 86–98.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">While the economy keeps rolling on to new peaks of prosperity, with high levels of production and profits, there are some clouds on the horizon. These may be small, but they can grow. Moreover, they are discernible to more or less orthodox supporters of the present system. Above all, they perturb the defenders of small business.</p>
<p>The <strong>Annual Report of the Select Committee on Small Business</strong> (of the United States Senate, 84th Congress, 1st Session, Report No. 129) in its report of March 1955 has this to say in its introduction:</p>
<p class="quoteb">A searching appraisal of the position of small business within our economy during 1954 does not provide a basis for viewing the future of small, independent enterprises with complacence. In a sense, 1954 was a “normal” year. No war galvanized the industrial community. No depression swept large numbers of small enterprises out of existence. Indeed, the somewhat slower tempo of business activity which became apparent in 1953 and carried over into the first quarters of 1954, quickened perceptibly during the closing months of 1954. It may be assumed that a well-founded spirit of optimism about the immediate business outlook was responsible for the 11,981 business incorporations in December, the highest monthly total since January of 1947, and for the full-year total of 117,164 incorporations which exceeded those of each year since 1947. On the other hand, 10,300 fewer businesses of all types started in the first 6 months of 1954, compared with the same period of 1953, and Dun & Bradstreet recorded 2,224 more failures involving court proceedings or voluntary action likely to end in loss to creditors in 1954 than in 1953.</p>
<p class="quote">Your committee realizes, however, that it is easy for selective indices to mislead those who hold that what seems good for the economy as a whole must of necessity also be good for small business. The fate of small, independent businesses is not chained by natural law to the more narrowly fluctuating fortunes of the larger and hardier units within the industrial complex. <em>Countertrends are not only possible, but clearly discernible</em>.</p>
<p class="quote">To a businessman, the proof of the pudding must be in the profits. And it is precisely in the profit position of smaller manufacturing enterprises that your committee detects one of the basic aspects of the current small-business situation which is most disturbing. <em>Whether measured by percentage of stockholders’ equity or by percentage of dollars of sales, the profits of smaller manufacturing corporations, after taxes, have shrunk since 1952, while, with few exceptions, the profits of the largest corporations have increased</em> ...</p>
<p class="quote">Profits as a percentage of dollar sales present a similar picture for the first 6 months of 1952, compared with the first half of 1954. On this basis, <em>the smallest group’s money-making ability declined 60.9 per cent, while the biggest corporations showed an increase of 10.5 per cent</em>. In addition, the small manufacturer’s share of total sales has drifted downward from 19 per cent in 1947 to 14 per cent in 1953, <em>a trend which</em>, if unchecked, <em>can easily assume alarming significance</em>.</p>
<p class="quote">These and other factors strongly suggest to your committee that <em>there are obscure, complex, and underlying forces at work within our economy that are inimical to the future of small, independent enterprise</em>. To discover and correct these causes of the mounting disadvantages facing the small-business man should be a major concern of all who want to see preserved the vigor of our free-enterprise system....</p>
<p class="quote">Your committee has long been deeply disturbed over the multiplying evidences of concentration of economic power in the managements of a relatively few huge corporations. Oligarchic control over groups of vital industries, even though such control may be exercised within the letter of the law, must inevitably exert a contracting influence on freedom of endeavor. In each of its annual reports since 1951, your committee has stressed its belief that <em>the threat of monopoly has not lessened, not remained constant, but has, in fact, assumed more menacing proportions</em>. It would, indeed, not be stating the case with excessive emphasis to say that <em>your committee’s uneasiness of former years has turned to grave apprehension</em>.” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The above findings, it should be emphasized, are those of the Senate Small Business Committee. Their concern over the growth of monopoly and the consequent weakening of small business is reinforced by the still more recent study of the Federal Trade Commission. As reported in <strong>The New York Times</strong> of May 20, 1955: “Business mergers, while still well below the pre-depression levels of the late Nineteen Twenties, are running at three times the 1949 rate.” The FTC “gave two major reasons for the current merger wave: an urge to expand production and <em>an inability of smaller companies to get adequate financing for expansion</em>.” (Italics mine. – <em>T.N.V.</em>)</p>
<p>The tremendous accumulation of capital that has taken place in recent years is beginning to be accompanied by a fall in the rate of profit – attacking first the smaller capitalists. The process is not an unexpected one. In discussing the relationships between accumulation of capital and the rate of profit, Marx states (<strong>Capital</strong>, Vol. III, p. 283):</p>
<p class="quoteb">A fall in the rate of profit and a hastening of accumulation are in so far only different expressions of the same process as both of them indicate the development of the productive power. Accumulation in its turn hastens the fall of the rate of profit, inasmuch as it implies the concentration of labor on a large scale and thereby a higher composition of capital. On the other hand, a fall in the rate of profit hastens the concentration of capital and its centralization through the expropriation of the smaller capitalists, the expropriation of the last survivors of the direct producers who still have anything to give up. This accelerates on one hand the accumulation, so far as mass is concerned, although the rate of accumulation falls with the rate of profit.</p>
<p class="fst">It may be objected that profits increased in 1954, but the increase did not help the rate of profit. This, moreover, is true of leading corporations. In the annual study of the National City Bank, contained in the April 1955 <strong>Monthly Letter</strong>, the return on net assets declined (for 3,442 leading corporations) from 10.6 per cent in 1953 to 10.3 per cent in 1954 despite a four per cent increase in reported net income after taxes. Imagine what the results would have been if not for the tax swindle law of 1954! States the National City Bank:</p>
<p class="quoteb">In the manufacturing industries, which in number of companies and capital investment comprise over half of the totals for all lines of business included in our tabulation, the 1,778 reporting companies show combined net income up 4 per cent. Tax details given by the larger companies indicate that in 1954, on an overall volume of sales about 5 per cent lower than in 1953, <em>pre-tax earnings were down 10 per cent</em>. Liability for federal income and excess profits taxes declined by 25 per cent, with the portion of pretax earnings absorbed by such taxes in the two years declining from an average of 53 to 45 per cent.” (Italics mine. – <em>T.N.V.</em>)</p>
<p class="fst">The dependence of private capitalists on the capitalist state for maintenance of the profits of the bourgeoisie as a class is thus shown in a relatively new and graphic form. Profits, of course, remain the end-purpose of economic activity (“the proof of the pudding”) under capitalism.</p>
<p>One of the main props of the prosperity in the first half of 1955 has been the automobile industry. Never before in history has American capitalism produced automobiles at such fantastic rates. According to <strong>Dun’s Review and Modern Industry</strong> for May 1955,</p>
<p class="quoteb">More cars were produced in the first quarter than in any other quarter in history. The record total of 781,000 cars reached in March was almost matched in April (a shorter month) as production continued at, the starting rate of about 30,000 cars per day, which means that cars have been rolling off the assembly likes at the rate of one each three seconds, night and day ... During the first half of 1955 more than 4 million cars will probably be made. Before 1949 there had been only one year – 1929 – in which more than 4 million cars were made during an entire year.</p>
<p class="fst">Profits of the big three (GM, Ford and Chrysler) have been huge. The smaller automobile companies have been forced to merge in an attempt to remain alive. Meanwhile, what has happened to the dealers? They are not doing so well; in fact, they are not sharing in the profits of the big automobile manufacturers at all. Nor is the outlook likely to improve, as dealers have been forced to take unprecedented quantities of cars from the manufacturers. The same analysis in <strong>Dun’s</strong> goes on to say:</p>
<p class="quoteb">The supplies of new cars with dealers rose noticeably to 624,277 in the beginning of April, to reach a postwar peak. However, at the present rate of sales which have been outrunning output, new car inventories are entirely reasonable. Notwithstanding the expansion in sales, The National Automobile Dealers Association reports that <em>operating profits for new car and truck dealers are the worst in fifteen years</em>. (Italics mine. – <em>T.N.V.</em>)<br>
</p>
<p class="fst">IT IS NOT ONLY the small manufacturer, but the small business man in general whose position is steadily worsening, while monopoly capital is steadily strengthened. These fundamental trends of a capitalism that has outlived its historical usefulness more than a generation ago are reinforced and accelerated by the development of the Permanent War Economy. War outlays are necessarily concentrated in large aggregations of capital. The Senate Small Business Committee, in the previously cited report, states in the chapter on <em>Military Procurement</em> that</p>
<p class="quoteb">“all business and Government agencies have experienced dislocations due to the conversion from the highly geared war economy of the Korean war period to a reduced defense-production economy. This transition period has been fraught with changes in Government buying policies, which have caused much concern within the ranks of small business and among Government officials charged with the responsibility of procurement functions.”</p>
<p class="fst">Later on, it becomes clear that the concern is with “negotiated” contracts, as small business is suspicious of all contracts awarded by negotiation. When to this attitude is added the fact that “Since 1950 approximately 90 per cent of the dollar value of all purchasing has been awarded by negotiation, and the emergency exception has been widely used to justify this sharp departure from the basic method of advertising,” it becomes clear that despite all the double-talk small business has not been doing so well in receiving military contracts.</p>
<p>Perhaps, if large-scale war outlays do not mean increased business for small enterprises at the manufacturing level, small retailers benefit from the existence of the Permanent War Economy. Not very directly, according to the Hoover Commission Report on Business Enterprises, for the digest published by the Research Department of the Citizens Committee for the Hoover Report bemoans the fact that government is allegedly taking business away from private enterprise by various forms of government enterprise. The magnitude of the competition is indicated by the volume of business done by commissary stores and post exchanges. The annual figures cited are as follows:</p>
<table align="center" cellpadding="1" cellspacing="1">
<tbody><tr>
<td>
<p class="fst"> 199 commissary stores in the US</p>
</td>
<td rowspan="4">
<p class="fst"> </p>
</td>
<td>
<p class="fst">$185,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="fst"> 239 commissary stores abroad</p>
</td>
<td>
<p class="fst"> 121,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="fst"> 450 post exchanges in the US</p>
</td>
<td>
<p class="fst"> 470,000,000</p>
</td>
</tr>
<tr>
<td>
<p class="fst">2,700 post exchanges abroad</p>
</td>
<td>
<p class="fst"> 540,000,000</p>
</td>
</tr>
</tbody></table>
<p class="fst">Thus, over $1.3 billion of sales are “lost” by retailers. The Hoover Commission observes that</p>
<p class="quoteb">The whole operation [of commissary stores] is at least a vivid illustration of how bureaucracy can expand against the intent of the Congress, accompanied by a failure to include real costs. The real justification of the continued operation of most of these stores is a “fringe benefit” to the military personnel and their families.</p>
<p class="quote">The question arises as to whether ... increased salary payments ... would not be more consonant with sustaining our economic system.</p>
<p class="fst">What hurts is not only the loss of business, but the fact that millions of servicemen, and through them their families, are able to purchase a variety of commodities at substantial reductions from prevailing retail prices. From the point of view of the military budget, it would obviously be poor economy to raise military salaries in order to provide military personnel with purchasing power comparable to civilians.</p>
<p>Such considerations do not intrude upon the cerebrations of the Hoover Commission, who conclude by asking: “Is this [government enterprises] ‘creeping socialism’?” The answer is a model of its kind:</p>
<p class="quoteb">“Most of these projects were started for what, at the time, appeared to be justifiable operating reasons. Therefore, we cannot say that they were socialistic in intent. However, their perpetuation beyond the emergency period has led to the tremendous increase in the rate of growth of government wealth – as compared to private wealth – which the Harden Subcommittee cited. This is certainly an alarming symptom. Further, the rate is such as to suggest that ‘running’ is a more apt description than ‘creeping’.”</p>
<p class="fst">Not only is large-scale manufacturing prospering, but retail business is running about 8 per cent ahead of a year ago. Perhaps there has been some slight decline in the rate of profit, and perhaps small manufacturers are having their problems but, state the apologists of the bourgeoisie, 1955 will be the best or second-best year on record. Not only will we have “two cars in every garage” (who was it who said “two chickens in every pot”?), but eventually “every family will have three cars.” This pious wish is supposed to solve the problem of maintaining the present high rate of automobile sales in the latter part of the year.</p>
<p>The first signs of trouble occur as a rule, not merely in the difficulties that small businesses have in surviving, but in wholesale distribution. Marx puts it this way (<strong>Capital</strong>, Vol. III, p. 359):</p>
<p class="quoteb">Hence we note the phenomenon that crises do not show themselves, nor break forth, first in the retail business, which deals with direct consumption, but in the spheres of wholesale business and banking, by which the money-capital of society is placed at the disposal of wholesale business.</p>
<p class="quote">The manufacturer may actually sell to the exporter, and the exporter may in his turn sell to his foreign customer, the importer may sell his raw materials to the manufacturer, and the manufacturer his products to the wholesale dealer, etc. <em>But at some particular and unseen point, the goods may lie unsold.</em> On some other occasion, again, <em>the supplies of all producers and middle men may become gradually overstocked</em>. Consumption is then generally at its best either because one industrial capitalist sets a succession of others in motion, or because the laborers employed by them are fully employed and spend more than ordinarily ... <em>the production of constant capital never takes place for its own sake, but solely because more of this capital is needed in those spheres of production whose products pass into individual consumption</em>. However, this may proceed undisturbed for a while, stimulated by prospective demand, and in such lines the business of merchants and industrial capitalists prospers exceedingly. A crisis occurs whenever the returns of those merchants, who sell at long range, or whose supplies have accumulated also on the home market, become so slow and meager, that the banks press for payment, or the notes for the purchased commodities become due before they have been resold. It is then that forced sales take place, sales made in order to be able to meet payments. And then we have the crash, which brings the deceptive prosperity to a speedy end. (Italics mine. – <em>T.N.V.</em>)</p>
<p class="fst">To be sure, Marx was discussing the turnover of merchants’ capital in the above passage, and describing the development of crisis in a fairly simple, undifferentiated type of capitalism that prevailed a century ago. He could not have foreseen the development of the Permanent War Economy stage of capitalism in decline, where production of the means of destruction becomes an integral “third” department of the economic scene. Constant capital is currently not only produced when needed by industries “whose products pass into individual consumption,” but also – and with equal social acceptability – when needed by industries whose products enter into military consumption. In some cases, the individual product that enters into military consumption is identical with that which enters into individual consumption. The ability of the state thus to subsidize whole industries (mining, for example) materially helps to stabilize the entire economy.</p>
<p>Depending on the character and degree of state intervention in the economy, the traditional course of the capitalist business cycle becomes considerably modified. The possibilities of the boom culminating in sudden, abrupt crisis are remote so long as the political preconditions, nationally and internationally, of the Permanent War Economy obtain. Moreover, economic fact-gathering and knowledge have progressed to the point where any unsold goods are fairly conspicuous. They are either agricultural surpluses bursting out of government warehouses or automobiles bulging in dealers’ showrooms – to mention the two major points where quasi-crisis conditions are presently in the process of developing.</p>
<p>Nevertheless, Marx remains eminently correct in stating that crises tend to originate with the wholesale level of distribution. In this connection, it is most interesting to examine the latest figures on business failures (as published by <strong>Dun’s</strong>, <strong>op. cit.</strong>, p. 32). There were 2,854 failures during the first quarter of 1955 compared with 2,895 during the first quarter of 1954 – a decline of almost two per cent in number of failures. The liabilities represented by these failures declined from $134.6 million to $121.1 million during the year under comparison – a decline of ten per cent. Yet, against this favorable performance for the economy as a whole, <em>wholesale trade is the only sector of the economy where the number and dollar volume of failures rises significantly from the first quarter of 1954 to the first quarter of 1955</em>. The number of failures in wholesale trade increased from 289 to 337 – a rise of 17 per cent; while the dollar volume of the liabilities involved in these failures rose from $12.9 million to $13.7 million – a rise in excess of 6 per cent.</p>
<p>By themselves, these figures could be merely episodic. Yet for the month of March – the latest month for which figures are available – business failures rose 12 per cent over February 1955. According to <strong>Dun’s</strong>, “Casualties were higher only once, in March 1954, in the entire postwar period.” This is the type of cloud on the horizon that may only be a speck today, but tomorrow can be very sizable.<br>
</p>
<p class="fst">THE FUNCTION OF DISTRIBUTION, the turnover of capital in retailing and wholesaling, is fundamentally to realize the values and surplus values embodied in capital employed in production. Only in this manner can the capitalist cycle of M–C–M be completed and the capitalist achieve the profit that is his sole aim in business. When production increases faster than consumption (unless military expenditures consume the entire disproportionate excess of production), there is another cloud on the horizon that is symptomatic of quasi-crisis if it continues to grow.</p>
<p>That all is not serene for the American capitalists may be seen from a glance at the figures on retail and manufacturing sales. Retail sales in 1946, the first postwar year, are reported at $102,488,000,000; in 1954 they were $170,664,000,000 – an increase of <em>67</em> per cent. Manufacturing sales, on the other hand, rose from $151,402,000,000 in 1946 to $287,707,000,000 in 1954 – an increase of <em>90</em> per cent. As a matter of fact, if the comparison is made with 1953, the postwar peak, the increase in retail sales remains the same, 67 per cent, while the increase in manufacturing sales reaches <em>100</em> per cent, as manufacturing sales for 1953 are estimated to have reached over $303 billion.</p>
<p>While a portion of the increase in manufacturing must go to replace the constant capital that has been used up in prior production, and a portion (about $20 billion) goes into increased inventory that is presumably salable, it is clear that a sizable portion of the increase in commodity production (capital) has been immobilized by the state principally in the form of military stockpiles and government storage of agricultural surpluses.</p>
<p>The use of state power, no matter how haphazard or inefficient it may be, for such equilibrium purposes introduces an aspect of planning into the anarchic system of capitalism that neither Marx, Lenin nor Trotsky could have foreseen in detail, as fundamentally the decisive aspects of state intervention and “planning” are products of the Permanent War Economy. Eliminate the threat of Stalinist imperialism, remove the social acceptability to all classes of the huge expenditures for war outlays, destroy the political basis for state intervention in the economy on such a huge scale, and the pre-World War II violent swings in the economy are immediately restored.</p>
<p>The “triumph” of American capitalism today lies not so much in its ability to maintain an historically outmoded social system, but its ability to persuade the masses of the population that the Permanent War Economy is really the Welfare State. This, however, is a separate subject outside the scope of this article.</p>
<p>Another way of expressing the fundamental economic developments that have taken place during the past decade as a result of the huge accumulation of capital is to refer to the increasingly high organic composition of capital, with its consequent rapid increase in productivity of labor. These tendencies we analyzed in Part III, <em>Increasing State Intervention</em>, of the original series on the Permanent War Economy (<em>cf.</em>
<strong>The New International,</strong> May–June 1951, p. 150):</p>
<p class="quoteb">“Precisely where the breaking point is likely to be, no one can say, but it is clear that the composition of capital is already dangerously high and constitutes a sword of Damocles, hanging over the unsuspecting head of such a highly-geared capitalist economy that in a few years it is possible to produce all the automobiles, television sets, etc., that can be sold under capitalist conditions of production.”</p>
<p class="fst">Labor productivity, according to an unpublished study of the Federal Reserve Research Department, may have reached the fantastic figure of between four and eight per cent last year in manufacturing, against a normal current rate of increase of three per cent. The resulting rise in national income has, in turn, given rise to significant increases in personal savings. The forms of savings have recently been studied by Raymond Goldsmith. As reported by Will Lissner in <strong>The New York Times</strong> of May 29, 1955,</p>
<p class="quoteb">“The information already developed has been credited with aiding in the formulation of policies that moderated recent tendencies toward boom and slump. Economists in close touch with the research going on predict that within five years enough will be known about the business cycle to banish major depression from the American economy.”</p>
<p class="fst">What these economists ought more profitably to study is how to sustain the economy once production of the means of destruction declines appreciably below present levels. This is not to be interpreted as a forecast that such will happen. The basic decisions are now <em>political</em> in nature. But the Stalinist peace offensive has as one of its objectives the promotion of a political climate in western Europe and the United States that will bring about a reduction in war outlays on the part of American capitalism. It is by no means excluded that the Stalinists will achieve some degree of success in this part of their strategic aim.</p>
<p>Without speculating about substantial reductions in war outlays, however, there are already evident signs of stress and strain in the field of distribution. The size of the average capital engaged in retail or wholesale trade is smaller than in manufacturing. Its return on sales is less, as it depends on a higher turnover of capital to maintain its share of the average rate of profit. By the same token, however, capital engaged in distribution is more vulnerable to minor changes in the business cycle. From the point of view of monopoly capital, the overwhelming majority of the almost four million enterprises engaged in retail and wholesale distribution are at best necessary evils. If a substantial percentage of merchants’ capital were to disappear, provided that the process did not rock the capitalist boat, monopoly capital would not be unduly concerned. Except for propaganda phrases, consequently, monopoly capital is not at all alarmed about the “mounting disadvantages facing the small-business man,” nor for that matter is monopoly capital the “vigorous defender of the free-enterprise system” that it poses as.</p>
<p>As a matter of historical record, the decisive majority of commodities intended for consumption by individuals is produced by a relatively small number of monopoly capitalists. These manufacturers, except in the case of a few large aggregations of merchants’ capital, are able to ignore with impunity the desires and aspirations of retailers and wholesalers. During the Great Depression of the 1930’s, when the capitalist structure was rocked to its foundations by the ravages of the crisis, monopoly capital engaged in the production of consumer goods sought legislation to enable it to withstand the vicissitudes of competition. The result was the passage of the Miller-Tydings Act of 1937, which exempted manufacturer-retailer price fixing contracts from anti-trust prosecution. This was really the origin of the Fair Trade movement, whereby monopoly capital attempted direct control of the pricing activities of merchants capital.</p>
<p>Under Fair Trade agreements, if a manufacturer enters into a minimum pricing agreement (price fixing agreement) with <em>one</em> retailer in one of the 48 states (there are at present 42 states where this monopoly practice is legal), all other retailers in that state who are selling the same commodity – <em>whether they have signed a Fair Trade agreement or not</em> – are bound to the schedule of prices dictated by the manufacturer. The main argument in favor of Fair Trade has always been that the manufacturer needs protection against those retailers (and wholesalers) who follow the practice of loss leaders; i.e., the manufacturer of a nationally branded and advertised product claims that he has spent considerable sums to establish consumer preference and desire for his product, and the “unscrupulous” retailer sells this product at a loss in order to lure customers into his store, on the theory that once they are in the store they will purchase other merchandise on which he makes his normal profit or more. Certain retailers, especially department stores, have been the main supporters of such price-fixing agreements, as they find it difficult to cope with the competition of specialty stores and discount houses who slash prices on branded merchandise. The fact that the consumer pays more under such monopoly practices as Fair Trade is, after all, relatively unimportant to the monopolist so long as his profit position is adequately maintained.</p>
<p>The legislative history is important in only one respect – as the supplies of civilian products on the market increased in the postwar period, advocates of Fair Trade attempted to solve the problem on a state by state basis, once the Supreme Court declared that the Miller-Tydings Act could not be used to support Fair Trade. They found, however, that this would not work as there was an immediate and obvious conflict with the Federal antitrust laws. Consequently, Congress passed the McGuire Act in 1952 which exempts state Fair Trade laws from the provisions of Federal anti-trust laws. The McGuire Act gives permission to monopoly capital to establish price-fixing agreements at the wholesale and retail level on a state by state basis without fear of prosecution under Federal anti-monopoly laws.<br>
</p>
<p class="fst">THE GROWTH OF FAIR TRADE has been accompanied by an immediate and parallel rise in discount houses, much like the passage of the Prohibition Act was accompanied by the growth of bootlegging. Discount houses are no longer confined to New York and a few large cities. They have spread across the entire country. Everyone is “discount-conscious.” Every commodity that has a list price, or suggested list price, or whose retail price can be established in the minds of the consumer through advertising or any other device, is immediately sold at a discount. The havoc that this process has caused among various types of distributive outlets has given rise to what may properly be termed a veritable crisis in distribution.</p>
<p>Discount houses are not to be confused with retail outlets that have periodic sales. A proper definition would have to confine the term to those retailers that are selling as a regular daily occurrence Fair-Traded merchandise at less than the Fair-Traded prices. How extensive is this practice? The surprising, or perhaps not so surprising, thing is that nobody knows. The estimates vary so widely as to be almost meaningless. Yet, unless there are some quantitative measures, it is impossible to analyze the current crisis in distribution.</p>
<p>The same Annual Report of the Senate Small Business Committee, previously cited, has an interesting chapter on the Distributive Trades, in which we find the following illuminating discussion of the extent of discount houses:</p>
<p class="quoteb">Various estimates have been made of the extent to which these discount houses have made inroads into more normal retail outlets. Spokesmen for the Toy Manufacturers’ Association and the National Retail Dry Goods Association, both of which operate in areas especially vulnerable to the competition of discounters, have provided your committee with their guess that <em>the total sales volume of discount houses is about $5 billion</em>. On the other hand, <em>the United States Chamber of Commerce has given a figure of $25 billion, or five times as great, as its best guess of the extent of business being done by these outlets, most of whose business is done in fair-traded items</em>. On this point, incidentally, the American Fair Trade Council feels that over 80 per cent of the discount houses’ revenue comes from prixe-fixed merchandise, and there seems to be no reason to doubt that the 80 per cent figure is close to the mark.</p>
<p class="quote"><em>Your committee, however, has no means and no data by which it could come to a decision on the relative reliability of either the $5 billion or $25 billion annual revenue estimate. Since it is generally agreed that only 10 per cent of total retail sales in the Nation are in fair-traded goods, the total amount of such business would come to about $18.7 billion</em> with total sales of $187 billion. (<strong>Dun’s</strong> figure for total retail sales is about $170 billion, but the difference is not significant for purposes of this analysis.) Therefore, it would seem that the Chamber of Commerce figure overstates the income of the discounter, but your committee is unable to find any mutually agreed upon level between the $5 billion and $25 billion estimates. Naturally, precise information is not available, since the discount houses do not file reports with any agency of the Government or with any private association regarding the extent of their sales. (Italics mine. – <em>T.N.V.</em>)</p>
<p class="fst">On the other hand, <strong>Housewares Review</strong>, a trade publication, in its May 1955 issue has an article by the editor on the <em>Distribution Revolution</em>. In it, he refers to 10,000 discount houses doing an annual volume of $500 million. To be sure, there are other types of discount operations, including supermarkets and mail order and catalog operations, but the figure given by <strong>Housewares Review</strong> for gross volume of discount houses looks like they placed the decimal in the wrong place. An annual volume of $500 million divided among 10,000 discount stores (the figure seems to be extremely conservative) would yield only $50,000 gross volume per store. A genuine discount house could not exist on such a small volume, as the key to a successful discount operation is large volume on a small mark-up, resulting in a much faster turnover of capital than the average retailer. Surely, a $500,000 average annual volume is more apt to be correct for the typical discount house than $50,000. On this assumption, the annual volume would be $5 billion, coinciding with the estimate of the Toy and Dry Goods Associations cited by the Senate Small Business Committee.</p>
<p>Whatever the actual figures, it is clear that a very substantial percentage of the volume of many commodities, especially certain types of consumer durables, is sold at discount. In fact, E.B. Weiss, one of the main trade analysts of “off-list” selling, in a comprehensive article in <strong>Advertising Age</strong> for April 18, 1955, states:</p>
<p class="quoteb">The president of Webster-Chicago had declared that “in the New York City area, 85 per cent of all major appliances were sold by discount houses in 1964.” That figure is correct as applied to the discount <em>operation</em>: not as applied to the discount house. He also said that the discount house is “tending to become more like a conventional dealer every day” – a statement that is not quite factual. A small handful of discount houses are opening more luxurious outlets and giving more services. But the <em>total discount operation</em> is far from conventional. If anything, the contrary would be a more accurate summation – in other words, the <em>conventional</em> outlet is tending toward the unconventionality of the <em>discount</em> operation – witness the circusy warehouse sales of department stores.</p>
<p class="fst">While, as <strong>Housewares Review</strong> puts it, “The factory list price, made into a legalized point of reference for the discounter, became the discounter’s chief asset,” the fact remains that the average discount house works on a gross margin of 10–20 per cent, whereas the average department store requires a mark-up at least twice that of the discount house. How does the discount house do it? Masters, one of New York’s largest discount houses, has made its figures publicly available. They are analyzed by <strong>Housewares Review</strong>, as follows:</p>
<table align="center" cellpadding="1" cellspacing="1">
<tbody><tr>
<td colspan="3">
<p class="smc"><big><strong>DISCOUNTER AND<br>
DEPARTMENT STORE</strong></big><br>
Costs as a Percentage of Sales</p>
</td>
</tr>
<tr>
<th colspan="3">
<p class="smc">PAYROLL</p>
</th>
</tr>
<tr>
<td>
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>1952<br>
%</em></p>
</td>
<td>
<p class="smc"><em>1953<br>
%</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Dept. Store</p>
</td>
<td>
<p class="smc">17.8</p>
</td>
<td>
<p class="smc">18.5</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Masters</p>
</td>
<td>
<p class="smc">6.1</p>
</td>
<td>
<p class="smc">5.8</p>
</td>
</tr>
<tr>
<td>
<p class="smc"><em>Excess</em></p>
</td>
<td>
<p class="smc">11.7</p>
</td>
<td>
<p class="smc">12.7</p>
</td>
</tr>
<tr>
<th colspan="3">
<p class="smc"> <br>
ALL OTHER EXPENSES</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">Dept. Store</p>
</td>
<td>
<p class="smc">14.8</p>
</td>
<td>
<p class="smc">14.8</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Masters</p>
</td>
<td>
<p class="smc">6.1</p>
</td>
<td>
<p class="smc">5.5</p>
</td>
</tr>
<tr>
<td>
<p class="smc"><em>Excess</em></p>
</td>
<td>
<p class="smc">8.7</p>
</td>
<td>
<p class="smc">9.3</p>
</td>
</tr>
<tr>
<th colspan="3">
<p class="smc"> <br>
TOTAL COSTS</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">Dept. Store</p>
</td>
<td>
<p class="smc">32.6</p>
</td>
<td>
<p class="smc">33.3</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Masters</p>
</td>
<td>
<p class="smc">12.2</p>
</td>
<td>
<p class="smc">11.3</p>
</td>
</tr>
<tr>
<td>
<p class="smc"><em>Excess</em></p>
</td>
<td>
<p class="smc">20.4</p>
</td>
<td>
<p class="smc">22.0</p>
</td>
</tr>
</tbody></table>
<p class="fst">Thus, assuming that merchandise costs are identical (and many of the large discount houses receive larger quantity discounts from most manufacturers than do department stores), the discount house has definitely lower selling costs, lower overhead, and above all lower payroll. With a margin of 20 percentage points, or thereabouts, there is little wonder that the average discount house can undersell the average department store by an appreciable amount – enough to attract the average consumer.<br>
</p>
<p class="fst">THE DISCOUNT HOUSE, and the discount method of operation, have been growing. This is not to imply that all discount houses are prospering and all department stores suffering. Many department stores are doing quite well, and recently a number of discount stores have gone into bankruptcy. Still, however, some old and honored names in retailing have disappeared from the scene: McCreery’s, Wanamaker’s and Hearns in New York, Loeser’s in Brooklyn, O’Neill’s in Baltimore, Famous of Los Angeles, and Alms & Doepke in Cincinnati. There is no doubt that a squeeze is beginning to operate on retail distribution. This is the central aspect of the crisis in distribution. The frantic seeking of other distributive outlets, the general chaos that prevails, are merely symptoms of the falling average rate of profit in distribution at large.</p>
<p>Fair Trade was supposed to have protected the profit margins of the distributor and retailer. Properly policed it was supposed to have eliminated the discounter. At least, that was the theory on which the manufacturer sold the concept to the retailer. When the Supreme Court ruled in 1951 that the Miller-Tydings Act of 1937 applied only to those retailers who actually signed price agreements with manufacturers, large-scale price wars broke out in most major cities, with the result that retailers took the lead, assisted by manufacturers, in pushing through the McGuire Act of 1952. The vote was overwhelming in Congress, 196 to 10 in the House and 64 to 16 in the Senate. Yet after three short years of operation, Fair Trade would seem to be on its way out.</p>
<p>States the Senate Small Business Committee, after reviewing the disparity of statistical estimates on the size of discounting:</p>
<p class="quoteb">Even with that degree of statistical uncertainty, though, it is apparent that discounters do account for a sizable share of the retailing pie. Furthermore, any increase in their sales during the coming year which even closely approximates the growth of the past 12 months will undoubtedly provide a most definite and pragmatic answer to the question of what happens next in the fair-trade puzzle. In the opinion of your committee, a more serious challenge to the fair-trade laws than was ever presented by any court decision arises in the shape of these ever-expanding operations of discount houses located in those States which have resale-price-maintenance laws.</p>
<p class="quote">Based on current observations, your committee concludes that favorable court actions against individual price cutters have proved ineffective in halting such retail outlets. While protracted litigation was under way which was aimed at forcing 1 operator to respect the fair-trade price of 1 manufacturer’s articles, hundreds and thousands of discount houses were cutting prices on hundreds and thousands of fair-traded articles.</p>
<p class="fst">This air of hopelessness of the official watchdog over the health of small business merely reflects the economics of the situation. Discounting on a large scale is here to stay. It exists not only with the tacit support of manufacturers, but with their complete cooperation. It goes without saying that discount houses could not survive for one day without the benevolent support of manufacturers. Many manufacturers supply discount houses openly. Many more use one or more indirect or surreptitious methods of supplying discount houses, so that they can piously inform their more conventional distributive outlets that “they” are not selling the discount houses.<br>
</p>
<p class="fst">THE ENORMOUS INCREASE in the productive capacity of American capitalism has led to a frantic search for every type of market. It is this which is fundamentally responsible for the chaotic condition in distribution. It should be clear that no legal device, Fair Trade or its repeal, or any other patented formula, can serve as a nostrum to remedy the crisis in distribution. Meanwhile, however, the government appears to be getting ready to sponsor repeal of Fair Trade.</p>
<p>The Federal Trade Commission recently, according to <strong>Electrical Merchandising</strong> (a McGraw-Hill publication) for April, 1955, in an article entitled, <em>Is Fair Trade Dying?</em>,</p>
<p class="quoteb">released a letter to retailers refusing to enforce state Pair Trade laws. And to add insult, the Commission advised retailers they could “with impunity” ignore the state laws where they were not being diligently enforced.</p>
<p class="quote">The FTC said that if a manufacturer persists in discriminatory or lax enforcement of his Fair Trade contracts “he has forfeited his rights to enforcement and there is no longer any legal obligation – or at least any legally enforceable obligation – upon a retailer to observe the manufacturer’s fixed prices.”</p>
<p class="quote">The commission went on to advise retailers to “resort to various avenues of self-help.” Among the avenues suggested: <em>disregard the fixed price “and compete on a price basis with the discount house.”</em></p>
<p class="quote">The FTC concluded, “It cannot seriously be suggested that price competition is morally reprehensible. A retailer forced to cut prices to compete ... could do so with impunity.”</p>
<p class="quote">Hard on the heels of this FTC letter came Attorney General Brownell’s long-heralded and long-delayed study. Formed in 1953 to review the whole structure of anti-trust legislation, the Brownell committee was composed of 60 top lawyers and economists.</p>
<p class="quote">In strong words, the committee’s report attacked the federal laws which exempt Fair Trade agreements from antitrust action.</p>
<p class="quote">The report said, “We regard the Federal statutory exemption of Fair Trade pricing as an unwarranted compromise of the basic tenets of national anti-trust policy. The throttling of price competition in the process of distribution that attends Fair Trade pricing is, in our opinion, a deplorable yet inevitable concomitant of Federal exemptive laws.</p>
<p class="quoteb">“We therefore recommend Congressional repeal both of the Miller-Tydings amendment to the Sherman Act and the McGuire amendment to the Federal Trade Commission Act, thereby subjecting resale-price maintenance as other price-fixing practices, to those Federal anti-trust controls which safeguard the public by keeping the channels of distribution free.” (Italics mine. – <em>T.N.V.</em>)</p>
<p class="fst">The Administration is thus squarely behind repeal of Fair Trade. Whether immediate legislation will result is doubtful, but it makes little difference so far as the over-all problem is concerned. While some manufacturers will state that they favor continuation of Fair Trade, more and more retailers are moving in the direction of advocating repeal of Fair Trade.</p>
<p>In fact, Attorney General Brownell in a speech before the Annual Conference of the NRDGA (reported in <strong>Retailing Daily</strong> of April 4, 1955) tried to convince the department store owners (apparently, without too much resistance) that they would be aided in their fight against discount houses by repeal of Fair Trade.</p>
<p class="quoteb">He suggested that the discounter probably owes more to fair trade than anyone else since it gives him a fixed ceiling and makes it a simple matter to undersell those retailers bound by fair trade contracts....</p>
<p class="quote">“It may be that elimination of fair trade would hamper the operations of discounters to a greater extent than it would hurt those who have so earnestly sought the protection of fair trade!” ...</p>
<p class="quote">The Attorney General’s declaration constituted his first detailed discussion of fair trade “price-fixing” as the Justice Department sees it. Included in his reasoning were these fundamental points:</p>
<p class="quote">Although fair trade legislation was supposed to help small retailers compete with chain stores and other large outlets, “the anticipated benefits have been somewhat illusory.”</p>
<p class="quote">Fair trade handicaps those small retailers who cannot afford extensive advertising, or elaborate establishments or services and whose best hope of attracting customers is in charging lower prices ...</p>
<p class="quote">The argument of some manufacturers that fair trade is needed to protect the small merchant has “a somewhat false ring” when they admit they have engaged in manufacturing for sale under private brand an article identical, except for a different brand name, with the fair traded item.</p>
<p class="quote">One of his major conclusions was when “He said it ‘seems evident’ that the absence of competitive pricing under fair trade results in higher prices for the consumer and that consumers are deprived of the opportunity of ‘shopping around’ for the same product priced competitively and advertised freely by different retailers.”</p>
<p class="fst">It would thus seem fairly clear that despite the development of state monopoly capitalism and the Permanent War Economy, with all the modifications that have taken place in the structure of capitalism, some of the basic laws of capitalism still operate. The trends toward concentration of capital, and its increasing organic composition, that Marx observed and analyzed are still at work. Competition is still cannibalistic in its impact, especially on smaller aggregations of capital. The crisis in distribution and its continuation are both inevitable and incurable. They are a reflection of the fact that American capitalism, despite its tremendous wealth, is in reality a sick economy.</p>
<p>The fact that capitalist crisis does not appear in traditional form, as a sudden curtailing of credit at the peak of a boom, with resultant forced liquidations on an extensive scale, does not at all mean that capitalism has solved the problem of the business cycle, or that capitalist prosperity is permanent. On the contrary, as we have repeatedly observed, unless there is a constantly increasing ratio of war outlays to total output, the equilibrium becomes more and more precarious until it is finally upset.</p>
<p>The dead weight of mass unemployment will become more and more a powerful social and political lever, despite the fact that the increase in unemployment is uneven and gradual, and despite the fact that the labor movement has lost much of its militancy. In 1949, unemployment reached a postwar peak averaging 3.4 million for the year. The equilibrium of the economy was certainly endangered at that point. But, fortunately for American capitalism, the Korean war was launched by Stalin at just the right time. Unemployment which had averaged 3.1 million in 1950, declined to 1.9 million in 1951, 1.7 million in 1952, and 1.5 million in 1953, but in 1954 unemployment rose to an average of 3.2 million.</p>
<p>It is impossible to predict at what level (four, five or six million) unemployment will become such a dead weight on the entire economy that the far-reaching nature of the present crisis will be apparent to all. The fate of small business may be of only passing interest to monopoly capital, but its decline tends to aggravate the unemployment problem, and of course its demise is hastened by rising unemployment. If 1955 becomes the most prosperous (profitable) or the second-most prosperous (profitable) year in the history of American capitalism, with unemployment remaining at about the three million level, then what will happen to unemployment when there is a 5–10 per cent decline in production? And the crisis in distribution is a sure sign that in the not-too-distant future there will be a fall-off in production!</p>
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May 1955</p>
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<p class="author">T.N. Vance<br>
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T.N. Vance
The Crisis in Distribution
(May 1955)
From The New International, Vol. XXI No. 2, Summer 1955, pp. 86–98.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
While the economy keeps rolling on to new peaks of prosperity, with high levels of production and profits, there are some clouds on the horizon. These may be small, but they can grow. Moreover, they are discernible to more or less orthodox supporters of the present system. Above all, they perturb the defenders of small business.
The Annual Report of the Select Committee on Small Business (of the United States Senate, 84th Congress, 1st Session, Report No. 129) in its report of March 1955 has this to say in its introduction:
A searching appraisal of the position of small business within our economy during 1954 does not provide a basis for viewing the future of small, independent enterprises with complacence. In a sense, 1954 was a “normal” year. No war galvanized the industrial community. No depression swept large numbers of small enterprises out of existence. Indeed, the somewhat slower tempo of business activity which became apparent in 1953 and carried over into the first quarters of 1954, quickened perceptibly during the closing months of 1954. It may be assumed that a well-founded spirit of optimism about the immediate business outlook was responsible for the 11,981 business incorporations in December, the highest monthly total since January of 1947, and for the full-year total of 117,164 incorporations which exceeded those of each year since 1947. On the other hand, 10,300 fewer businesses of all types started in the first 6 months of 1954, compared with the same period of 1953, and Dun & Bradstreet recorded 2,224 more failures involving court proceedings or voluntary action likely to end in loss to creditors in 1954 than in 1953.
Your committee realizes, however, that it is easy for selective indices to mislead those who hold that what seems good for the economy as a whole must of necessity also be good for small business. The fate of small, independent businesses is not chained by natural law to the more narrowly fluctuating fortunes of the larger and hardier units within the industrial complex. Countertrends are not only possible, but clearly discernible.
To a businessman, the proof of the pudding must be in the profits. And it is precisely in the profit position of smaller manufacturing enterprises that your committee detects one of the basic aspects of the current small-business situation which is most disturbing. Whether measured by percentage of stockholders’ equity or by percentage of dollars of sales, the profits of smaller manufacturing corporations, after taxes, have shrunk since 1952, while, with few exceptions, the profits of the largest corporations have increased ...
Profits as a percentage of dollar sales present a similar picture for the first 6 months of 1952, compared with the first half of 1954. On this basis, the smallest group’s money-making ability declined 60.9 per cent, while the biggest corporations showed an increase of 10.5 per cent. In addition, the small manufacturer’s share of total sales has drifted downward from 19 per cent in 1947 to 14 per cent in 1953, a trend which, if unchecked, can easily assume alarming significance.
These and other factors strongly suggest to your committee that there are obscure, complex, and underlying forces at work within our economy that are inimical to the future of small, independent enterprise. To discover and correct these causes of the mounting disadvantages facing the small-business man should be a major concern of all who want to see preserved the vigor of our free-enterprise system....
Your committee has long been deeply disturbed over the multiplying evidences of concentration of economic power in the managements of a relatively few huge corporations. Oligarchic control over groups of vital industries, even though such control may be exercised within the letter of the law, must inevitably exert a contracting influence on freedom of endeavor. In each of its annual reports since 1951, your committee has stressed its belief that the threat of monopoly has not lessened, not remained constant, but has, in fact, assumed more menacing proportions. It would, indeed, not be stating the case with excessive emphasis to say that your committee’s uneasiness of former years has turned to grave apprehension.” (Italics mine – T.N.V.)
The above findings, it should be emphasized, are those of the Senate Small Business Committee. Their concern over the growth of monopoly and the consequent weakening of small business is reinforced by the still more recent study of the Federal Trade Commission. As reported in The New York Times of May 20, 1955: “Business mergers, while still well below the pre-depression levels of the late Nineteen Twenties, are running at three times the 1949 rate.” The FTC “gave two major reasons for the current merger wave: an urge to expand production and an inability of smaller companies to get adequate financing for expansion.” (Italics mine. – T.N.V.)
The tremendous accumulation of capital that has taken place in recent years is beginning to be accompanied by a fall in the rate of profit – attacking first the smaller capitalists. The process is not an unexpected one. In discussing the relationships between accumulation of capital and the rate of profit, Marx states (Capital, Vol. III, p. 283):
A fall in the rate of profit and a hastening of accumulation are in so far only different expressions of the same process as both of them indicate the development of the productive power. Accumulation in its turn hastens the fall of the rate of profit, inasmuch as it implies the concentration of labor on a large scale and thereby a higher composition of capital. On the other hand, a fall in the rate of profit hastens the concentration of capital and its centralization through the expropriation of the smaller capitalists, the expropriation of the last survivors of the direct producers who still have anything to give up. This accelerates on one hand the accumulation, so far as mass is concerned, although the rate of accumulation falls with the rate of profit.
It may be objected that profits increased in 1954, but the increase did not help the rate of profit. This, moreover, is true of leading corporations. In the annual study of the National City Bank, contained in the April 1955 Monthly Letter, the return on net assets declined (for 3,442 leading corporations) from 10.6 per cent in 1953 to 10.3 per cent in 1954 despite a four per cent increase in reported net income after taxes. Imagine what the results would have been if not for the tax swindle law of 1954! States the National City Bank:
In the manufacturing industries, which in number of companies and capital investment comprise over half of the totals for all lines of business included in our tabulation, the 1,778 reporting companies show combined net income up 4 per cent. Tax details given by the larger companies indicate that in 1954, on an overall volume of sales about 5 per cent lower than in 1953, pre-tax earnings were down 10 per cent. Liability for federal income and excess profits taxes declined by 25 per cent, with the portion of pretax earnings absorbed by such taxes in the two years declining from an average of 53 to 45 per cent.” (Italics mine. – T.N.V.)
The dependence of private capitalists on the capitalist state for maintenance of the profits of the bourgeoisie as a class is thus shown in a relatively new and graphic form. Profits, of course, remain the end-purpose of economic activity (“the proof of the pudding”) under capitalism.
One of the main props of the prosperity in the first half of 1955 has been the automobile industry. Never before in history has American capitalism produced automobiles at such fantastic rates. According to Dun’s Review and Modern Industry for May 1955,
More cars were produced in the first quarter than in any other quarter in history. The record total of 781,000 cars reached in March was almost matched in April (a shorter month) as production continued at, the starting rate of about 30,000 cars per day, which means that cars have been rolling off the assembly likes at the rate of one each three seconds, night and day ... During the first half of 1955 more than 4 million cars will probably be made. Before 1949 there had been only one year – 1929 – in which more than 4 million cars were made during an entire year.
Profits of the big three (GM, Ford and Chrysler) have been huge. The smaller automobile companies have been forced to merge in an attempt to remain alive. Meanwhile, what has happened to the dealers? They are not doing so well; in fact, they are not sharing in the profits of the big automobile manufacturers at all. Nor is the outlook likely to improve, as dealers have been forced to take unprecedented quantities of cars from the manufacturers. The same analysis in Dun’s goes on to say:
The supplies of new cars with dealers rose noticeably to 624,277 in the beginning of April, to reach a postwar peak. However, at the present rate of sales which have been outrunning output, new car inventories are entirely reasonable. Notwithstanding the expansion in sales, The National Automobile Dealers Association reports that operating profits for new car and truck dealers are the worst in fifteen years. (Italics mine. – T.N.V.)
IT IS NOT ONLY the small manufacturer, but the small business man in general whose position is steadily worsening, while monopoly capital is steadily strengthened. These fundamental trends of a capitalism that has outlived its historical usefulness more than a generation ago are reinforced and accelerated by the development of the Permanent War Economy. War outlays are necessarily concentrated in large aggregations of capital. The Senate Small Business Committee, in the previously cited report, states in the chapter on Military Procurement that
“all business and Government agencies have experienced dislocations due to the conversion from the highly geared war economy of the Korean war period to a reduced defense-production economy. This transition period has been fraught with changes in Government buying policies, which have caused much concern within the ranks of small business and among Government officials charged with the responsibility of procurement functions.”
Later on, it becomes clear that the concern is with “negotiated” contracts, as small business is suspicious of all contracts awarded by negotiation. When to this attitude is added the fact that “Since 1950 approximately 90 per cent of the dollar value of all purchasing has been awarded by negotiation, and the emergency exception has been widely used to justify this sharp departure from the basic method of advertising,” it becomes clear that despite all the double-talk small business has not been doing so well in receiving military contracts.
Perhaps, if large-scale war outlays do not mean increased business for small enterprises at the manufacturing level, small retailers benefit from the existence of the Permanent War Economy. Not very directly, according to the Hoover Commission Report on Business Enterprises, for the digest published by the Research Department of the Citizens Committee for the Hoover Report bemoans the fact that government is allegedly taking business away from private enterprise by various forms of government enterprise. The magnitude of the competition is indicated by the volume of business done by commissary stores and post exchanges. The annual figures cited are as follows:
199 commissary stores in the US
$185,000,000
239 commissary stores abroad
121,000,000
450 post exchanges in the US
470,000,000
2,700 post exchanges abroad
540,000,000
Thus, over $1.3 billion of sales are “lost” by retailers. The Hoover Commission observes that
The whole operation [of commissary stores] is at least a vivid illustration of how bureaucracy can expand against the intent of the Congress, accompanied by a failure to include real costs. The real justification of the continued operation of most of these stores is a “fringe benefit” to the military personnel and their families.
The question arises as to whether ... increased salary payments ... would not be more consonant with sustaining our economic system.
What hurts is not only the loss of business, but the fact that millions of servicemen, and through them their families, are able to purchase a variety of commodities at substantial reductions from prevailing retail prices. From the point of view of the military budget, it would obviously be poor economy to raise military salaries in order to provide military personnel with purchasing power comparable to civilians.
Such considerations do not intrude upon the cerebrations of the Hoover Commission, who conclude by asking: “Is this [government enterprises] ‘creeping socialism’?” The answer is a model of its kind:
“Most of these projects were started for what, at the time, appeared to be justifiable operating reasons. Therefore, we cannot say that they were socialistic in intent. However, their perpetuation beyond the emergency period has led to the tremendous increase in the rate of growth of government wealth – as compared to private wealth – which the Harden Subcommittee cited. This is certainly an alarming symptom. Further, the rate is such as to suggest that ‘running’ is a more apt description than ‘creeping’.”
Not only is large-scale manufacturing prospering, but retail business is running about 8 per cent ahead of a year ago. Perhaps there has been some slight decline in the rate of profit, and perhaps small manufacturers are having their problems but, state the apologists of the bourgeoisie, 1955 will be the best or second-best year on record. Not only will we have “two cars in every garage” (who was it who said “two chickens in every pot”?), but eventually “every family will have three cars.” This pious wish is supposed to solve the problem of maintaining the present high rate of automobile sales in the latter part of the year.
The first signs of trouble occur as a rule, not merely in the difficulties that small businesses have in surviving, but in wholesale distribution. Marx puts it this way (Capital, Vol. III, p. 359):
Hence we note the phenomenon that crises do not show themselves, nor break forth, first in the retail business, which deals with direct consumption, but in the spheres of wholesale business and banking, by which the money-capital of society is placed at the disposal of wholesale business.
The manufacturer may actually sell to the exporter, and the exporter may in his turn sell to his foreign customer, the importer may sell his raw materials to the manufacturer, and the manufacturer his products to the wholesale dealer, etc. But at some particular and unseen point, the goods may lie unsold. On some other occasion, again, the supplies of all producers and middle men may become gradually overstocked. Consumption is then generally at its best either because one industrial capitalist sets a succession of others in motion, or because the laborers employed by them are fully employed and spend more than ordinarily ... the production of constant capital never takes place for its own sake, but solely because more of this capital is needed in those spheres of production whose products pass into individual consumption. However, this may proceed undisturbed for a while, stimulated by prospective demand, and in such lines the business of merchants and industrial capitalists prospers exceedingly. A crisis occurs whenever the returns of those merchants, who sell at long range, or whose supplies have accumulated also on the home market, become so slow and meager, that the banks press for payment, or the notes for the purchased commodities become due before they have been resold. It is then that forced sales take place, sales made in order to be able to meet payments. And then we have the crash, which brings the deceptive prosperity to a speedy end. (Italics mine. – T.N.V.)
To be sure, Marx was discussing the turnover of merchants’ capital in the above passage, and describing the development of crisis in a fairly simple, undifferentiated type of capitalism that prevailed a century ago. He could not have foreseen the development of the Permanent War Economy stage of capitalism in decline, where production of the means of destruction becomes an integral “third” department of the economic scene. Constant capital is currently not only produced when needed by industries “whose products pass into individual consumption,” but also – and with equal social acceptability – when needed by industries whose products enter into military consumption. In some cases, the individual product that enters into military consumption is identical with that which enters into individual consumption. The ability of the state thus to subsidize whole industries (mining, for example) materially helps to stabilize the entire economy.
Depending on the character and degree of state intervention in the economy, the traditional course of the capitalist business cycle becomes considerably modified. The possibilities of the boom culminating in sudden, abrupt crisis are remote so long as the political preconditions, nationally and internationally, of the Permanent War Economy obtain. Moreover, economic fact-gathering and knowledge have progressed to the point where any unsold goods are fairly conspicuous. They are either agricultural surpluses bursting out of government warehouses or automobiles bulging in dealers’ showrooms – to mention the two major points where quasi-crisis conditions are presently in the process of developing.
Nevertheless, Marx remains eminently correct in stating that crises tend to originate with the wholesale level of distribution. In this connection, it is most interesting to examine the latest figures on business failures (as published by Dun’s, op. cit., p. 32). There were 2,854 failures during the first quarter of 1955 compared with 2,895 during the first quarter of 1954 – a decline of almost two per cent in number of failures. The liabilities represented by these failures declined from $134.6 million to $121.1 million during the year under comparison – a decline of ten per cent. Yet, against this favorable performance for the economy as a whole, wholesale trade is the only sector of the economy where the number and dollar volume of failures rises significantly from the first quarter of 1954 to the first quarter of 1955. The number of failures in wholesale trade increased from 289 to 337 – a rise of 17 per cent; while the dollar volume of the liabilities involved in these failures rose from $12.9 million to $13.7 million – a rise in excess of 6 per cent.
By themselves, these figures could be merely episodic. Yet for the month of March – the latest month for which figures are available – business failures rose 12 per cent over February 1955. According to Dun’s, “Casualties were higher only once, in March 1954, in the entire postwar period.” This is the type of cloud on the horizon that may only be a speck today, but tomorrow can be very sizable.
THE FUNCTION OF DISTRIBUTION, the turnover of capital in retailing and wholesaling, is fundamentally to realize the values and surplus values embodied in capital employed in production. Only in this manner can the capitalist cycle of M–C–M be completed and the capitalist achieve the profit that is his sole aim in business. When production increases faster than consumption (unless military expenditures consume the entire disproportionate excess of production), there is another cloud on the horizon that is symptomatic of quasi-crisis if it continues to grow.
That all is not serene for the American capitalists may be seen from a glance at the figures on retail and manufacturing sales. Retail sales in 1946, the first postwar year, are reported at $102,488,000,000; in 1954 they were $170,664,000,000 – an increase of 67 per cent. Manufacturing sales, on the other hand, rose from $151,402,000,000 in 1946 to $287,707,000,000 in 1954 – an increase of 90 per cent. As a matter of fact, if the comparison is made with 1953, the postwar peak, the increase in retail sales remains the same, 67 per cent, while the increase in manufacturing sales reaches 100 per cent, as manufacturing sales for 1953 are estimated to have reached over $303 billion.
While a portion of the increase in manufacturing must go to replace the constant capital that has been used up in prior production, and a portion (about $20 billion) goes into increased inventory that is presumably salable, it is clear that a sizable portion of the increase in commodity production (capital) has been immobilized by the state principally in the form of military stockpiles and government storage of agricultural surpluses.
The use of state power, no matter how haphazard or inefficient it may be, for such equilibrium purposes introduces an aspect of planning into the anarchic system of capitalism that neither Marx, Lenin nor Trotsky could have foreseen in detail, as fundamentally the decisive aspects of state intervention and “planning” are products of the Permanent War Economy. Eliminate the threat of Stalinist imperialism, remove the social acceptability to all classes of the huge expenditures for war outlays, destroy the political basis for state intervention in the economy on such a huge scale, and the pre-World War II violent swings in the economy are immediately restored.
The “triumph” of American capitalism today lies not so much in its ability to maintain an historically outmoded social system, but its ability to persuade the masses of the population that the Permanent War Economy is really the Welfare State. This, however, is a separate subject outside the scope of this article.
Another way of expressing the fundamental economic developments that have taken place during the past decade as a result of the huge accumulation of capital is to refer to the increasingly high organic composition of capital, with its consequent rapid increase in productivity of labor. These tendencies we analyzed in Part III, Increasing State Intervention, of the original series on the Permanent War Economy (cf.
The New International, May–June 1951, p. 150):
“Precisely where the breaking point is likely to be, no one can say, but it is clear that the composition of capital is already dangerously high and constitutes a sword of Damocles, hanging over the unsuspecting head of such a highly-geared capitalist economy that in a few years it is possible to produce all the automobiles, television sets, etc., that can be sold under capitalist conditions of production.”
Labor productivity, according to an unpublished study of the Federal Reserve Research Department, may have reached the fantastic figure of between four and eight per cent last year in manufacturing, against a normal current rate of increase of three per cent. The resulting rise in national income has, in turn, given rise to significant increases in personal savings. The forms of savings have recently been studied by Raymond Goldsmith. As reported by Will Lissner in The New York Times of May 29, 1955,
“The information already developed has been credited with aiding in the formulation of policies that moderated recent tendencies toward boom and slump. Economists in close touch with the research going on predict that within five years enough will be known about the business cycle to banish major depression from the American economy.”
What these economists ought more profitably to study is how to sustain the economy once production of the means of destruction declines appreciably below present levels. This is not to be interpreted as a forecast that such will happen. The basic decisions are now political in nature. But the Stalinist peace offensive has as one of its objectives the promotion of a political climate in western Europe and the United States that will bring about a reduction in war outlays on the part of American capitalism. It is by no means excluded that the Stalinists will achieve some degree of success in this part of their strategic aim.
Without speculating about substantial reductions in war outlays, however, there are already evident signs of stress and strain in the field of distribution. The size of the average capital engaged in retail or wholesale trade is smaller than in manufacturing. Its return on sales is less, as it depends on a higher turnover of capital to maintain its share of the average rate of profit. By the same token, however, capital engaged in distribution is more vulnerable to minor changes in the business cycle. From the point of view of monopoly capital, the overwhelming majority of the almost four million enterprises engaged in retail and wholesale distribution are at best necessary evils. If a substantial percentage of merchants’ capital were to disappear, provided that the process did not rock the capitalist boat, monopoly capital would not be unduly concerned. Except for propaganda phrases, consequently, monopoly capital is not at all alarmed about the “mounting disadvantages facing the small-business man,” nor for that matter is monopoly capital the “vigorous defender of the free-enterprise system” that it poses as.
As a matter of historical record, the decisive majority of commodities intended for consumption by individuals is produced by a relatively small number of monopoly capitalists. These manufacturers, except in the case of a few large aggregations of merchants’ capital, are able to ignore with impunity the desires and aspirations of retailers and wholesalers. During the Great Depression of the 1930’s, when the capitalist structure was rocked to its foundations by the ravages of the crisis, monopoly capital engaged in the production of consumer goods sought legislation to enable it to withstand the vicissitudes of competition. The result was the passage of the Miller-Tydings Act of 1937, which exempted manufacturer-retailer price fixing contracts from anti-trust prosecution. This was really the origin of the Fair Trade movement, whereby monopoly capital attempted direct control of the pricing activities of merchants capital.
Under Fair Trade agreements, if a manufacturer enters into a minimum pricing agreement (price fixing agreement) with one retailer in one of the 48 states (there are at present 42 states where this monopoly practice is legal), all other retailers in that state who are selling the same commodity – whether they have signed a Fair Trade agreement or not – are bound to the schedule of prices dictated by the manufacturer. The main argument in favor of Fair Trade has always been that the manufacturer needs protection against those retailers (and wholesalers) who follow the practice of loss leaders; i.e., the manufacturer of a nationally branded and advertised product claims that he has spent considerable sums to establish consumer preference and desire for his product, and the “unscrupulous” retailer sells this product at a loss in order to lure customers into his store, on the theory that once they are in the store they will purchase other merchandise on which he makes his normal profit or more. Certain retailers, especially department stores, have been the main supporters of such price-fixing agreements, as they find it difficult to cope with the competition of specialty stores and discount houses who slash prices on branded merchandise. The fact that the consumer pays more under such monopoly practices as Fair Trade is, after all, relatively unimportant to the monopolist so long as his profit position is adequately maintained.
The legislative history is important in only one respect – as the supplies of civilian products on the market increased in the postwar period, advocates of Fair Trade attempted to solve the problem on a state by state basis, once the Supreme Court declared that the Miller-Tydings Act could not be used to support Fair Trade. They found, however, that this would not work as there was an immediate and obvious conflict with the Federal antitrust laws. Consequently, Congress passed the McGuire Act in 1952 which exempts state Fair Trade laws from the provisions of Federal anti-trust laws. The McGuire Act gives permission to monopoly capital to establish price-fixing agreements at the wholesale and retail level on a state by state basis without fear of prosecution under Federal anti-monopoly laws.
THE GROWTH OF FAIR TRADE has been accompanied by an immediate and parallel rise in discount houses, much like the passage of the Prohibition Act was accompanied by the growth of bootlegging. Discount houses are no longer confined to New York and a few large cities. They have spread across the entire country. Everyone is “discount-conscious.” Every commodity that has a list price, or suggested list price, or whose retail price can be established in the minds of the consumer through advertising or any other device, is immediately sold at a discount. The havoc that this process has caused among various types of distributive outlets has given rise to what may properly be termed a veritable crisis in distribution.
Discount houses are not to be confused with retail outlets that have periodic sales. A proper definition would have to confine the term to those retailers that are selling as a regular daily occurrence Fair-Traded merchandise at less than the Fair-Traded prices. How extensive is this practice? The surprising, or perhaps not so surprising, thing is that nobody knows. The estimates vary so widely as to be almost meaningless. Yet, unless there are some quantitative measures, it is impossible to analyze the current crisis in distribution.
The same Annual Report of the Senate Small Business Committee, previously cited, has an interesting chapter on the Distributive Trades, in which we find the following illuminating discussion of the extent of discount houses:
Various estimates have been made of the extent to which these discount houses have made inroads into more normal retail outlets. Spokesmen for the Toy Manufacturers’ Association and the National Retail Dry Goods Association, both of which operate in areas especially vulnerable to the competition of discounters, have provided your committee with their guess that the total sales volume of discount houses is about $5 billion. On the other hand, the United States Chamber of Commerce has given a figure of $25 billion, or five times as great, as its best guess of the extent of business being done by these outlets, most of whose business is done in fair-traded items. On this point, incidentally, the American Fair Trade Council feels that over 80 per cent of the discount houses’ revenue comes from prixe-fixed merchandise, and there seems to be no reason to doubt that the 80 per cent figure is close to the mark.
Your committee, however, has no means and no data by which it could come to a decision on the relative reliability of either the $5 billion or $25 billion annual revenue estimate. Since it is generally agreed that only 10 per cent of total retail sales in the Nation are in fair-traded goods, the total amount of such business would come to about $18.7 billion with total sales of $187 billion. (Dun’s figure for total retail sales is about $170 billion, but the difference is not significant for purposes of this analysis.) Therefore, it would seem that the Chamber of Commerce figure overstates the income of the discounter, but your committee is unable to find any mutually agreed upon level between the $5 billion and $25 billion estimates. Naturally, precise information is not available, since the discount houses do not file reports with any agency of the Government or with any private association regarding the extent of their sales. (Italics mine. – T.N.V.)
On the other hand, Housewares Review, a trade publication, in its May 1955 issue has an article by the editor on the Distribution Revolution. In it, he refers to 10,000 discount houses doing an annual volume of $500 million. To be sure, there are other types of discount operations, including supermarkets and mail order and catalog operations, but the figure given by Housewares Review for gross volume of discount houses looks like they placed the decimal in the wrong place. An annual volume of $500 million divided among 10,000 discount stores (the figure seems to be extremely conservative) would yield only $50,000 gross volume per store. A genuine discount house could not exist on such a small volume, as the key to a successful discount operation is large volume on a small mark-up, resulting in a much faster turnover of capital than the average retailer. Surely, a $500,000 average annual volume is more apt to be correct for the typical discount house than $50,000. On this assumption, the annual volume would be $5 billion, coinciding with the estimate of the Toy and Dry Goods Associations cited by the Senate Small Business Committee.
Whatever the actual figures, it is clear that a very substantial percentage of the volume of many commodities, especially certain types of consumer durables, is sold at discount. In fact, E.B. Weiss, one of the main trade analysts of “off-list” selling, in a comprehensive article in Advertising Age for April 18, 1955, states:
The president of Webster-Chicago had declared that “in the New York City area, 85 per cent of all major appliances were sold by discount houses in 1964.” That figure is correct as applied to the discount operation: not as applied to the discount house. He also said that the discount house is “tending to become more like a conventional dealer every day” – a statement that is not quite factual. A small handful of discount houses are opening more luxurious outlets and giving more services. But the total discount operation is far from conventional. If anything, the contrary would be a more accurate summation – in other words, the conventional outlet is tending toward the unconventionality of the discount operation – witness the circusy warehouse sales of department stores.
While, as Housewares Review puts it, “The factory list price, made into a legalized point of reference for the discounter, became the discounter’s chief asset,” the fact remains that the average discount house works on a gross margin of 10–20 per cent, whereas the average department store requires a mark-up at least twice that of the discount house. How does the discount house do it? Masters, one of New York’s largest discount houses, has made its figures publicly available. They are analyzed by Housewares Review, as follows:
DISCOUNTER AND
DEPARTMENT STORE
Costs as a Percentage of Sales
PAYROLL
1952
%
1953
%
Dept. Store
17.8
18.5
Masters
6.1
5.8
Excess
11.7
12.7
ALL OTHER EXPENSES
Dept. Store
14.8
14.8
Masters
6.1
5.5
Excess
8.7
9.3
TOTAL COSTS
Dept. Store
32.6
33.3
Masters
12.2
11.3
Excess
20.4
22.0
Thus, assuming that merchandise costs are identical (and many of the large discount houses receive larger quantity discounts from most manufacturers than do department stores), the discount house has definitely lower selling costs, lower overhead, and above all lower payroll. With a margin of 20 percentage points, or thereabouts, there is little wonder that the average discount house can undersell the average department store by an appreciable amount – enough to attract the average consumer.
THE DISCOUNT HOUSE, and the discount method of operation, have been growing. This is not to imply that all discount houses are prospering and all department stores suffering. Many department stores are doing quite well, and recently a number of discount stores have gone into bankruptcy. Still, however, some old and honored names in retailing have disappeared from the scene: McCreery’s, Wanamaker’s and Hearns in New York, Loeser’s in Brooklyn, O’Neill’s in Baltimore, Famous of Los Angeles, and Alms & Doepke in Cincinnati. There is no doubt that a squeeze is beginning to operate on retail distribution. This is the central aspect of the crisis in distribution. The frantic seeking of other distributive outlets, the general chaos that prevails, are merely symptoms of the falling average rate of profit in distribution at large.
Fair Trade was supposed to have protected the profit margins of the distributor and retailer. Properly policed it was supposed to have eliminated the discounter. At least, that was the theory on which the manufacturer sold the concept to the retailer. When the Supreme Court ruled in 1951 that the Miller-Tydings Act of 1937 applied only to those retailers who actually signed price agreements with manufacturers, large-scale price wars broke out in most major cities, with the result that retailers took the lead, assisted by manufacturers, in pushing through the McGuire Act of 1952. The vote was overwhelming in Congress, 196 to 10 in the House and 64 to 16 in the Senate. Yet after three short years of operation, Fair Trade would seem to be on its way out.
States the Senate Small Business Committee, after reviewing the disparity of statistical estimates on the size of discounting:
Even with that degree of statistical uncertainty, though, it is apparent that discounters do account for a sizable share of the retailing pie. Furthermore, any increase in their sales during the coming year which even closely approximates the growth of the past 12 months will undoubtedly provide a most definite and pragmatic answer to the question of what happens next in the fair-trade puzzle. In the opinion of your committee, a more serious challenge to the fair-trade laws than was ever presented by any court decision arises in the shape of these ever-expanding operations of discount houses located in those States which have resale-price-maintenance laws.
Based on current observations, your committee concludes that favorable court actions against individual price cutters have proved ineffective in halting such retail outlets. While protracted litigation was under way which was aimed at forcing 1 operator to respect the fair-trade price of 1 manufacturer’s articles, hundreds and thousands of discount houses were cutting prices on hundreds and thousands of fair-traded articles.
This air of hopelessness of the official watchdog over the health of small business merely reflects the economics of the situation. Discounting on a large scale is here to stay. It exists not only with the tacit support of manufacturers, but with their complete cooperation. It goes without saying that discount houses could not survive for one day without the benevolent support of manufacturers. Many manufacturers supply discount houses openly. Many more use one or more indirect or surreptitious methods of supplying discount houses, so that they can piously inform their more conventional distributive outlets that “they” are not selling the discount houses.
THE ENORMOUS INCREASE in the productive capacity of American capitalism has led to a frantic search for every type of market. It is this which is fundamentally responsible for the chaotic condition in distribution. It should be clear that no legal device, Fair Trade or its repeal, or any other patented formula, can serve as a nostrum to remedy the crisis in distribution. Meanwhile, however, the government appears to be getting ready to sponsor repeal of Fair Trade.
The Federal Trade Commission recently, according to Electrical Merchandising (a McGraw-Hill publication) for April, 1955, in an article entitled, Is Fair Trade Dying?,
released a letter to retailers refusing to enforce state Pair Trade laws. And to add insult, the Commission advised retailers they could “with impunity” ignore the state laws where they were not being diligently enforced.
The FTC said that if a manufacturer persists in discriminatory or lax enforcement of his Fair Trade contracts “he has forfeited his rights to enforcement and there is no longer any legal obligation – or at least any legally enforceable obligation – upon a retailer to observe the manufacturer’s fixed prices.”
The commission went on to advise retailers to “resort to various avenues of self-help.” Among the avenues suggested: disregard the fixed price “and compete on a price basis with the discount house.”
The FTC concluded, “It cannot seriously be suggested that price competition is morally reprehensible. A retailer forced to cut prices to compete ... could do so with impunity.”
Hard on the heels of this FTC letter came Attorney General Brownell’s long-heralded and long-delayed study. Formed in 1953 to review the whole structure of anti-trust legislation, the Brownell committee was composed of 60 top lawyers and economists.
In strong words, the committee’s report attacked the federal laws which exempt Fair Trade agreements from antitrust action.
The report said, “We regard the Federal statutory exemption of Fair Trade pricing as an unwarranted compromise of the basic tenets of national anti-trust policy. The throttling of price competition in the process of distribution that attends Fair Trade pricing is, in our opinion, a deplorable yet inevitable concomitant of Federal exemptive laws.
“We therefore recommend Congressional repeal both of the Miller-Tydings amendment to the Sherman Act and the McGuire amendment to the Federal Trade Commission Act, thereby subjecting resale-price maintenance as other price-fixing practices, to those Federal anti-trust controls which safeguard the public by keeping the channels of distribution free.” (Italics mine. – T.N.V.)
The Administration is thus squarely behind repeal of Fair Trade. Whether immediate legislation will result is doubtful, but it makes little difference so far as the over-all problem is concerned. While some manufacturers will state that they favor continuation of Fair Trade, more and more retailers are moving in the direction of advocating repeal of Fair Trade.
In fact, Attorney General Brownell in a speech before the Annual Conference of the NRDGA (reported in Retailing Daily of April 4, 1955) tried to convince the department store owners (apparently, without too much resistance) that they would be aided in their fight against discount houses by repeal of Fair Trade.
He suggested that the discounter probably owes more to fair trade than anyone else since it gives him a fixed ceiling and makes it a simple matter to undersell those retailers bound by fair trade contracts....
“It may be that elimination of fair trade would hamper the operations of discounters to a greater extent than it would hurt those who have so earnestly sought the protection of fair trade!” ...
The Attorney General’s declaration constituted his first detailed discussion of fair trade “price-fixing” as the Justice Department sees it. Included in his reasoning were these fundamental points:
Although fair trade legislation was supposed to help small retailers compete with chain stores and other large outlets, “the anticipated benefits have been somewhat illusory.”
Fair trade handicaps those small retailers who cannot afford extensive advertising, or elaborate establishments or services and whose best hope of attracting customers is in charging lower prices ...
The argument of some manufacturers that fair trade is needed to protect the small merchant has “a somewhat false ring” when they admit they have engaged in manufacturing for sale under private brand an article identical, except for a different brand name, with the fair traded item.
One of his major conclusions was when “He said it ‘seems evident’ that the absence of competitive pricing under fair trade results in higher prices for the consumer and that consumers are deprived of the opportunity of ‘shopping around’ for the same product priced competitively and advertised freely by different retailers.”
It would thus seem fairly clear that despite the development of state monopoly capitalism and the Permanent War Economy, with all the modifications that have taken place in the structure of capitalism, some of the basic laws of capitalism still operate. The trends toward concentration of capital, and its increasing organic composition, that Marx observed and analyzed are still at work. Competition is still cannibalistic in its impact, especially on smaller aggregations of capital. The crisis in distribution and its continuation are both inevitable and incurable. They are a reflection of the fact that American capitalism, despite its tremendous wealth, is in reality a sick economy.
The fact that capitalist crisis does not appear in traditional form, as a sudden curtailing of credit at the peak of a boom, with resultant forced liquidations on an extensive scale, does not at all mean that capitalism has solved the problem of the business cycle, or that capitalist prosperity is permanent. On the contrary, as we have repeatedly observed, unless there is a constantly increasing ratio of war outlays to total output, the equilibrium becomes more and more precarious until it is finally upset.
The dead weight of mass unemployment will become more and more a powerful social and political lever, despite the fact that the increase in unemployment is uneven and gradual, and despite the fact that the labor movement has lost much of its militancy. In 1949, unemployment reached a postwar peak averaging 3.4 million for the year. The equilibrium of the economy was certainly endangered at that point. But, fortunately for American capitalism, the Korean war was launched by Stalin at just the right time. Unemployment which had averaged 3.1 million in 1950, declined to 1.9 million in 1951, 1.7 million in 1952, and 1.5 million in 1953, but in 1954 unemployment rose to an average of 3.2 million.
It is impossible to predict at what level (four, five or six million) unemployment will become such a dead weight on the entire economy that the far-reaching nature of the present crisis will be apparent to all. The fate of small business may be of only passing interest to monopoly capital, but its decline tends to aggravate the unemployment problem, and of course its demise is hastened by rising unemployment. If 1955 becomes the most prosperous (profitable) or the second-most prosperous (profitable) year in the history of American capitalism, with unemployment remaining at about the three million level, then what will happen to unemployment when there is a 5–10 per cent decline in production? And the crisis in distribution is a sure sign that in the not-too-distant future there will be a fall-off in production!
May 1955
T.N. Vance
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<h2>Frank Demby</h2>
<h1>A Capitalist Looks at the Economics of War</h1>
<h3>(November 1941)</h3>
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<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue2.htm#ni41_11" target="new">Vol. VII No. 10</a>, November 1941, pp. 283–5.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst"><strong>American Industry in the War</strong><br>
by Bernard M. Baruch<br>
<em>New York, Prentice-Hall, Inc., 1941. 498 pp.</em></p>
<p class="fst">ALONG LAST, Mr. Baruch, Wall Street speculator, big business man, financial advisor to the duPonts, formulator of the “M-Day” plans and one of the outstanding representatives of the American bourgeoisie, has set forth his views on war economics. It is not a book intended for mass consumption. The circulation of <strong>American Industry in the War</strong> will undoubtedly be limited to libraries, serious economists, a few Washington bureaucrats and perhaps a handful of Marxists. This is not to say that Mr. Baruch’s book is not deserving of wider circulation. It is. First of all, it is a useful reference book concerning some phases of America’s economic mobilization during World War I. Secondly, and above all, it contains Mr. Baruch’s program for the administration of the American war economy during World War II.</p>
<p>The book is invaluable as a class-conscious presentation of the point of view of the bourgeoisie. Just how representative of the opinion of the big bourgeoisie Mr. Baruch is, is difficult to say. But it is not without significance that the newspapers continue to report Baruch’s visits to Roosevelt, that the Canadian plan for preventing inflation, involving the freezing of all prices, including wages, is openly referred to in the American press as an experiment to determine the validity of Baruch’s ideas, and that Representative Gore’s plan, which also involves an overall ceiling on prices (wages included), is admittedly inspired by Baruch.</p>
<p>Baruch starts with the assumption that war, especially modern war, is a very serious business. He says in his foreword:</p>
<p class="quoteb">Total defense must plan to fight, to win and above all to survive war. This means some plan along lines similar to the experience tested by the United States War Industries Board of 1917 and 1918. It must mobilize men. money, materials, morale – all resources – to give to the war-making agencies and those allied with them, such as shipping and blockade, what they want when they want it, without unnecessary deprivation or exploitation of civilians.</p>
<p class="fst">Thus Baruch knows, and the experiences of the last war and of this one to date confirm him, that capitalist imperialist war in the epoch of the decline of capitalism necessarily involves totalitarian economic and political forms – that is, if the war is to be prosecuted successfully. Everything must be at the service of the state. The employment of all resources, material as well as human, must be planned. “Business as usual” must give way to “all-out” defense. To be sure, exploitation as usual will remain, but it must not be insensate and too grasping. Moderation, centralized direction, efficiency – that is the only way to preserve capitalism.</p>
<p>This thesis runs through the book from the very first page to the last. That it involves a lower standard of living for the masses, increased power for monopoly capital, and complete control of all aspects of life in the hands of an all-powerful administration in Washington is perhaps regrettable. But, and Mr. Baruch is 100 per cent correct, reasoning from the basic premise of preserving capitalism, this is inevitable. Mr. Baruch does not use the famous phrase adopted by Marxists from the German general, von Clausewitz: “War is a continuation of politics by other means.” However, he clearly understands the content of this expressive sentence. He is trying to convey its meaning to his fellow-capitalists, to persuade them, in other words, to continue their politics, their exploitation of the workers, by methods adapted to the war.<br>
</p>
<h4>“Taking Profit Out of War” – A Deception</h4>
<p class="fst">Baruch calls his plan, written in magazine form as long ago as 1931: “A plan to mobilize effectively the resources of the nation for war which shall eliminate war profiteering, prevent wartime inflation, and equalize wartime burdens.” To mobilize the country’s resources, Baruch would extend and improve upon the methods used in the last war. On the subject of eliminating war profiteering – that is, on <em>how</em> to accomplish it – he is delightfully vague. But we shouldn’t be too harsh. After all, it sounds nice. In fact, Mr. Baruch originally entitled his plan: <em>Taking the Profit Out of War</em>. It is enough that a representative of finance capital realizes the necessity for keeping profits down to a respectable level. On page 380, for example, he says: “The inflationary process affords opportunity to individuals and corporations to reap profits so large as to raise the suggestion (<em>sic!</em>) of complacency if not of actual hospitality toward the idea of war.”</p>
<p>We shouldn’t expect him to propose a practical plan (like a 100 per cent excess profits tax, or government ownership of all war industries) for achieving this admittedly desirable aim. Nor should we be surprised that Mr. Baruch didn’t find his conscience plaguing him when he advised the duPonts to take their millions of dollars of war profits and buy 10,000,000 shares of General Motors common stock. In other words, for purposes of preserving popular morale, the bourgeoisie should not be too greedy. Otherwise, the masses may begin to suspect the truth. “<em>These people actually favor war because they profit from it</em>,” the workers will be saying to themselves; and such thoughts are what the Japanese would characterize as “dangerous” thoughts. Says Baruch:</p>
<p class="quoteb">Our plans should eliminate war profiteering and they ought to provide that each man, thing and dollar shall bear its just proportion of the burden. They should be designed to avoid the prostrating economic and social aftermath of war and, finally, they should be laid with full recognition that modern war is a death grapple between peoples and economic systems rather than a conflict of armies alone, and to that end we should merit for industrial America something of what Field Marshal von Hindenburg in his retrospect of the World War had to say of its efforts in 1918: “Her brilliant, if pitiless, war industry had entered the service of patriotism and had not failed it. Under the compulsion of military necessity <em>a ruthless autocracy was at work</em> (my italics – <em>F.D.</em>) and rightly, even in this land at the portals of which the Statue of Liberty flashes its blinding light across the seas. <em>They understood war.”</em> (Page 377)</p>
<p class="fst">The purposes and methods of capitalist war are clearly understood by the bourgeoisie, German as well as American. Would that they were as clearly understood by the workers! That would truly succeed in abolishing war.<br>
</p>
<h4>The Nazis Adopt American Plan</h4>
<p class="fst">This profound respect and admiration that Baruch has for German bourgeois and military opinion is seen in another connection, which is more revealing of what the American war economy has in store for us this time than any other single sentence from anyone’s pen. In his foreword, after pointing out that France fell because she lacked real economic mobilization, and that England is having difficulties because she is only partially mobilized, the author says with considerable triumph: “German military experts have said, ‘Except for a few minor changes, <em>the German economic mobilization system was conscientiously built in imitation of the similar American system</em>.’” (My italics – <em>F.D.</em>) What happened, apparently, was that the lectures that Baruch and others gave to the American War College in the period around 1931 were later formulated as the “M-Day” plans and published for the edification of American bourgeois and military opinion. The Nazis, never loathe to borrow an idea which they could use to advantage, borrow the American mobilization plans <em>in toto</em>. Perhaps this explains the eager, and yet wishful, manner in which the American General Staff follows the progress of the German armies. One begins to suspect that is more a matter of the author’s pride than of advancing American military science. Be that as it may, <em>a system which is good for the Nazis cannot be very good for the preservation of the democratic way of life!</em></p>
<p>“War is economically the greatest and most scandalous of spendthrifts” (p. 74). “This sapping of economic strength will, in future wars, be the determining cause of defeat” (p. 380). “In modern war, administrative control <em>must</em> replace the law of supply and demand” (p. 382). Here, in three brief sentences, is expressed all the wisdom of the bourgeoisie and, at the same time, their complete bankruptcy in the face of social problems that have outgrown the confines of private ownership of property and production for profit. The capitalist class, in the interests of its own self-preservation, is compelled to waste the “blood, sweat and toil” of the masses. It dooms humanity to incalculable exhaustion. No one can predict how many years it will take to recover from the devastation wrought by World War II. One thing is certain, however: the law of supply and demand (free, competitive capitalism and its political superstructure, bourgeois democracy) is doomed. It is not merely a question of its temporary suspension during the war. The World War, which is now threatening to make the last war appear as a localized incident, will bring in its wake proletarian revolution on an international scale and the tremendous leap forward toward socialism, or totalitarian state monopoly capitalism (fascism). Mr. Baruch has a premonition of this, although, of course, he cannot bring himself to say it clearly and openly, when he says (on page 104): “<em>This legislation</em> (anti-trust legislation – <em>F.D.</em>), while valuable for immediate purposes, <em>represents little more than a moderately ambitious effort to reduce</em> by government interference <em>the processes of business</em> so as to make them conform <em>to the simpler principles sufficient for the conditions of a bygone day</em>.” (My italics – <em>F.D.</em>)<br>
</p>
<h4>Inflation and the War Economy</h4>
<p class="fst">As for preventing inflation, all that can be said for Mr. Baruch is that he at least recognizes it as an inevitable accompaniment of capitalist war. His plan to prevent it is thoroughly reactionary and, in the long run, will not succeed in preventing inflation. The Baruch plan, known as the overall price ceiling, would simply freeze all prices as of a certain day and use the government’s powers of compulsion to enforce this 100 per cent totalitarian idea. In his own words (page 473): “When industry has reached full capacity and price-fixing is admittedly necessary, this ceiling should be clamped down, and all prices, wages, rents and other forms of remuneration limited to the highest levels obtaining on a certain specific day.” This, of course, involves freezing existing inequalities, accepting the capitalist concept of full capacity as the most effective economic organization possible, and instituting such far-reaching totalitarian controls as to make present-day Germany look like a democracy. But it will not prevent inflation. It will create a huge governmental bureaucracy and possibly slow down the rapid drive toward inflation, but as long as private appropriation of the fruits of other people’s labor remains (that is, while the capitalist system remains), it can only result in a <em>concealed inflation</em>, as Germany has discovered. Rapidly rising prices will give way to rapidly deteriorating quality in merchandise, to vast (and, unofficially, government-organized) “black bourses” or bootleg markets, where capitalists and government bureaucrats, who have the fat pocketbooks, can still live off the fat of the land. It will mean widespread corruption, such as to make the carpet bag era following the Civil War a model of virtue and restraint.</p>
<p>As for equalizing wartime burdens, Mr. Baruch expresses an admirable sentiment when, in the only place where he expatiates on this point, he says (page 469): “The need for preserving civilian morale forbids that necessities should be given only to those with the longest pocketbook. For this reason, food, clothing and all other vital elements that go to make up the cost of living, if they become scarce, must be rationed equitably among all consumers. The most satisfactory method is a system of ration cards together with the licensing of wholesale and retail distributors.” True, but you can’t make capitalism equitable, by decree or otherwise. However, Mr. Baruch is not particularly serious about this, or, if he is, he has his own, or capitalist, concept of social justice. For the major part of his book is devoted to a report of the War Industries Board, submitted in 1921, where Baruch cites with approval virtually all the experiences, dealing with virtually every commodity, of the Board, of which he was chairman. And, as every schoolchild knows, the conduct of the American war economy in World War I by the War Industries Board was hardly distinguished by its fairness and equal distribution of wartime burdens.<br>
</p>
<h4>The Warning to Labor</h4>
<p class="fst">It is when he comes to labor that Baruch, the industrialist, loses some of his objective pose. The mailed fist inches out of the white kid glove. Strikes, of course, are taboo, but the capitalists “shouldn’t take advantage of labor.” (That is, they should stop being capitalists.) Conscription of labor is not to be countenanced (Messrs. Bevin and Hillman, please take note!). The argument is rather interesting. “As long as our present industrial organization maintains, industry is in the hands of millions of private employers. It is operated for profit to them. The employee therefore serves in private industry operating for gain. Enforced and involuntary service for a private master is and has been clearly and repeatedly denned by our Supreme Court as slavery inhibited by the Thirteenth Amendment to the Constitution of the United States” (page 471). But, if the capitalist state drafts industry, as it has the power to do, and as is proposed in the “M-Day” plans, which Mr. Baruch inspired, won’t the state then have the “right” to conscript labor?</p>
<p>Mr. Baruch can never forget that he is a class-conscious bourgeois. Time and again it creeps out and destroys his “impartial, patriotic” approach. No better illustration is needed than the following: “The war had scarcely begun when the IWW, <em>stimulated no doubt by the enemy</em>, appeared as a menacing factor, particularly in the mountain regions and on the Pacific Coast” (page 88 – my italics – <em>F.D.</em>). How long will it be before government officials openly substitute the letters CIO for IWW?</p>
<p><strong>American Industry in the War</strong> will be studied carefully by those who wish some factual information concerning the last war (the book, incidentally, has some valuable appendices) and by those who want to obtain first-hand the mature opinion of the most advanced sections of the American capitalist class. It will be ignored by those who wish to preserve their illusions concerning the “democratic” organization of a capitalist war economy.</p>
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Frank Demby
A Capitalist Looks at the Economics of War
(November 1941)
From The New International, Vol. VII No. 10, November 1941, pp. 283–5.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
American Industry in the War
by Bernard M. Baruch
New York, Prentice-Hall, Inc., 1941. 498 pp.
ALONG LAST, Mr. Baruch, Wall Street speculator, big business man, financial advisor to the duPonts, formulator of the “M-Day” plans and one of the outstanding representatives of the American bourgeoisie, has set forth his views on war economics. It is not a book intended for mass consumption. The circulation of American Industry in the War will undoubtedly be limited to libraries, serious economists, a few Washington bureaucrats and perhaps a handful of Marxists. This is not to say that Mr. Baruch’s book is not deserving of wider circulation. It is. First of all, it is a useful reference book concerning some phases of America’s economic mobilization during World War I. Secondly, and above all, it contains Mr. Baruch’s program for the administration of the American war economy during World War II.
The book is invaluable as a class-conscious presentation of the point of view of the bourgeoisie. Just how representative of the opinion of the big bourgeoisie Mr. Baruch is, is difficult to say. But it is not without significance that the newspapers continue to report Baruch’s visits to Roosevelt, that the Canadian plan for preventing inflation, involving the freezing of all prices, including wages, is openly referred to in the American press as an experiment to determine the validity of Baruch’s ideas, and that Representative Gore’s plan, which also involves an overall ceiling on prices (wages included), is admittedly inspired by Baruch.
Baruch starts with the assumption that war, especially modern war, is a very serious business. He says in his foreword:
Total defense must plan to fight, to win and above all to survive war. This means some plan along lines similar to the experience tested by the United States War Industries Board of 1917 and 1918. It must mobilize men. money, materials, morale – all resources – to give to the war-making agencies and those allied with them, such as shipping and blockade, what they want when they want it, without unnecessary deprivation or exploitation of civilians.
Thus Baruch knows, and the experiences of the last war and of this one to date confirm him, that capitalist imperialist war in the epoch of the decline of capitalism necessarily involves totalitarian economic and political forms – that is, if the war is to be prosecuted successfully. Everything must be at the service of the state. The employment of all resources, material as well as human, must be planned. “Business as usual” must give way to “all-out” defense. To be sure, exploitation as usual will remain, but it must not be insensate and too grasping. Moderation, centralized direction, efficiency – that is the only way to preserve capitalism.
This thesis runs through the book from the very first page to the last. That it involves a lower standard of living for the masses, increased power for monopoly capital, and complete control of all aspects of life in the hands of an all-powerful administration in Washington is perhaps regrettable. But, and Mr. Baruch is 100 per cent correct, reasoning from the basic premise of preserving capitalism, this is inevitable. Mr. Baruch does not use the famous phrase adopted by Marxists from the German general, von Clausewitz: “War is a continuation of politics by other means.” However, he clearly understands the content of this expressive sentence. He is trying to convey its meaning to his fellow-capitalists, to persuade them, in other words, to continue their politics, their exploitation of the workers, by methods adapted to the war.
“Taking Profit Out of War” – A Deception
Baruch calls his plan, written in magazine form as long ago as 1931: “A plan to mobilize effectively the resources of the nation for war which shall eliminate war profiteering, prevent wartime inflation, and equalize wartime burdens.” To mobilize the country’s resources, Baruch would extend and improve upon the methods used in the last war. On the subject of eliminating war profiteering – that is, on how to accomplish it – he is delightfully vague. But we shouldn’t be too harsh. After all, it sounds nice. In fact, Mr. Baruch originally entitled his plan: Taking the Profit Out of War. It is enough that a representative of finance capital realizes the necessity for keeping profits down to a respectable level. On page 380, for example, he says: “The inflationary process affords opportunity to individuals and corporations to reap profits so large as to raise the suggestion (sic!) of complacency if not of actual hospitality toward the idea of war.”
We shouldn’t expect him to propose a practical plan (like a 100 per cent excess profits tax, or government ownership of all war industries) for achieving this admittedly desirable aim. Nor should we be surprised that Mr. Baruch didn’t find his conscience plaguing him when he advised the duPonts to take their millions of dollars of war profits and buy 10,000,000 shares of General Motors common stock. In other words, for purposes of preserving popular morale, the bourgeoisie should not be too greedy. Otherwise, the masses may begin to suspect the truth. “These people actually favor war because they profit from it,” the workers will be saying to themselves; and such thoughts are what the Japanese would characterize as “dangerous” thoughts. Says Baruch:
Our plans should eliminate war profiteering and they ought to provide that each man, thing and dollar shall bear its just proportion of the burden. They should be designed to avoid the prostrating economic and social aftermath of war and, finally, they should be laid with full recognition that modern war is a death grapple between peoples and economic systems rather than a conflict of armies alone, and to that end we should merit for industrial America something of what Field Marshal von Hindenburg in his retrospect of the World War had to say of its efforts in 1918: “Her brilliant, if pitiless, war industry had entered the service of patriotism and had not failed it. Under the compulsion of military necessity a ruthless autocracy was at work (my italics – F.D.) and rightly, even in this land at the portals of which the Statue of Liberty flashes its blinding light across the seas. They understood war.” (Page 377)
The purposes and methods of capitalist war are clearly understood by the bourgeoisie, German as well as American. Would that they were as clearly understood by the workers! That would truly succeed in abolishing war.
The Nazis Adopt American Plan
This profound respect and admiration that Baruch has for German bourgeois and military opinion is seen in another connection, which is more revealing of what the American war economy has in store for us this time than any other single sentence from anyone’s pen. In his foreword, after pointing out that France fell because she lacked real economic mobilization, and that England is having difficulties because she is only partially mobilized, the author says with considerable triumph: “German military experts have said, ‘Except for a few minor changes, the German economic mobilization system was conscientiously built in imitation of the similar American system.’” (My italics – F.D.) What happened, apparently, was that the lectures that Baruch and others gave to the American War College in the period around 1931 were later formulated as the “M-Day” plans and published for the edification of American bourgeois and military opinion. The Nazis, never loathe to borrow an idea which they could use to advantage, borrow the American mobilization plans in toto. Perhaps this explains the eager, and yet wishful, manner in which the American General Staff follows the progress of the German armies. One begins to suspect that is more a matter of the author’s pride than of advancing American military science. Be that as it may, a system which is good for the Nazis cannot be very good for the preservation of the democratic way of life!
“War is economically the greatest and most scandalous of spendthrifts” (p. 74). “This sapping of economic strength will, in future wars, be the determining cause of defeat” (p. 380). “In modern war, administrative control must replace the law of supply and demand” (p. 382). Here, in three brief sentences, is expressed all the wisdom of the bourgeoisie and, at the same time, their complete bankruptcy in the face of social problems that have outgrown the confines of private ownership of property and production for profit. The capitalist class, in the interests of its own self-preservation, is compelled to waste the “blood, sweat and toil” of the masses. It dooms humanity to incalculable exhaustion. No one can predict how many years it will take to recover from the devastation wrought by World War II. One thing is certain, however: the law of supply and demand (free, competitive capitalism and its political superstructure, bourgeois democracy) is doomed. It is not merely a question of its temporary suspension during the war. The World War, which is now threatening to make the last war appear as a localized incident, will bring in its wake proletarian revolution on an international scale and the tremendous leap forward toward socialism, or totalitarian state monopoly capitalism (fascism). Mr. Baruch has a premonition of this, although, of course, he cannot bring himself to say it clearly and openly, when he says (on page 104): “This legislation (anti-trust legislation – F.D.), while valuable for immediate purposes, represents little more than a moderately ambitious effort to reduce by government interference the processes of business so as to make them conform to the simpler principles sufficient for the conditions of a bygone day.” (My italics – F.D.)
Inflation and the War Economy
As for preventing inflation, all that can be said for Mr. Baruch is that he at least recognizes it as an inevitable accompaniment of capitalist war. His plan to prevent it is thoroughly reactionary and, in the long run, will not succeed in preventing inflation. The Baruch plan, known as the overall price ceiling, would simply freeze all prices as of a certain day and use the government’s powers of compulsion to enforce this 100 per cent totalitarian idea. In his own words (page 473): “When industry has reached full capacity and price-fixing is admittedly necessary, this ceiling should be clamped down, and all prices, wages, rents and other forms of remuneration limited to the highest levels obtaining on a certain specific day.” This, of course, involves freezing existing inequalities, accepting the capitalist concept of full capacity as the most effective economic organization possible, and instituting such far-reaching totalitarian controls as to make present-day Germany look like a democracy. But it will not prevent inflation. It will create a huge governmental bureaucracy and possibly slow down the rapid drive toward inflation, but as long as private appropriation of the fruits of other people’s labor remains (that is, while the capitalist system remains), it can only result in a concealed inflation, as Germany has discovered. Rapidly rising prices will give way to rapidly deteriorating quality in merchandise, to vast (and, unofficially, government-organized) “black bourses” or bootleg markets, where capitalists and government bureaucrats, who have the fat pocketbooks, can still live off the fat of the land. It will mean widespread corruption, such as to make the carpet bag era following the Civil War a model of virtue and restraint.
As for equalizing wartime burdens, Mr. Baruch expresses an admirable sentiment when, in the only place where he expatiates on this point, he says (page 469): “The need for preserving civilian morale forbids that necessities should be given only to those with the longest pocketbook. For this reason, food, clothing and all other vital elements that go to make up the cost of living, if they become scarce, must be rationed equitably among all consumers. The most satisfactory method is a system of ration cards together with the licensing of wholesale and retail distributors.” True, but you can’t make capitalism equitable, by decree or otherwise. However, Mr. Baruch is not particularly serious about this, or, if he is, he has his own, or capitalist, concept of social justice. For the major part of his book is devoted to a report of the War Industries Board, submitted in 1921, where Baruch cites with approval virtually all the experiences, dealing with virtually every commodity, of the Board, of which he was chairman. And, as every schoolchild knows, the conduct of the American war economy in World War I by the War Industries Board was hardly distinguished by its fairness and equal distribution of wartime burdens.
The Warning to Labor
It is when he comes to labor that Baruch, the industrialist, loses some of his objective pose. The mailed fist inches out of the white kid glove. Strikes, of course, are taboo, but the capitalists “shouldn’t take advantage of labor.” (That is, they should stop being capitalists.) Conscription of labor is not to be countenanced (Messrs. Bevin and Hillman, please take note!). The argument is rather interesting. “As long as our present industrial organization maintains, industry is in the hands of millions of private employers. It is operated for profit to them. The employee therefore serves in private industry operating for gain. Enforced and involuntary service for a private master is and has been clearly and repeatedly denned by our Supreme Court as slavery inhibited by the Thirteenth Amendment to the Constitution of the United States” (page 471). But, if the capitalist state drafts industry, as it has the power to do, and as is proposed in the “M-Day” plans, which Mr. Baruch inspired, won’t the state then have the “right” to conscript labor?
Mr. Baruch can never forget that he is a class-conscious bourgeois. Time and again it creeps out and destroys his “impartial, patriotic” approach. No better illustration is needed than the following: “The war had scarcely begun when the IWW, stimulated no doubt by the enemy, appeared as a menacing factor, particularly in the mountain regions and on the Pacific Coast” (page 88 – my italics – F.D.). How long will it be before government officials openly substitute the letters CIO for IWW?
American Industry in the War will be studied carefully by those who wish some factual information concerning the last war (the book, incidentally, has some valuable appendices) and by those who want to obtain first-hand the mature opinion of the most advanced sections of the American capitalist class. It will be ignored by those who wish to preserve their illusions concerning the “democratic” organization of a capitalist war economy.
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<h2 class="western">Frank Demby</h2>
<h1>Workers in Russia</h1>
<h3>(July 1941)</h3>
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<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue2.htm#ni41_07" target="new">Vol. VII No. 6 (Whole No. 55)</a>, July 1941, pp. 157–8.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst"><strong>Workers Before and After Lenin</strong><br>
by Manya Gordon<br>
<em>New York. E.P. Button & Co., 1941, 524 pages</em></p>
<p class="fst">Manya Gordon has written an extremely interesting, valuable and well documented book about the conditions of the Russian workers. Unless one has read equivalent material (which would be much more difficult to gather), <strong>Workers Before and After Lenin</strong> is a MUST book for anyone who wishes to discuss the Russian question or who merely wishes to be conversant with what is taking place in Russia today.</p>
<p>“Without political freedom all forms of workers’ representation will continue to be a fraud. The proletariat will remain as heretofore in prison.” – Lenin, 1905, quoted by the author on the frontispiece. It is impossible to overemphasize this statement. Contrast it with the attitude of Stalin, as expressed by one of his journalists in <strong>Za Industrializatziu</strong>, April 9, 1931: “We are not in the habit of worrying about people. Rather we feel that of that bounty – people – we have more than enough.” This callous, bureaucratic indifference to the fate of the people has assumed monstrous proportions during the past decade, making the Stalinist regime one of the most hideous and oppressive in all the tortured history of mankind.<br>
</p>
<h4 class="western">The Author’s Bias</h4>
<p class="fst">The book, unfortunately, is much more than a factual study from official Soviet sources on the standard of living of the Russian workers. Miss Gordon, wife of Simeon Strunsky, ex-member of the Socialist Revolutionary Party, ex-member of the Socialist Party, current supporter of La Guardia in the American Labor Party, has a political axe to grind. Her thesis is a very simple one. The Russian workers never should have made the revolution. Look how bad their conditions are today. Had capitalist democracy been permitted to survive in Russia, the gigantic strides made by the Russian proletariat after the 1905 Revolution would have resulted in just as much production as exists in Russia today and, in addition, there would be freedom for the masses instead of slavery. Besides, the Russian workers really didn’t want to make the October Revolution. Lenin, “the crafty demagogue,” “the clever opportunist,” “the master politician,” took advantage of the Russian workers and slipped the October Revolution over on them against their will and, certainly, against their best interests.</p>
<p>This thesis runs through the book like a red thread. It appears in one form or other in virtually every chapter. Even if the author were correct in her appraisal of the October Revolution, which we don’t admit for one moment, it would still represent a serious blemish on an otherwise excellent work. Repetition becomes tedious, even when it is a sound historical statement that is constantly reiterated. In this case, however, it is a compound of the Menshevik thesis that Russia was too backward for a socialist revolution, of the current bourgeois slander that Stalinism represents an inevitable and logical outgrowth of Leninism, and of the author’s plain ineptitude and ignorance in interpreting history.</p>
<p>One example will suffice. On page 355, in discussing Lenin’s <strong>Imperialism</strong> as a theoretical justification for the Russian revolution, the author states:</p>
<blockquote>“He (Lenin) insisted that monopoly is the final phase of capitalism which during a war is inevitably converted ‘into an era of proletarian revolution.’ Lenin had no difficulty in finding these conditions in Russia. Because of its large-scale production, its cartels and syndicates and their affiliation with the banks, Russia like western Europe was ripe for the socialist revolution. Later, in 1920, when Lenin was faced with closed banks and huge empty plants he forgot completely his previous statements about Russia’s readiness for the socialist scheme of things. But it was too late, or rather, Lenin died too soon, and as a result the Russian people had to pay for his folly.”<br>
</blockquote>
<h4 class="western">The Nature of the Russian Revolution</h4>
<p class="fst">It would be difficult to crowd more errors in interpreting history into one short paragraph than Manya Gordon does in the above. The Bolshevik leadership did not conceive it possible to build socialism in Russia alone. Russia, to them, was the weakest link in the capitalist chain. Being the first link to break, Russia would become the starting point of the world revolution, which was an indispensable prerequisite for the building of socialism. And, certainly, capitalist society as a whole was and is rotten-ripe for the building of socialism. The theory of socialism in a single country was a Stalinist perversion of Marxism. The Bolsheviks were hardly to blame if Noske and Scheideman, Manya Gordon’s political counterparts, slaughtered the main base of the first world revolution in Germany. The NEP was a necessary retreat, but an <em>organized retreat</em>. That Stalinism came to power during this period does not prove that the revolution should not have been made, but that the Russian workers were too weak after three years of imperialist war and four years of civil war (for which the bourgeoisie were responsible, not Lenin and the Bolsheviks, Miss Gordon) to withstand the inroads of Stalinism.</p>
<p>Moreover, it seems to me that the author, anxious to prove her case, overstates it substantially when she speaks about the decade of progress under Czarism prior to the revolution. Time and again, in referring to the advanced labor legislation adopted under the Duma (and won by the magnificent fighting power of the Russian workers), she is forced to admit that it remained largely or entirely on paper. For the sake of argument, however, I can grant all that Miss Gordon says about the progress of industry and the standard of living under Czarism. This does not prove that had a bourgeois democratic regime maintained itself in Russia after the overthrow of Czarism that there would have been just as much industrialization (with a comparable rise in the standard of living). Why should a capitalist Russia have made any more progress during the 1920s and the 1930s than the rest of the capitalist world? And, if the argument is made that Russia would have been a young capitalist country, one can point to China, or India, or Canada, or Australia or other young outposts of capitalism and demonstrate that the progress of their industrialization during the last two decades, particularly the last one, has been absolutely feeble in comparison with that of Russia.<br>
</p>
<h4 class="western">The Standard of Living Declines Under Stalin</h4>
<p class="fst">The real value of Miss Gordon’s book is certainly not its political interpretation of Russian history, nor even the light it throws on the economic conditions in Russia under Czarism and prior to the beginning of the first Five Year Plan. Rather, it lies in the painstaking and detailed picture of the Russian standard of living since the introduction of the first Five Year Plan. And this, in spite of an inadequate economic analysis of the development of Russian industrial and agricultural production. No wonder the Stalinists have condemned the book. It constitutes a damning and irrefutable indictment of the Stalinist regime. At one stroke, out of official Stalinist sources, it destroys all the myths carefully nurtured by the kept Stalinist press and then: bourgeois dupes such as the Webbs and the Dean of Canterbury.</p>
<p>While production has increased considerably, the standard of living in this “paradise for workers,” conducted by the “genial and greatest of the great,” Stalin, has declined by about one-half since the introduction of the first Five Year Plan in October 1928. Facts are stubborn things, as Lenin was very fond of saying, and it is a <em>fact</em> that the standard of living of the Russian workers and masses has declined tremendously since Stalin came to power. No amount of fake statistics and idiotic rationalizations can get around this fact.</p>
<p>It requires a separate economic analysis to deal with the facts concerning the declining standard of living and the reasons for this phenomenon. Remember that Russia under Stalin represents the first country in the history of the world where a tremendous increase in industrialization has been accompanied by an equally tremendous decline in the standard of living.</p>
<p>Those who are interested in learning something about the real situation of the Russian workers today, about wages, nominal and real, housing, clothing, medical care, education, child and woman labor, food budgets, social security, the depreciation of the rouble, taxes, hours of work and conditions in the factories will read <strong>Workers Before and After Lenin</strong>. Those who wish to perpetuate their own illusions and demonstrate their ignorance in discussing the <em>reality</em> that is Russia today will ignore Miss Gordon’s book or shrug their shoulders and dismiss it as the work of an enemy of the Russian revolution. Genuine Marxists, however, will understand the value of Miss Gordon’s book for it has made available in English a valuable compendium of facts concerning the status of the Russian worker today.</p>
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Frank Demby
Workers in Russia
(July 1941)
From The New International, Vol. VII No. 6 (Whole No. 55), July 1941, pp. 157–8.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Workers Before and After Lenin
by Manya Gordon
New York. E.P. Button & Co., 1941, 524 pages
Manya Gordon has written an extremely interesting, valuable and well documented book about the conditions of the Russian workers. Unless one has read equivalent material (which would be much more difficult to gather), Workers Before and After Lenin is a MUST book for anyone who wishes to discuss the Russian question or who merely wishes to be conversant with what is taking place in Russia today.
“Without political freedom all forms of workers’ representation will continue to be a fraud. The proletariat will remain as heretofore in prison.” – Lenin, 1905, quoted by the author on the frontispiece. It is impossible to overemphasize this statement. Contrast it with the attitude of Stalin, as expressed by one of his journalists in Za Industrializatziu, April 9, 1931: “We are not in the habit of worrying about people. Rather we feel that of that bounty – people – we have more than enough.” This callous, bureaucratic indifference to the fate of the people has assumed monstrous proportions during the past decade, making the Stalinist regime one of the most hideous and oppressive in all the tortured history of mankind.
The Author’s Bias
The book, unfortunately, is much more than a factual study from official Soviet sources on the standard of living of the Russian workers. Miss Gordon, wife of Simeon Strunsky, ex-member of the Socialist Revolutionary Party, ex-member of the Socialist Party, current supporter of La Guardia in the American Labor Party, has a political axe to grind. Her thesis is a very simple one. The Russian workers never should have made the revolution. Look how bad their conditions are today. Had capitalist democracy been permitted to survive in Russia, the gigantic strides made by the Russian proletariat after the 1905 Revolution would have resulted in just as much production as exists in Russia today and, in addition, there would be freedom for the masses instead of slavery. Besides, the Russian workers really didn’t want to make the October Revolution. Lenin, “the crafty demagogue,” “the clever opportunist,” “the master politician,” took advantage of the Russian workers and slipped the October Revolution over on them against their will and, certainly, against their best interests.
This thesis runs through the book like a red thread. It appears in one form or other in virtually every chapter. Even if the author were correct in her appraisal of the October Revolution, which we don’t admit for one moment, it would still represent a serious blemish on an otherwise excellent work. Repetition becomes tedious, even when it is a sound historical statement that is constantly reiterated. In this case, however, it is a compound of the Menshevik thesis that Russia was too backward for a socialist revolution, of the current bourgeois slander that Stalinism represents an inevitable and logical outgrowth of Leninism, and of the author’s plain ineptitude and ignorance in interpreting history.
One example will suffice. On page 355, in discussing Lenin’s Imperialism as a theoretical justification for the Russian revolution, the author states:
“He (Lenin) insisted that monopoly is the final phase of capitalism which during a war is inevitably converted ‘into an era of proletarian revolution.’ Lenin had no difficulty in finding these conditions in Russia. Because of its large-scale production, its cartels and syndicates and their affiliation with the banks, Russia like western Europe was ripe for the socialist revolution. Later, in 1920, when Lenin was faced with closed banks and huge empty plants he forgot completely his previous statements about Russia’s readiness for the socialist scheme of things. But it was too late, or rather, Lenin died too soon, and as a result the Russian people had to pay for his folly.”
The Nature of the Russian Revolution
It would be difficult to crowd more errors in interpreting history into one short paragraph than Manya Gordon does in the above. The Bolshevik leadership did not conceive it possible to build socialism in Russia alone. Russia, to them, was the weakest link in the capitalist chain. Being the first link to break, Russia would become the starting point of the world revolution, which was an indispensable prerequisite for the building of socialism. And, certainly, capitalist society as a whole was and is rotten-ripe for the building of socialism. The theory of socialism in a single country was a Stalinist perversion of Marxism. The Bolsheviks were hardly to blame if Noske and Scheideman, Manya Gordon’s political counterparts, slaughtered the main base of the first world revolution in Germany. The NEP was a necessary retreat, but an organized retreat. That Stalinism came to power during this period does not prove that the revolution should not have been made, but that the Russian workers were too weak after three years of imperialist war and four years of civil war (for which the bourgeoisie were responsible, not Lenin and the Bolsheviks, Miss Gordon) to withstand the inroads of Stalinism.
Moreover, it seems to me that the author, anxious to prove her case, overstates it substantially when she speaks about the decade of progress under Czarism prior to the revolution. Time and again, in referring to the advanced labor legislation adopted under the Duma (and won by the magnificent fighting power of the Russian workers), she is forced to admit that it remained largely or entirely on paper. For the sake of argument, however, I can grant all that Miss Gordon says about the progress of industry and the standard of living under Czarism. This does not prove that had a bourgeois democratic regime maintained itself in Russia after the overthrow of Czarism that there would have been just as much industrialization (with a comparable rise in the standard of living). Why should a capitalist Russia have made any more progress during the 1920s and the 1930s than the rest of the capitalist world? And, if the argument is made that Russia would have been a young capitalist country, one can point to China, or India, or Canada, or Australia or other young outposts of capitalism and demonstrate that the progress of their industrialization during the last two decades, particularly the last one, has been absolutely feeble in comparison with that of Russia.
The Standard of Living Declines Under Stalin
The real value of Miss Gordon’s book is certainly not its political interpretation of Russian history, nor even the light it throws on the economic conditions in Russia under Czarism and prior to the beginning of the first Five Year Plan. Rather, it lies in the painstaking and detailed picture of the Russian standard of living since the introduction of the first Five Year Plan. And this, in spite of an inadequate economic analysis of the development of Russian industrial and agricultural production. No wonder the Stalinists have condemned the book. It constitutes a damning and irrefutable indictment of the Stalinist regime. At one stroke, out of official Stalinist sources, it destroys all the myths carefully nurtured by the kept Stalinist press and then: bourgeois dupes such as the Webbs and the Dean of Canterbury.
While production has increased considerably, the standard of living in this “paradise for workers,” conducted by the “genial and greatest of the great,” Stalin, has declined by about one-half since the introduction of the first Five Year Plan in October 1928. Facts are stubborn things, as Lenin was very fond of saying, and it is a fact that the standard of living of the Russian workers and masses has declined tremendously since Stalin came to power. No amount of fake statistics and idiotic rationalizations can get around this fact.
It requires a separate economic analysis to deal with the facts concerning the declining standard of living and the reasons for this phenomenon. Remember that Russia under Stalin represents the first country in the history of the world where a tremendous increase in industrialization has been accompanied by an equally tremendous decline in the standard of living.
Those who are interested in learning something about the real situation of the Russian workers today, about wages, nominal and real, housing, clothing, medical care, education, child and woman labor, food budgets, social security, the depreciation of the rouble, taxes, hours of work and conditions in the factories will read Workers Before and After Lenin. Those who wish to perpetuate their own illusions and demonstrate their ignorance in discussing the reality that is Russia today will ignore Miss Gordon’s book or shrug their shoulders and dismiss it as the work of an enemy of the Russian revolution. Genuine Marxists, however, will understand the value of Miss Gordon’s book for it has made available in English a valuable compendium of facts concerning the status of the Russian worker today.
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<hr width="100%" noshade="noshade" size="1">
<h2>Frank Demby</h2>
<h1>Economic Notes</h1>
<h3>(29 September 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_39" target="new">Vol. 5 No. 39</a>, 29 September 1941, p. 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst"><strong>Washington Merry-Go-Round</strong> of September 19 declares that President Roosevelt was positively shocked when Representative Carl Vinson, chairman of the House Naval Affairs Committee, furnished a confidential report on shipyard profits. “<em>One company making ordnance instruments for the Navy netted a neat 208 per cent! Some plane manufacturers are making as high as 150 per cent. Big shipbuilders are averaging 72 per cent on government contracts.”</em> Some people do surprise easily. But what else could be expected when the Vinson-Trammell Act, limiting profits on naval orders to 8 per cent, was repealed at the start of the war program? Rumor hath it now that Vinson will propose to limit naval profits to 7 per cent. We WILL be surprised if such a measure goes through!</p>
<h4>*</h4>
<p class="fst">“Combined net profits of 112 producers of consumers goods in the first half of 1941 amounted to $165,734,689 after all tax provisions and other charges, compared with $141,260,170 in the same period last year, <em>reflecting better gains after taxes than mast of the heavy industry groups thus far reviewed for the period</em>.” (Kenneth L. Austin in the <strong>New York Times</strong>, September 21) And Mr. Austin has already reviewed the situation of some of the biggest war profiteering industries, such as chemicals. The profits of the big bosses are getting so big in all industries that they can’t even conceal them any more!</p>
<h4>*</h4>
<p class="fst">The above items attain real significance only when compared with the 1941 revenue bill, which was signed by the President on September 20. I have previously pointed out the gross inequities in this “Soak the Poor” bill. The conference between the House and Senate over their respective versions made virtually no changes of any importance from the Senate bill, as had been universally predicted. The income tax and excess profits tax provisions were unchanged. The burden of additional taxes is thrown almost exclusively on those who can least afford to pay. There were merely a few minor changes on some of the “hidden” or excise taxes. The tax on telephone calls, for example, is fixed at 6 per cent on local telephone bills, 10 per cent on long-distance calls costing more than 24 cents, and 10 per cent on telegraph, radio and cable messages. This “fair and equal” treatment of services used by the lower middle class and the workers, such as local telephones, with those used by the very wealthy, such as radio and cable messages, is typical of the perverted sense of justice that permeates the entire bill. Unless the trade unions and workers launch a real campaign for a genuine, 100 PER CENT EXCESS PROFITS TAX, WITHOUT ANY LOOPHOLES, they might as well resign themselves to footing the entire cost of the war.</p>
<h4>*</h4>
<p class="fst">The real boss of World War I, Wall Street’s white-haired boy, Barney Baruch, testified last week in connection with the pending price control bill. This outstanding representative of the ruling class in this country painted a very dark picture of what happens under inflation and what the aftermath of war may lead to. He was delightfully vague, however, on how to prevent these dire things from happening. The profit must be taken out of war. Yes, we agree, but how? Just establish price ceilings and everything will be hunky-dory. Freezing wages will not affect labor’s right to strike or the right of every worker to bargain collectively. No, it would just render the major weapons of labor absolutely useless.</p>
<p>Fairy tales aside, what Mr. Baruch was trying to tell the political representatives of the bosses is that if you want to lick Hitler you’ve got to use Hitler’s methods – that is, under capitalism. Said the duPonts’ family adviser: “If we are to keep the war from reaching these shores or win any war into which we are thrust, it will not be done by ‘business as usual’ but by the full mobilization of our economic resources as in 1918 and it must not be too little or loo late.” That he really didn’t mean the modest mobilization of 1918 but Hitler’s type of mobilization, which was swiped from the American Army’s M-Day plans, can be seen from the very next sentence: “Full mobilization means transforming American industry from a highly competitive economy to a practically single unitary system under which all producers will cooperate, sharing trade secrets, pooling patents, resources and facilities.”</p>
<p>Monopoly capitalism must be placed firmly in the saddle. This is the program recommended by Mr. Baruch. Anything or anybody that stands in its way must be pushed aside, crushed. This is the program of the National Association of Manufacturers and the big capitalists. It gives the lie to Baruch’s conclusion: The <em>status quo</em> of all should remain until the war is ended.” No, when things are changing very rapidly, as at present, no power on earth can keep the face of the world as it has been. Either the workers make up their minds to take what is their just due or the bosses will impose an American form of fascism on them.</p>
<h4>*</h4>
<p class="fst">A dispatch from Berlin, printed in the financial section of the <strong>New York Times</strong>, September 21, says: “Announcement that the Reich has sold its controlling interest in the Hamburg-American Line and in the North German Lloyd to a group of business men in Hamburg and Bremen took the financial market here by surprise. <em>The step itself may be. in line with the accepted policy of the Nazi government, which on various occasions, has stressed its aversion to government ownership and to the operation of business concerns.</em>” (Emphasis mine – <em>F.D.</em>) And some people still think that there is a “new” social order in Germany! It is still capitalism, to any but the blind, but it represents a further and logical development of capitalism – namely, state monopoly capitalism.</p>
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Frank Demby
Economic Notes
(29 September 1941)
From Labor Action, Vol. 5 No. 39, 29 September 1941, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Washington Merry-Go-Round of September 19 declares that President Roosevelt was positively shocked when Representative Carl Vinson, chairman of the House Naval Affairs Committee, furnished a confidential report on shipyard profits. “One company making ordnance instruments for the Navy netted a neat 208 per cent! Some plane manufacturers are making as high as 150 per cent. Big shipbuilders are averaging 72 per cent on government contracts.” Some people do surprise easily. But what else could be expected when the Vinson-Trammell Act, limiting profits on naval orders to 8 per cent, was repealed at the start of the war program? Rumor hath it now that Vinson will propose to limit naval profits to 7 per cent. We WILL be surprised if such a measure goes through!
*
“Combined net profits of 112 producers of consumers goods in the first half of 1941 amounted to $165,734,689 after all tax provisions and other charges, compared with $141,260,170 in the same period last year, reflecting better gains after taxes than mast of the heavy industry groups thus far reviewed for the period.” (Kenneth L. Austin in the New York Times, September 21) And Mr. Austin has already reviewed the situation of some of the biggest war profiteering industries, such as chemicals. The profits of the big bosses are getting so big in all industries that they can’t even conceal them any more!
*
The above items attain real significance only when compared with the 1941 revenue bill, which was signed by the President on September 20. I have previously pointed out the gross inequities in this “Soak the Poor” bill. The conference between the House and Senate over their respective versions made virtually no changes of any importance from the Senate bill, as had been universally predicted. The income tax and excess profits tax provisions were unchanged. The burden of additional taxes is thrown almost exclusively on those who can least afford to pay. There were merely a few minor changes on some of the “hidden” or excise taxes. The tax on telephone calls, for example, is fixed at 6 per cent on local telephone bills, 10 per cent on long-distance calls costing more than 24 cents, and 10 per cent on telegraph, radio and cable messages. This “fair and equal” treatment of services used by the lower middle class and the workers, such as local telephones, with those used by the very wealthy, such as radio and cable messages, is typical of the perverted sense of justice that permeates the entire bill. Unless the trade unions and workers launch a real campaign for a genuine, 100 PER CENT EXCESS PROFITS TAX, WITHOUT ANY LOOPHOLES, they might as well resign themselves to footing the entire cost of the war.
*
The real boss of World War I, Wall Street’s white-haired boy, Barney Baruch, testified last week in connection with the pending price control bill. This outstanding representative of the ruling class in this country painted a very dark picture of what happens under inflation and what the aftermath of war may lead to. He was delightfully vague, however, on how to prevent these dire things from happening. The profit must be taken out of war. Yes, we agree, but how? Just establish price ceilings and everything will be hunky-dory. Freezing wages will not affect labor’s right to strike or the right of every worker to bargain collectively. No, it would just render the major weapons of labor absolutely useless.
Fairy tales aside, what Mr. Baruch was trying to tell the political representatives of the bosses is that if you want to lick Hitler you’ve got to use Hitler’s methods – that is, under capitalism. Said the duPonts’ family adviser: “If we are to keep the war from reaching these shores or win any war into which we are thrust, it will not be done by ‘business as usual’ but by the full mobilization of our economic resources as in 1918 and it must not be too little or loo late.” That he really didn’t mean the modest mobilization of 1918 but Hitler’s type of mobilization, which was swiped from the American Army’s M-Day plans, can be seen from the very next sentence: “Full mobilization means transforming American industry from a highly competitive economy to a practically single unitary system under which all producers will cooperate, sharing trade secrets, pooling patents, resources and facilities.”
Monopoly capitalism must be placed firmly in the saddle. This is the program recommended by Mr. Baruch. Anything or anybody that stands in its way must be pushed aside, crushed. This is the program of the National Association of Manufacturers and the big capitalists. It gives the lie to Baruch’s conclusion: The status quo of all should remain until the war is ended.” No, when things are changing very rapidly, as at present, no power on earth can keep the face of the world as it has been. Either the workers make up their minds to take what is their just due or the bosses will impose an American form of fascism on them.
*
A dispatch from Berlin, printed in the financial section of the New York Times, September 21, says: “Announcement that the Reich has sold its controlling interest in the Hamburg-American Line and in the North German Lloyd to a group of business men in Hamburg and Bremen took the financial market here by surprise. The step itself may be. in line with the accepted policy of the Nazi government, which on various occasions, has stressed its aversion to government ownership and to the operation of business concerns.” (Emphasis mine – F.D.) And some people still think that there is a “new” social order in Germany! It is still capitalism, to any but the blind, but it represents a further and logical development of capitalism – namely, state monopoly capitalism.
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<h2>Frank Demby</h2>
<h1>Prosperity Around the Corner?</h1>
<h3>(August 1940)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1940/index.htm#la04_18" target="new">Vol. 4 No. 18, 12 August 1940</a>, p. 3.<br>
Table from p. 1.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">As usual, the important news is being buried by the capitalist press in the corners of their financial pages. While you and the average worker may be worrying about how to feed your families decently, how you are going to pay the rent and send the family on a much-needed vacation at the same time, while 9,000,000 (latest official figure) unemployed are still gazing wistfully at “No Help Wanted” signs; and, incidentally, while the Government is spending billions and billions of dollars on “Defense” and occasionally worrying about where the money is to come from, the big corporations of the country are raking in profits at a terrific rate – reminiscent of the boom days of 1929.</p>
<p>What? You didn’t receive your quarterly dividend check? The mailman must have mistakenly given it to your neighbor. Better check up on him tomorrow.</p>
<p>Just in case you belong to the 90% of the population who don’t own stocks and clip coupons for a living and the almost equally large proportion of the population who have never been educated to the importance of reading the financial pages, I’ve drawn up a few figures and comments for you to mull over in your mind after a good, heavy dinner (see box <a href="#table">below</a>).</p>
<p>That the corporations listed are by no means exceptions is shown by the fact that the first 100 companies reporting earnings for the first half of 1940, according to a compilation made by <strong>The New York Times</strong>, had an aggregate net income of $113,658,828 – or a net gain of 60.5% over the first half of 1939. An Associated Press compilation of the first 150 corporations to report for the second quarter of 1940 shows an aggregate net income of $168,902,000 – or a net gain of 39% over the second quarter of 1939. Excluding A.T.&T., the net gain becomes 52%. And this, mind you, excludes such great corporations as General Motors, which, during the previous ten (depression) years made over $1,000,000,000 net profit.</p>
<p>While, to quote <strong>The New York Times</strong>’ comment, “The tone of corporation executives’ letters to their stockholders, which accompanied the earnings statements, was predominantly optimistic,” <strong>union demands for increased wages have almost uniformly been met with a categorical “No!”</strong></p>
<p>At the same time, activity on the New York Stock Exchange during the month of July declined to the lowest figure in more than two decades!</p>
<p>What does it all mean? First, note that the more corporations that are included, the smaller becomes the increase in the rate of profit. In simple English, this means that every year fewer and fewer of the great corporations are making more and more of the profits.<br>
</p>
<h4>The Story of Steel</h4>
<p class="fst">If further proof of this fundamental fact is needed, let us look more closely at the statement of U.S. Steel. One might think that with an increase of 1,743 per cent in profits there might be, if not a corresponding increase in wages, then, at least a substantial increase in wages, For the first half of 1940, U.S. Steel employed 242,144 workers with a total payroll of $198,871,911. For the corresponding period of 1939, the figures were 208,133 workers with a total payroll of $163,461,751. What are the workers bellyaching about, anyway, Mr. Stettinius and his successor, Mr. Olds, undoubtedly want to know? Didn’t we pay out over $36,000,000 more in wages this year?</p>
<p><strong>Aside from the fact that these figures are for employees, which includes high-salaried executives, so that it is impossible to figure out the real average wage per worker, THESE FIGURES REVEAL AN INCREASE OF ONLY $40 PER EMPLOYEE. That is to say, by hiring a few thousand more workers, paying them an average of less than $7 per month more than they got in 1939, PRODUCTION WAS STEPPED UP OVER 94% OF CAPACITY AND PROFITS ROSE SKY-HIGH.</strong></p>
<p>The story of U.S. Steel is symbolic and representative of what is happening in American industry today, and also what ails this country today. During the last decade, American industry has gone through such a tremendous process of rational lotion, introducing the most up-to-date labor-saving devices that very small increases in the laboring force and in wages result in tremendous increases in production and absolutely phenomenal increases in profits. Millions of workers are now permanently useless to the industrial process under capitalism. The recovery in profits is not only the story of the remarkable technical skill and efficiency of American industry but equally the story of millions of unemployed and even more millions trying to eke out a living on starvation wages. <strong>In other words, PROFITS ARE LITERALLY BEING COINED OUT OF WORKERS’ SWEAT AND BLOOD.</strong></p>
<p>The recovery in profits is due to many factors, but the factor which dominates at the present time is the war. It is significant that the big profits are being shown by the heavy industries and the railroads. The U.S., following the example of Europe, has entered upon an armaments economy. What this means, I shall try to show in detail in subsequent articles. For the present, let me conclude by pointing out that the abnormally low volume of sales on the Stock Exchange in the face of these unusually high profits merely reveals that Wall Street is well aware of the fact that the “prosperity” in this country is based on the war and the continuation of the war, and during July Wall Street was unable to make up its mind whether the war was going to continue or not. Perhaps Messrs. Molotoff, Hitler, Churchill and Roosevelt will furnish them with an affirmative answer.</p>
<table align="center" cellpadding="6" cellspacing="3" border="6">
<tbody><tr>
<td>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<td colspan="6">
<h4><a id="table" name="table"></a><small><small>You Earned It – They Got It</small></small></h4>
</td>
</tr>
<tr>
<th>
<p class="smc">Corporation</p>
</th>
<th>
<p class="smc">Net Profits<br>
During<br>
First Half<br>
of 1940</p>
</th>
<td rowspan="19">
<p class="smc"> </p>
</td>
<th>
<p class="smc">Increase<br>
Over<br>
First Half<br>
of 1939</p>
</th>
<td rowspan="19">
<p class="smc"> </p>
</td>
<th>
<p class="smc">%<br>
Increase</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">United States Steel</p>
</td>
<td>
<p class="smc">$36,315,003</p>
</td>
<td>
<p class="smc">$34,344.692</p>
</td>
<td>
<p class="smc">1743.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Remington Arms</p>
</td>
<td>
<p class="smc"> 1,219,000</p>
</td>
<td>
<p class="smc"> 1,075,000</p>
</td>
<td>
<p class="smc"> 746.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Republic Steel</p>
</td>
<td>
<p class="smc"> 6,449,453</p>
</td>
<td>
<p class="smc"> 5,366,142</p>
</td>
<td>
<p class="smc"> 495.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Tidewater Oil</p>
</td>
<td>
<p class="smc"> 5,904,865</p>
</td>
<td>
<p class="smc"> 4,698,455</p>
</td>
<td>
<p class="smc"> 388.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Glen Martin Aircraft</p>
</td>
<td>
<p class="smc"> 4,291,490</p>
</td>
<td>
<p class="smc"> 3,323,866</p>
</td>
<td>
<p class="smc"> 343.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Youngstown</p>
</td>
<td>
<p class="smc"> 2,423,212</p>
</td>
<td>
<p class="smc"> 1,877,019</p>
</td>
<td>
<p class="smc"> 343.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Minnesota Paper Co.</p>
</td>
<td>
<p class="smc"> 1,120,788</p>
</td>
<td>
<p class="smc"> 881,852</p>
</td>
<td>
<p class="smc"> 327.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Atlantic Refining</p>
</td>
<td>
<p class="smc"> 5,266,000</p>
</td>
<td>
<p class="smc"> 3,913,000</p>
</td>
<td>
<p class="smc"> 289.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Bethlehem</p>
</td>
<td>
<p class="smc"> 21,698,457</p>
</td>
<td>
<p class="smc"> 15,466,471</p>
</td>
<td>
<p class="smc"> 247.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Douglas Aircraft</p>
</td>
<td>
<p class="smc"> 3,388,857</p>
</td>
<td>
<p class="smc"> 1,992,065</p>
</td>
<td>
<p class="smc"> 142.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Commercial Solvents</p>
</td>
<td>
<p class="smc"> 1,046,551</p>
</td>
<td>
<p class="smc"> 608,451</p>
</td>
<td>
<p class="smc"> 138.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Libby-Owens-Ford Gloss</p>
</td>
<td>
<p class="smc"> 5,176,748</p>
</td>
<td>
<p class="smc"> 2,521,935</p>
</td>
<td>
<p class="smc"> 95.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">General Electric</p>
</td>
<td>
<p class="smc"> 25,871,572</p>
</td>
<td>
<p class="smc"> 9,501,380</p>
</td>
<td>
<p class="smc"> 58.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Caterpillar Tractor</p>
</td>
<td>
<p class="smc"> 3,509,514</p>
</td>
<td>
<p class="smc"> 1,194,134</p>
</td>
<td>
<p class="smc"> 51.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Chrysler</p>
</td>
<td>
<p class="smc"> 30,494,274</p>
</td>
<td>
<p class="smc"> 5,148,503</p>
</td>
<td>
<p class="smc"> 23.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">E.I. DuPont de Nemours</p>
</td>
<td>
<p class="smc"> 46,853,695</p>
</td>
<td>
<p class="smc"> 6,982,160</p>
</td>
<td>
<p class="smc"> 17.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">General Motors</p>
</td>
<td>
<p class="smc">115,575,460</p>
</td>
<td>
<p class="smc"> 12,588,929</p>
</td>
<td>
<p class="smc"> 12.</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">American Telephone and Telegraph</p>
</td>
<td>
<p class="smc"> 44,933,952</p>
</td>
<td>
<p class="smc"> 4,563,033</p>
</td>
<td>
<p class="smc"> 11.</p>
</td>
</tr>
</tbody></table>
</td>
</tr>
</tbody></table>
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Frank Demby
Prosperity Around the Corner?
(August 1940)
From Labor Action, Vol. 4 No. 18, 12 August 1940, p. 3.
Table from p. 1.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
As usual, the important news is being buried by the capitalist press in the corners of their financial pages. While you and the average worker may be worrying about how to feed your families decently, how you are going to pay the rent and send the family on a much-needed vacation at the same time, while 9,000,000 (latest official figure) unemployed are still gazing wistfully at “No Help Wanted” signs; and, incidentally, while the Government is spending billions and billions of dollars on “Defense” and occasionally worrying about where the money is to come from, the big corporations of the country are raking in profits at a terrific rate – reminiscent of the boom days of 1929.
What? You didn’t receive your quarterly dividend check? The mailman must have mistakenly given it to your neighbor. Better check up on him tomorrow.
Just in case you belong to the 90% of the population who don’t own stocks and clip coupons for a living and the almost equally large proportion of the population who have never been educated to the importance of reading the financial pages, I’ve drawn up a few figures and comments for you to mull over in your mind after a good, heavy dinner (see box below).
That the corporations listed are by no means exceptions is shown by the fact that the first 100 companies reporting earnings for the first half of 1940, according to a compilation made by The New York Times, had an aggregate net income of $113,658,828 – or a net gain of 60.5% over the first half of 1939. An Associated Press compilation of the first 150 corporations to report for the second quarter of 1940 shows an aggregate net income of $168,902,000 – or a net gain of 39% over the second quarter of 1939. Excluding A.T.&T., the net gain becomes 52%. And this, mind you, excludes such great corporations as General Motors, which, during the previous ten (depression) years made over $1,000,000,000 net profit.
While, to quote The New York Times’ comment, “The tone of corporation executives’ letters to their stockholders, which accompanied the earnings statements, was predominantly optimistic,” union demands for increased wages have almost uniformly been met with a categorical “No!”
At the same time, activity on the New York Stock Exchange during the month of July declined to the lowest figure in more than two decades!
What does it all mean? First, note that the more corporations that are included, the smaller becomes the increase in the rate of profit. In simple English, this means that every year fewer and fewer of the great corporations are making more and more of the profits.
The Story of Steel
If further proof of this fundamental fact is needed, let us look more closely at the statement of U.S. Steel. One might think that with an increase of 1,743 per cent in profits there might be, if not a corresponding increase in wages, then, at least a substantial increase in wages, For the first half of 1940, U.S. Steel employed 242,144 workers with a total payroll of $198,871,911. For the corresponding period of 1939, the figures were 208,133 workers with a total payroll of $163,461,751. What are the workers bellyaching about, anyway, Mr. Stettinius and his successor, Mr. Olds, undoubtedly want to know? Didn’t we pay out over $36,000,000 more in wages this year?
Aside from the fact that these figures are for employees, which includes high-salaried executives, so that it is impossible to figure out the real average wage per worker, THESE FIGURES REVEAL AN INCREASE OF ONLY $40 PER EMPLOYEE. That is to say, by hiring a few thousand more workers, paying them an average of less than $7 per month more than they got in 1939, PRODUCTION WAS STEPPED UP OVER 94% OF CAPACITY AND PROFITS ROSE SKY-HIGH.
The story of U.S. Steel is symbolic and representative of what is happening in American industry today, and also what ails this country today. During the last decade, American industry has gone through such a tremendous process of rational lotion, introducing the most up-to-date labor-saving devices that very small increases in the laboring force and in wages result in tremendous increases in production and absolutely phenomenal increases in profits. Millions of workers are now permanently useless to the industrial process under capitalism. The recovery in profits is not only the story of the remarkable technical skill and efficiency of American industry but equally the story of millions of unemployed and even more millions trying to eke out a living on starvation wages. In other words, PROFITS ARE LITERALLY BEING COINED OUT OF WORKERS’ SWEAT AND BLOOD.
The recovery in profits is due to many factors, but the factor which dominates at the present time is the war. It is significant that the big profits are being shown by the heavy industries and the railroads. The U.S., following the example of Europe, has entered upon an armaments economy. What this means, I shall try to show in detail in subsequent articles. For the present, let me conclude by pointing out that the abnormally low volume of sales on the Stock Exchange in the face of these unusually high profits merely reveals that Wall Street is well aware of the fact that the “prosperity” in this country is based on the war and the continuation of the war, and during July Wall Street was unable to make up its mind whether the war was going to continue or not. Perhaps Messrs. Molotoff, Hitler, Churchill and Roosevelt will furnish them with an affirmative answer.
You Earned It – They Got It
Corporation
Net Profits
During
First Half
of 1940
Increase
Over
First Half
of 1939
%
Increase
United States Steel
$36,315,003
$34,344.692
1743.
Remington Arms
1,219,000
1,075,000
746.
Republic Steel
6,449,453
5,366,142
495.
Tidewater Oil
5,904,865
4,698,455
388.
Glen Martin Aircraft
4,291,490
3,323,866
343.
Youngstown
2,423,212
1,877,019
343.
Minnesota Paper Co.
1,120,788
881,852
327.
Atlantic Refining
5,266,000
3,913,000
289.
Bethlehem
21,698,457
15,466,471
247.
Douglas Aircraft
3,388,857
1,992,065
142.
Commercial Solvents
1,046,551
608,451
138.
Libby-Owens-Ford Gloss
5,176,748
2,521,935
95.
General Electric
25,871,572
9,501,380
58.
Caterpillar Tractor
3,509,514
1,194,134
51.
Chrysler
30,494,274
5,148,503
23.
E.I. DuPont de Nemours
46,853,695
6,982,160
17.
General Motors
115,575,460
12,588,929
12.
American Telephone and Telegraph
44,933,952
4,563,033
11.
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<h2>Frank Demby</h2>
<h1>American Capitalism Gets an Outline of<br>
Its Economic Program for the War</h1>
<h3>(January 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_01" target="new">Vol. 5 No. 1</a>, 6 January 1941, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">Ever since the last war, the intelligent capitalists of this country have been analyzing the experiences of World War I in preparation for the inevitable outbreak of World War II. These analyses involve not only military preparation, but also economic preparation. The fruits of the economic investigations are to be found in a little book, called <strong>Wartime Control of Prices</strong> (written by Charles O. Hardy and published by the Brookings Institution, Washington, B.C. in September 1940 – price $1.00). Mr. Hardy proposes a very simple program – rigid control of prices. This includes all prices, not only the prices of the commodities which we have to buy and which the Government must buy in order to carry out the military program, but wages and rents as well. The only exception to this program is profits. In order to concentrate all energies on the war effort, all restrictions on the efficient (cheap) mobilization of both human and natural resources must be abandoned – at least, for the duration of the “emergency” period.<br>
</p>
<h4>Reforms Go First</h4>
<p class="fst">That this is the real program of the American capitalists can be readily seen from a few comparisons of what is recommended by Mr. Hardy with what is actually going on now. Mr. Hardy proposes that the “Walsh-Healey Act be suspended for the duration of the war emergency.” The Navy Department has recently made this proposal, because it has made more difficult the letting of contracts by the Navy. In other words, one of the key reforms of the New Deal – that companies serving the Government should maintain “adequate” standards of pay and working conditions – is to be thrown into the waste paper basket because capital is insisting that the sky is the limit for profits. What a commentary on this Second World War for Democracy! Mr. Hardy, in effect, is for outlawing strikes in “national defense” industries. This has not as yet been enacted into law, but what a campaign the capitalists and their agents are putting on to accomplish this. Only the conscious and determined opposition of organized labor can prevent this undermining of one of the fundamental and hard-won democratic rights of labor. Similarly, for the 40 hour week, time and a half for overtime, WPA, relief and virtually everything else that can possibly be considered progressive. If the workers permit the capitalists to carry out their program, all of these will be abolished.</p>
<p>The experiences of World War II to date shows that in many ways the civilian population (if one can speak of a civilian population as separate and distinct from the armed forces) plays a key role in the maintenance of national morale. When prices rise substantially and the real income of the population declines, the capitalist understands that it is more difficult to convince the population at large of the justness of the war. Fragmentary reports that have reached us so far indicate that, on the average, prices’ have risen 50% and the standard of living has declined by at least one-third in all belligerent countries.</p>
<p>To be sure, the cost of the war must be borne by the people in the form of declining standards of living, for from an economic point of view, war is sheer and unadulterated waste. The problem, however, is to sugar-coat the declining standard of living so that it appears not to be as great as it is. This is made especially necessary by the experiences (still within the living memory of many adult citizens) that every belligerent country experienced during and after the last war with inflation, catastrophic declines in living standards – a few making millions in sharp contrast to the remainder of the population – and the general economic breakdown which is the inevitable aftermath of war.</p>
<p>To all these considerations, there is added another, which makes the current problem of price control even more fundamental than at any in the history of capitalism. Capitalism has clearly entered upon its period of decline. Discussion of what the new order of things will be after this war is unavoidable. The ruling class, as a whole, is keenly aware of the impact of the war upon their established order of society. They wish to make as certain as they can that any controls introduced – in fact, any governmental measures of any type whatsoever – shall not alter the basic foundations of capitalism.<br>
</p>
<h4>A Blueprint for War</h4>
<p class="fst">During the First World War, the cost of living rose some 60% in the United States. Certain commodity prices, such as sugar, butter and meats, rose between 100% and 200%, and in some of these cases rationing was required. In all the warring countries today, on top of the substantial price rises and inferior quality of many commodities, rationing of many essentials is already in effect. The Government is not only interested in this problem from the point of view of its effect on the standards of living and, therefore, on civilian morale, but in the most direct way it is concerned with the cost of the war effort.</p>
<p>The more prices rise, the greater is the cost of the war to the Government. The greater the cost of the war, the greater the necessity for increasing taxation of all sorts. Increased taxation is always a difficult measure for any popularly elected government to resort to, because it is sure to raise a storm of protest from one or more sections of the population. Hence in a very practical and direct way, the government is interested in such a study as Mr. Hardy has made from the point, of view of cutting down the cost of war to it.</p>
<p>What emerges as outstanding in Mr. Hardy’s discussion is that although he is speaking about controlling prices during the present period – that is, one of national “defense,” when formally speaking, the country is not at war – he himself makes the admission that the problems which confront the organization of the “defense” effort are substantially the same as they would be if the United States were actually engaged in war. So what we have is a primer or a blueprint of what is in store for us during the next five years – which is the legal limitation at present of the “emergency” period. The second outstanding fact that Mr. Hardy, and we may be sure the members of the government as well, realizes is that: “The problem of economic organization in time of war differs from that in time of peace in that it is essential to concentrate productive energies on an abnormal emergency objective – that of winning the war.” All energies must be devoted to this end. Everything else is secondary, including to be sure, the preservation of those democratic rights, for which, presumably, the war is to be fought.<br>
</p>
<h4>Sees Tight Control</h4>
<p class="fst">Since controls were required during the last war, Mr. Hardy correctly assumes that even more extensive controls will be required this time. The only question in his mind is the character of these controls and the efficacy of some of these controls as compared to others. The conclusion implicit in the book is that far more extensive controls will be required this time than last. While the author does not say so directly, in view of the criticisms he makes of the methods used during the last war, the implication is clear that such far reaching controls will be required this time that the difference between the economic setup in the United States at war and that which prevails in totalitarian countries will be very slight indeed.</p>
<p>Another outstanding feature of the study is that no matter what proposal is discussed or proposed, there is always a conscious emphasis on the necessity for maintaining profits. Even in discussing the price-ceiling plan of Mr. Bernard Baruch, who was Chairman of the War Industries Board during the World War and also a member of the Price-Fixing Committee, the necessity for establishing such prices which will yield profits even to the high-cost producer is made quite clear. This, in spite of the title of the book (privately printed) in which Mr. Baruch presents his views – <strong>Taking the Profits Out of War</strong>. For example, in summarizing the lessons of the last war, Mr. Hardy states: “<em>There was undue reliance on the excess profits tax to correct unnecessarily high prices paid by the government.”</em></p>
<p>From a technical point of view one of the few shortcomings of the book is that it omits any real discussion uf profits and their control during wartime. But what else can be the meaning of the passage quoted than a defense of the necessity of industry making profits in order to organize a war effort “most efficiently?” And, of course, the experiences of the last war and the present war to date show very clearly that war is a profitable undertaking for the capitalist class, or at least for the most powerful sections of it, even if it means untold misery and privation for the masses of the population.<br>
</p>
<h4>Labor Takes Rap</h4>
<p class="fst">That the plans discussed in this book are thoroughly reactionary from the point of view of labor and the mass of peoples is not surprising. But what is surprising is that the entire reactionary program of the war department should here be set down in black on white for all those with eyes to see. First of all, the author advocates “compulsory labor at wages which the worker is not free to reject” for those directly employed by the government. It should be obvious that the number of people</p>
<p>directly employed by the government represents a far larger proportion of the total population this lime than in the case of the last war. Since the conception of the war effort which Mr. Hardy has, in common with the rest of the capitalists, is that all that matters is winning the war – not how the war is won and what the effects of the various methods will be, he quite logically proposes, for example, the suspension of the Walsh-Healey Act If one has any doubt of the intentions of big business, just read very carefully the following excerpts from Mr, Hardy, which clearly speaks for them:</p>
<p class="quoteb">“<em>To take the position that labor should make no contribution toward carrying the economic burden of the war would be indefensible ... If labor is to make any economic contribution to the cost of the war. the cost of living must rise more than the wage rates.”</em></p>
<p class="fst"><em>Again, “Unemployment benefits should sot be permitted to act as drag on re-employment.”</em> Hence out of the window with WPA, relief – and perhaps even with unemployment insurance.</p>
<p>Since Mr. Hardy, (erroneously) attributes the 1937 collapse to increases in wages, it is only natural that he is against any wage increases during the war period, except in a few exceptional cases. The Government would be given by Mr. Hardy the authority to review and decide all collective bargaining agreements now in effect. “<em>All restrictions on hours of labor, except those that serve a bona fide purpose of protecting workers’ health, must he abrogated.” Compulsory payments of time and a half for overtime must be abolished. By not-too-well-concealed implications, Mr. Hardy is also for the outlawing of strikes. Shades of Hitler! This is the real program of the capitalist class, for which the workers of America will be told to lay down their lives.</em></p>
<p>This investigation of the experiences of American imperialism in controlling prices during the First World War, with recommendations for price control during the Second World War, was undertaken at the request of the United States War Department. Therein lies the tremendous significance of the book. It represents the policies which the capitalists are considering and proposing in relation to the economic control of the nation. It goes without saying that labor cannot look to its own defense unless it knows and understands the plans of the Government. The book should really be compulsory reading for every trade unionist – indeed for everyone who does not live off the fruits of other people’s labor.</p>
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Frank Demby
American Capitalism Gets an Outline of
Its Economic Program for the War
(January 1941)
From Labor Action, Vol. 5 No. 1, 6 January 1941, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Ever since the last war, the intelligent capitalists of this country have been analyzing the experiences of World War I in preparation for the inevitable outbreak of World War II. These analyses involve not only military preparation, but also economic preparation. The fruits of the economic investigations are to be found in a little book, called Wartime Control of Prices (written by Charles O. Hardy and published by the Brookings Institution, Washington, B.C. in September 1940 – price $1.00). Mr. Hardy proposes a very simple program – rigid control of prices. This includes all prices, not only the prices of the commodities which we have to buy and which the Government must buy in order to carry out the military program, but wages and rents as well. The only exception to this program is profits. In order to concentrate all energies on the war effort, all restrictions on the efficient (cheap) mobilization of both human and natural resources must be abandoned – at least, for the duration of the “emergency” period.
Reforms Go First
That this is the real program of the American capitalists can be readily seen from a few comparisons of what is recommended by Mr. Hardy with what is actually going on now. Mr. Hardy proposes that the “Walsh-Healey Act be suspended for the duration of the war emergency.” The Navy Department has recently made this proposal, because it has made more difficult the letting of contracts by the Navy. In other words, one of the key reforms of the New Deal – that companies serving the Government should maintain “adequate” standards of pay and working conditions – is to be thrown into the waste paper basket because capital is insisting that the sky is the limit for profits. What a commentary on this Second World War for Democracy! Mr. Hardy, in effect, is for outlawing strikes in “national defense” industries. This has not as yet been enacted into law, but what a campaign the capitalists and their agents are putting on to accomplish this. Only the conscious and determined opposition of organized labor can prevent this undermining of one of the fundamental and hard-won democratic rights of labor. Similarly, for the 40 hour week, time and a half for overtime, WPA, relief and virtually everything else that can possibly be considered progressive. If the workers permit the capitalists to carry out their program, all of these will be abolished.
The experiences of World War II to date shows that in many ways the civilian population (if one can speak of a civilian population as separate and distinct from the armed forces) plays a key role in the maintenance of national morale. When prices rise substantially and the real income of the population declines, the capitalist understands that it is more difficult to convince the population at large of the justness of the war. Fragmentary reports that have reached us so far indicate that, on the average, prices’ have risen 50% and the standard of living has declined by at least one-third in all belligerent countries.
To be sure, the cost of the war must be borne by the people in the form of declining standards of living, for from an economic point of view, war is sheer and unadulterated waste. The problem, however, is to sugar-coat the declining standard of living so that it appears not to be as great as it is. This is made especially necessary by the experiences (still within the living memory of many adult citizens) that every belligerent country experienced during and after the last war with inflation, catastrophic declines in living standards – a few making millions in sharp contrast to the remainder of the population – and the general economic breakdown which is the inevitable aftermath of war.
To all these considerations, there is added another, which makes the current problem of price control even more fundamental than at any in the history of capitalism. Capitalism has clearly entered upon its period of decline. Discussion of what the new order of things will be after this war is unavoidable. The ruling class, as a whole, is keenly aware of the impact of the war upon their established order of society. They wish to make as certain as they can that any controls introduced – in fact, any governmental measures of any type whatsoever – shall not alter the basic foundations of capitalism.
A Blueprint for War
During the First World War, the cost of living rose some 60% in the United States. Certain commodity prices, such as sugar, butter and meats, rose between 100% and 200%, and in some of these cases rationing was required. In all the warring countries today, on top of the substantial price rises and inferior quality of many commodities, rationing of many essentials is already in effect. The Government is not only interested in this problem from the point of view of its effect on the standards of living and, therefore, on civilian morale, but in the most direct way it is concerned with the cost of the war effort.
The more prices rise, the greater is the cost of the war to the Government. The greater the cost of the war, the greater the necessity for increasing taxation of all sorts. Increased taxation is always a difficult measure for any popularly elected government to resort to, because it is sure to raise a storm of protest from one or more sections of the population. Hence in a very practical and direct way, the government is interested in such a study as Mr. Hardy has made from the point, of view of cutting down the cost of war to it.
What emerges as outstanding in Mr. Hardy’s discussion is that although he is speaking about controlling prices during the present period – that is, one of national “defense,” when formally speaking, the country is not at war – he himself makes the admission that the problems which confront the organization of the “defense” effort are substantially the same as they would be if the United States were actually engaged in war. So what we have is a primer or a blueprint of what is in store for us during the next five years – which is the legal limitation at present of the “emergency” period. The second outstanding fact that Mr. Hardy, and we may be sure the members of the government as well, realizes is that: “The problem of economic organization in time of war differs from that in time of peace in that it is essential to concentrate productive energies on an abnormal emergency objective – that of winning the war.” All energies must be devoted to this end. Everything else is secondary, including to be sure, the preservation of those democratic rights, for which, presumably, the war is to be fought.
Sees Tight Control
Since controls were required during the last war, Mr. Hardy correctly assumes that even more extensive controls will be required this time. The only question in his mind is the character of these controls and the efficacy of some of these controls as compared to others. The conclusion implicit in the book is that far more extensive controls will be required this time than last. While the author does not say so directly, in view of the criticisms he makes of the methods used during the last war, the implication is clear that such far reaching controls will be required this time that the difference between the economic setup in the United States at war and that which prevails in totalitarian countries will be very slight indeed.
Another outstanding feature of the study is that no matter what proposal is discussed or proposed, there is always a conscious emphasis on the necessity for maintaining profits. Even in discussing the price-ceiling plan of Mr. Bernard Baruch, who was Chairman of the War Industries Board during the World War and also a member of the Price-Fixing Committee, the necessity for establishing such prices which will yield profits even to the high-cost producer is made quite clear. This, in spite of the title of the book (privately printed) in which Mr. Baruch presents his views – Taking the Profits Out of War. For example, in summarizing the lessons of the last war, Mr. Hardy states: “There was undue reliance on the excess profits tax to correct unnecessarily high prices paid by the government.”
From a technical point of view one of the few shortcomings of the book is that it omits any real discussion uf profits and their control during wartime. But what else can be the meaning of the passage quoted than a defense of the necessity of industry making profits in order to organize a war effort “most efficiently?” And, of course, the experiences of the last war and the present war to date show very clearly that war is a profitable undertaking for the capitalist class, or at least for the most powerful sections of it, even if it means untold misery and privation for the masses of the population.
Labor Takes Rap
That the plans discussed in this book are thoroughly reactionary from the point of view of labor and the mass of peoples is not surprising. But what is surprising is that the entire reactionary program of the war department should here be set down in black on white for all those with eyes to see. First of all, the author advocates “compulsory labor at wages which the worker is not free to reject” for those directly employed by the government. It should be obvious that the number of people
directly employed by the government represents a far larger proportion of the total population this lime than in the case of the last war. Since the conception of the war effort which Mr. Hardy has, in common with the rest of the capitalists, is that all that matters is winning the war – not how the war is won and what the effects of the various methods will be, he quite logically proposes, for example, the suspension of the Walsh-Healey Act If one has any doubt of the intentions of big business, just read very carefully the following excerpts from Mr, Hardy, which clearly speaks for them:
“To take the position that labor should make no contribution toward carrying the economic burden of the war would be indefensible ... If labor is to make any economic contribution to the cost of the war. the cost of living must rise more than the wage rates.”
Again, “Unemployment benefits should sot be permitted to act as drag on re-employment.” Hence out of the window with WPA, relief – and perhaps even with unemployment insurance.
Since Mr. Hardy, (erroneously) attributes the 1937 collapse to increases in wages, it is only natural that he is against any wage increases during the war period, except in a few exceptional cases. The Government would be given by Mr. Hardy the authority to review and decide all collective bargaining agreements now in effect. “All restrictions on hours of labor, except those that serve a bona fide purpose of protecting workers’ health, must he abrogated.” Compulsory payments of time and a half for overtime must be abolished. By not-too-well-concealed implications, Mr. Hardy is also for the outlawing of strikes. Shades of Hitler! This is the real program of the capitalist class, for which the workers of America will be told to lay down their lives.
This investigation of the experiences of American imperialism in controlling prices during the First World War, with recommendations for price control during the Second World War, was undertaken at the request of the United States War Department. Therein lies the tremendous significance of the book. It represents the policies which the capitalists are considering and proposing in relation to the economic control of the nation. It goes without saying that labor cannot look to its own defense unless it knows and understands the plans of the Government. The book should really be compulsory reading for every trade unionist – indeed for everyone who does not live off the fruits of other people’s labor.
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<h2>Frank Demby</h2>
<h4>For Workers’ Control of Price-Fixing</h4>
<h1>What to Do About the Rise in Prices</h1>
<h3>(August 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_31" target="new">Vol. 5 No. 31</a>, 4 August 1941, p. 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">The developing war economy in the United Slates has finally reached the point where every person in the country will feel iis effects in the most direct and immediate sense. It has been announced from Washington that price-fixing legislation will be introduced into Congress this week. The immediate reason for this drastic step is that the inflationary movement of prices is threatening to get out of hand. This would cause a tremendous increase in the cost of the armaments program, as well as a serious weakening of civilian morale. The experiences in World War I and since have taught the capitalists that rapidly rising prices must be prevented at all costs, if they would preserve their system from social disintegration. <strong>Labor Action</strong> has repeatedly pointed out that the capitalists are face to face with a dilemma that free, competitive capitalism cannot solve. The spending of billions and billions of dollars for war purposes means either inflation or totalitarianism. There is no escape from this dilemma under capitalism. Leon Henderson, director of the Office of Price Administration and Civilian Supply, has already admitted that voluntary control of prices is breaking down. Many corporations simply refuse to abide by the price ceilings, that is, the maximum prices set by Mr. Henderson. Others are getting around the price ceilings by producing articles of inferior quality – without, of course, advertising this fact to the consumer or to the government. Still others are developing a very refined illegal or bootleg trade, especially in certain key raw materials. All of ‘this’ is perfectly natural and inevitable under a capitalism where the urge to obtain profits takes precedence over everything else.<br>
</p>
<h4>More Money to Buy Less Goods</h4>
<p class="fst">If a manufacturer finds that his costs have increased due to (1) increased wages as a result of labor’s drive to improve its standard of living or simply to maintain living conditions at existing levels (2) higher prices for raw materials, as a result of higher shipping costs imposed by the war and higher prices for agricultural raw materials as a result of the government’s farm program, or (3) higher taxes, as a result’ of the government’s attempt to defray somewhat the cost of the war program, he will not voluntarily content himself with a reduced profit. He is in business to make the maximum profit possible and his concept of patriotism gives him the moral right, and even the obligation, to pursue his profit-making instincts to the utmost. Moreover, if he should attempt to curb them, he will soon find himself swallowed up by a bigger capitalist. Consequently, he raises the prices of the things he produces and sells.</p>
<p>This development is clearly shown by the fact that wholesale prices have risen almost 50 per cent since the outbreak of World War II and by the current rise in retail prices which is rapidly threatening to equal that of wholesale prices. This development is absolutely irresistible as the war economy expands in size and scope. For it has meant a tremendous increase in available consumer purchasing power, accompanied at the same time by a considerable decrease in the production of consumer goods. The shift from consumer goods industries to war industries is only beginning to get under way in this country, but it will now proceed at a very rapid rate. <em>Putting the matter in its most simple terms, more people have more money with which to buy less and less goods.</em> Prices must go up under such circumstances unless controlled by the government.<br>
</p>
<h4>Alternatives Under Capitalism</h4>
<p class="fst">Government control of prices, however, is not a simple matter – as the British and American governments have already learned. If done on a piecemeal basis, it is incomplete and only serves to create antagonisms and dissatisfaction without preventing inflation.</p>
<p class="quoteb">“It is realized by the Administration,” says a dispatch to the <strong>New York Times</strong> of July 18, “that unless prices are strictly controlled or consumer buying is kept down by some other means, inflation can scarcely be averted. A study of German methods of price control, recently published by the Commerce Department indicated, however, that control of prices is not effective unless (1) all prices are controlled, (2) wages, rents and dividends are also controlled.”</p>
<p class="fst">Here, the capitalists run squarely into the second horn of the dilemma. If prices are not controlled, there will be inflation, with all its catastrophic consequences. On the other hand, if prices are controlled, it must be a strict and complete control in order to be effective. Half-way measures will not suffice, as the experience of England clearly shows. The only way that inflation can be prevented under a capitalist war economy is to follow the German method. Rigid control of all prices means complete government control of the entire economy. The government will decide how much profit the capitalist will make, how much rent the landlord should receive, how much wages the worker should get. The government, in effect, will decide where industries are to be built, whose capital and how much of it will be used to build the necessary war industries, what workers will work and where they will work, and under what conditions they will work. Such a complete ordering of ‘people’s lives, by a government, in this era of capitalist decay, means totalitarianism – no matter how pleasantly it may he dressed up by clever propagandists. In other words, <em>the only way that inflation can be prevented under capitalism is through the adoption of fascist, totalitarian methods</em>.</p>
<p>This is already understood by certain sections of the population. It will soon be understood by everyone with eyes to see, for price-fixing means arbitrary control of the dollar. Arbitrary control of the dollar means an attempt to freeze the class struggle. At present, each class in society and each group within each class uses its own peculiar methods of struggle to obtain more dollars. The dollar, so to speak, organizes the class struggle in an orderly manner. If the dollar ceases to have this function, as would be the case under complete price-fixing, a substitute must be found; otherwise, the existing society disintegrates. The only substitute that can be found under existing conditions is the armed might of the state. <em>Soldiers with bayonets and policemen with clubs and revolvers, backed up by the courts and the prisons, will enforce the price-fixing decrees.</em></p>
<p>To be sure, a workers’ state, that is, a state organized and controlled by the majority of the population in their own interests, could take care of production and price problems through the method of democratic economic planning. This is not in any way to be confused or identified with the barbaric, bureaucratic and totalitarian planning that exists in Stalin’s Russia. In fact, a genuine workers’ state in this country of virtually unlimited natural resources and a very highly developed technique of production based on a high productivity of labor, could probably maintain a war economy, necessitated by the requirements of the struggle against Hitlerisrn, without any decline in the standard of living whatsoever. In fact, a proper utilization of our immense resources, both human and natural, would probably witness a rising standard of living – even under a war economy.<br>
</p>
<h4>Big Business Defends Its Interests</h4>
<p class="fst">Unfortunately we do not have a workers’ state at present. Mr. Roosevelt heads a capitalist state. Under a capitalist state, the whole program becomes transformed into one of getting the prices in which you are interested favorably fixed in relation to all other prices. This explains the heavy influx of dollar-a-year big business men into various governmental posts in Washington. “If there must be price-fixing,” say the capitalists, “we’ll do it. Then we can be sure that there will be no interference with our profits.” Senator Bankhead, a representative of the big cotton plantation owners, is reported in the press as having challenged any move toward pegging (fixing) prices of agricultural commodities unless controls were fixed all along the line on wages, salaries, rents and industrial commodities. He also warned that any effort to put a maximum price on cotton, either by direct action on the staple or by fixing a price on manufactured cotton goods which would operate to depress the price of raw cotton below 20 cents a pound, would meet “strenuous and determined opposition from the friends of the farmers in and out of Congress.” The price of cotton, it must be added, is at present about 16 cents a pound, having risen about 6 cents since the beginning of the year. This represents the highest price raw cotton has reached in a decade.</p>
<p>Thus we see the representatives of capitalists and farmers descending on Washington in droves to defend their respective interests in this all-important matter of price-fixing. What are the leaders of the trade unions doing about the matter? So far, except for some pious declarations by Murray and Green against control of wages, the working class has been absolutely silent, as if it were totally unaware that the problem exists NOW.<br>
</p>
<h4>What the Workers Must Do</h4>
<p class="fst">The workers cannot take the position that there should be no control of prices, for the workers suffer more than any other section of society from inflation. And yet, of course, the workers would be the real losers from a totalitarian development. This does not mean that the situation is absolutely hopeless. Certain actions can and must be taken First of all, the workers must be educated to understand what is involved in this question of price-fixing. This is primarily the responsibility of the trade unions. They, if they are to do this educational job properly, must immediately get away from the absolutely fatal notion that a totalitarian system developed as a result of the necessity to fix prices will disappear once the war is over. This is 1941 – not 1918. The war is clearly going to be a long and costly one. Even if American imperialism emerges the victor, it will be far too weak to give up the totalitarian controls instituted during wartime.</p>
<p>Secondly, the workers must send their delegations to Washington to defend their own interests in regard to the fixing of prices. The trade unions clearly have the power to do this, provided they have the will.</p>
<p><em>Thirdly, and most important, the workers must insist on workers’ control of price-fixing. After all the workers represent the overwhelming majority of the population. Why shouldn’t prices be fixed in the interests of this vast majority, rather than (as is now the case) in the interests of a small, exploiting minority? Big business men will never fix prices in the interests of the workers. The democratic method would have the majority fix the prices – since they must be fixed – in the interests of the majority. This could be done very simply in the case of commodity prices, by having a price control board for each commodity or each group of related commodities on which the majority represents the workers. Again, for the fixing of basic prices for wages, rent and interest, there must be a general price control board firmly controlled by the workers. Only in this way can the workers have any guarantee at all that the twin evils of inflation and totalitarianism will be avoided. Of course, in the long run, as I have tried to make clear, the real solution of the problem calls for an end to capitalism and the establishment of a workers’ state as a necessary transitional stop on the road to socialism.</em></p>
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Frank Demby
For Workers’ Control of Price-Fixing
What to Do About the Rise in Prices
(August 1941)
From Labor Action, Vol. 5 No. 31, 4 August 1941, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The developing war economy in the United Slates has finally reached the point where every person in the country will feel iis effects in the most direct and immediate sense. It has been announced from Washington that price-fixing legislation will be introduced into Congress this week. The immediate reason for this drastic step is that the inflationary movement of prices is threatening to get out of hand. This would cause a tremendous increase in the cost of the armaments program, as well as a serious weakening of civilian morale. The experiences in World War I and since have taught the capitalists that rapidly rising prices must be prevented at all costs, if they would preserve their system from social disintegration. Labor Action has repeatedly pointed out that the capitalists are face to face with a dilemma that free, competitive capitalism cannot solve. The spending of billions and billions of dollars for war purposes means either inflation or totalitarianism. There is no escape from this dilemma under capitalism. Leon Henderson, director of the Office of Price Administration and Civilian Supply, has already admitted that voluntary control of prices is breaking down. Many corporations simply refuse to abide by the price ceilings, that is, the maximum prices set by Mr. Henderson. Others are getting around the price ceilings by producing articles of inferior quality – without, of course, advertising this fact to the consumer or to the government. Still others are developing a very refined illegal or bootleg trade, especially in certain key raw materials. All of ‘this’ is perfectly natural and inevitable under a capitalism where the urge to obtain profits takes precedence over everything else.
More Money to Buy Less Goods
If a manufacturer finds that his costs have increased due to (1) increased wages as a result of labor’s drive to improve its standard of living or simply to maintain living conditions at existing levels (2) higher prices for raw materials, as a result of higher shipping costs imposed by the war and higher prices for agricultural raw materials as a result of the government’s farm program, or (3) higher taxes, as a result’ of the government’s attempt to defray somewhat the cost of the war program, he will not voluntarily content himself with a reduced profit. He is in business to make the maximum profit possible and his concept of patriotism gives him the moral right, and even the obligation, to pursue his profit-making instincts to the utmost. Moreover, if he should attempt to curb them, he will soon find himself swallowed up by a bigger capitalist. Consequently, he raises the prices of the things he produces and sells.
This development is clearly shown by the fact that wholesale prices have risen almost 50 per cent since the outbreak of World War II and by the current rise in retail prices which is rapidly threatening to equal that of wholesale prices. This development is absolutely irresistible as the war economy expands in size and scope. For it has meant a tremendous increase in available consumer purchasing power, accompanied at the same time by a considerable decrease in the production of consumer goods. The shift from consumer goods industries to war industries is only beginning to get under way in this country, but it will now proceed at a very rapid rate. Putting the matter in its most simple terms, more people have more money with which to buy less and less goods. Prices must go up under such circumstances unless controlled by the government.
Alternatives Under Capitalism
Government control of prices, however, is not a simple matter – as the British and American governments have already learned. If done on a piecemeal basis, it is incomplete and only serves to create antagonisms and dissatisfaction without preventing inflation.
“It is realized by the Administration,” says a dispatch to the New York Times of July 18, “that unless prices are strictly controlled or consumer buying is kept down by some other means, inflation can scarcely be averted. A study of German methods of price control, recently published by the Commerce Department indicated, however, that control of prices is not effective unless (1) all prices are controlled, (2) wages, rents and dividends are also controlled.”
Here, the capitalists run squarely into the second horn of the dilemma. If prices are not controlled, there will be inflation, with all its catastrophic consequences. On the other hand, if prices are controlled, it must be a strict and complete control in order to be effective. Half-way measures will not suffice, as the experience of England clearly shows. The only way that inflation can be prevented under a capitalist war economy is to follow the German method. Rigid control of all prices means complete government control of the entire economy. The government will decide how much profit the capitalist will make, how much rent the landlord should receive, how much wages the worker should get. The government, in effect, will decide where industries are to be built, whose capital and how much of it will be used to build the necessary war industries, what workers will work and where they will work, and under what conditions they will work. Such a complete ordering of ‘people’s lives, by a government, in this era of capitalist decay, means totalitarianism – no matter how pleasantly it may he dressed up by clever propagandists. In other words, the only way that inflation can be prevented under capitalism is through the adoption of fascist, totalitarian methods.
This is already understood by certain sections of the population. It will soon be understood by everyone with eyes to see, for price-fixing means arbitrary control of the dollar. Arbitrary control of the dollar means an attempt to freeze the class struggle. At present, each class in society and each group within each class uses its own peculiar methods of struggle to obtain more dollars. The dollar, so to speak, organizes the class struggle in an orderly manner. If the dollar ceases to have this function, as would be the case under complete price-fixing, a substitute must be found; otherwise, the existing society disintegrates. The only substitute that can be found under existing conditions is the armed might of the state. Soldiers with bayonets and policemen with clubs and revolvers, backed up by the courts and the prisons, will enforce the price-fixing decrees.
To be sure, a workers’ state, that is, a state organized and controlled by the majority of the population in their own interests, could take care of production and price problems through the method of democratic economic planning. This is not in any way to be confused or identified with the barbaric, bureaucratic and totalitarian planning that exists in Stalin’s Russia. In fact, a genuine workers’ state in this country of virtually unlimited natural resources and a very highly developed technique of production based on a high productivity of labor, could probably maintain a war economy, necessitated by the requirements of the struggle against Hitlerisrn, without any decline in the standard of living whatsoever. In fact, a proper utilization of our immense resources, both human and natural, would probably witness a rising standard of living – even under a war economy.
Big Business Defends Its Interests
Unfortunately we do not have a workers’ state at present. Mr. Roosevelt heads a capitalist state. Under a capitalist state, the whole program becomes transformed into one of getting the prices in which you are interested favorably fixed in relation to all other prices. This explains the heavy influx of dollar-a-year big business men into various governmental posts in Washington. “If there must be price-fixing,” say the capitalists, “we’ll do it. Then we can be sure that there will be no interference with our profits.” Senator Bankhead, a representative of the big cotton plantation owners, is reported in the press as having challenged any move toward pegging (fixing) prices of agricultural commodities unless controls were fixed all along the line on wages, salaries, rents and industrial commodities. He also warned that any effort to put a maximum price on cotton, either by direct action on the staple or by fixing a price on manufactured cotton goods which would operate to depress the price of raw cotton below 20 cents a pound, would meet “strenuous and determined opposition from the friends of the farmers in and out of Congress.” The price of cotton, it must be added, is at present about 16 cents a pound, having risen about 6 cents since the beginning of the year. This represents the highest price raw cotton has reached in a decade.
Thus we see the representatives of capitalists and farmers descending on Washington in droves to defend their respective interests in this all-important matter of price-fixing. What are the leaders of the trade unions doing about the matter? So far, except for some pious declarations by Murray and Green against control of wages, the working class has been absolutely silent, as if it were totally unaware that the problem exists NOW.
What the Workers Must Do
The workers cannot take the position that there should be no control of prices, for the workers suffer more than any other section of society from inflation. And yet, of course, the workers would be the real losers from a totalitarian development. This does not mean that the situation is absolutely hopeless. Certain actions can and must be taken First of all, the workers must be educated to understand what is involved in this question of price-fixing. This is primarily the responsibility of the trade unions. They, if they are to do this educational job properly, must immediately get away from the absolutely fatal notion that a totalitarian system developed as a result of the necessity to fix prices will disappear once the war is over. This is 1941 – not 1918. The war is clearly going to be a long and costly one. Even if American imperialism emerges the victor, it will be far too weak to give up the totalitarian controls instituted during wartime.
Secondly, the workers must send their delegations to Washington to defend their own interests in regard to the fixing of prices. The trade unions clearly have the power to do this, provided they have the will.
Thirdly, and most important, the workers must insist on workers’ control of price-fixing. After all the workers represent the overwhelming majority of the population. Why shouldn’t prices be fixed in the interests of this vast majority, rather than (as is now the case) in the interests of a small, exploiting minority? Big business men will never fix prices in the interests of the workers. The democratic method would have the majority fix the prices – since they must be fixed – in the interests of the majority. This could be done very simply in the case of commodity prices, by having a price control board for each commodity or each group of related commodities on which the majority represents the workers. Again, for the fixing of basic prices for wages, rent and interest, there must be a general price control board firmly controlled by the workers. Only in this way can the workers have any guarantee at all that the twin evils of inflation and totalitarianism will be avoided. Of course, in the long run, as I have tried to make clear, the real solution of the problem calls for an end to capitalism and the establishment of a workers’ state as a necessary transitional stop on the road to socialism.
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<h2>Frank Demby</h2>
<h1>Stalin Supplies the Hitler War Machine</h1>
<h4>The First of a Series of Articles on Russia</h4>
<h3>(January 1941)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_03" target="new">Vol. 5 No. 3</a>, 20 January 1941, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<tbody><tr>
<td>
<p class="c"><strong><small>The recent Russian-German trade agreement once again focuses attention on what has been happening within the Soviet Union. The following is the first of a series of articles by Frank Demby on developments within the USSR since the outbreak of World War II, with special emphasis on the economic situation. – <em>Ed.</em></small></strong></p>
</td>
</tr>
</tbody></table>
<h4>*</h4>
<p class="fst">Many, indeed, were the speculations concerning the trip of Soviet Premier-Foreign Commissar Vyascheslaff M. Molotoff to Berlin last November and his conversations with Hitler and other high Nazi dignitaries.’The first visible result has been the signing of an “enlarged economic agreement” in Moscow on Jan. 10, 1941, by Molotoff tor the USSR and Ambassador Schulenburg for Germany. This treaty includes a settlement of the Russian-German boundary and an agreement on property claims in the former Baltic states. The treaty is subject to ratification in Berlin in the shortest possible time.</p>
<p class="quoteb">“The new agreement is based on the Soviet-German economic agreement of Feb. 11, 1940, and constitutes a further step in execution of the economic program outlined by the two governments in 1939. The agreement regulates the trade turnover between the USSR and Germany until Aug. 1, 1942. It provides for an amount of mutual deliveries <em>considerably exceeding the level of the first year of operation of the agreement.</em></p>
<p class="quote">“The USSR delivers to Germany <em>industrial raw materials, oil products</em> and foodstuffs, especially cereals; Germany delivers to the USSR industrial equipment.</p>
<p class="quote">“The negotiations passed in a <em>spirit of mutual understanding and confidence</em> conforming to the friendly relations existing between the USSR and Germany. <em>All economic problems</em>, including those that arose in connection with the incorporation of new territories into the USSR, <em>were solved in conformity with the interests of both countries</em>.” (Quoted from the text of the agreement, released by Tass. and published in the <strong>N.Y. Times</strong> of Jan. 11, 1941 – my emphasis – <em>FD</em>)<br>
</p>
<h4>Closer Relations</h4>
<p class="fst">In an era where economic problems are steadily multiplying, it is very refreshing to see that two countries have solved “all economic problems.” The new Soviet-German accords, official bombast and vagueness aside, do, however, indicate steadily closer economic relations between Russia and Germany. How much actual material was delivered by the Soviet Union to Germany during the ppst year is impossible to determine. But there are some indications given of the size of the trade expected during the coming year.</p>
<p class="quoteb">“The Soviet Union is said to have agreed to furnish Germany with 2.500,000 tons of grain and fodder, barley and 1,500,000 tons of oil in exchange for German finished goods.” (Percival Knauth. from Berlin, in <strong>N.Y. Times</strong> of’ Jan. 11)</p>
<p class="fst">These figures, passed through the Berlin censor, may merely reflect German expectations. On the other hand, there is just as good a reason for believing that they give a good indication of the size of German-Russian trade relations. If the entire 2,500,000 tons of grain are considered as wheat, this would be the equivalent of about 92,000,000 American bushels. This is no insignificant sum, nor is the figure given for oil one to be ignored in estimating Russia’s current role as a supplier of the German War Machine. According to German sources, the amounts involved will “run into billions of marks.”<br>
</p>
<h4>Acts as Broker</h4>
<p class="fst">A further indication of Russia’s role may be seen from the fact that Russia has recently emerged as a fairly large buyer in the American market, and is reported as trying to negotiate trade treaties in many other countries, notably China, Argentina and other South American countries. During 1940, according to the U.S. Department of Commerce, Russia bought approximately $100,000,000 worth of goods here – about double the 1939 figure. This very substantial rise in American exports to Russia has virtually all occurred since the outbreak of the war, and has given rise to the suspicion that most of these imports are being shipped through Siberia to Germany, or are being used to release equivalent amounts of Russian commodities for export to Germany.</p>
<p>This suspicion is reinforced when one considers the particular materials that Russia is importing from the U.S. Russian foreign trade policy, ever since the institution of the first five-year plan in 1928 has been aimed at importing machinery, parts, machine tools and similar technical equipment – for the purpose of furthering the industrialization of Russia. It is very rare that raw materials are imported. On the contrary, Russia has paid for her technical imports with gold and raw materials. Hence, the imports of 139,591 bales of cotton (since Aug. 1, 1940), of 108,955.000 pounds of copper (in 1940), of more than 1,000,000 barrels of oil (which figure is steadily increasing) – all point to the conclusion that Stalin, willingly or unwillingly, has become an important part of the German war machine.</p>
<p>According to C. Brooks Peters, from Berlin, in the <strong>N.Y. Times</strong> of Jan. 13, “The Russians have agreed to facilitate the transit of German products to the Far East, as well as lighten the tasks of commerce between Iran and Afghanistan and the Reich.” Also, “The treaty is said to stipulate that Russia will deliver to the Reich goods whose origin is in a third country.” This undoubtedly is part of the “fresh proof,” of which <strong>Pravda</strong> speaks, “of the durability of good-neighborly relations between the two greatest European states.” Stalin has not only agreed to act as a supplier of vital materials for the German war machine, but, in addition, he is undertaking the role of German broker!<br>
</p>
<h4>Depends on Hitler</h4>
<p class="fst">The Germans claim “the reciprocal agreement was reached in favor of the Reich.” This claim is reinforced by the German admission that their deliveries of industrial equipment during the life of the previous treaty were behind schedule. And yet, Stalin contracts for “deliveries considerably above the level of the first year.” Why? The answer lies in two factors that are becoming increasingly important in understand the evolution of the Soviet Russian economy.</p>
<p>The first factor is one of geography. Or, as Gedye, writing from Turkey in the <strong>N.Y. Times</strong> of Jan. 12 puts it: “Thus the old fear of Germany’s mechanized forces still holds Soviet Russia in check – and this fear has, <em>it is known, led her to speed up deliveries recently, deliveries that the Nazis need</em>.” (My emphasis – <em>FD</em>) The other factor may prove even more important in trying to estimate the direction in which Soviet economy is now moving.</p>
<p>Russia’s fundamental economic weaknesses, the virtual breakdown of her system of economic planning, the introduction of peonage labor decrees, visible faults in the structure of collective farming, all force Stalin to depend more and more on German industry and German technicians. German experts “are now acquainted with the special problems involved,” and thus may be expected to play a steadily more important role in the Russian economy. Even if Stalin were separated by vast oceans from Hitler’s Germany, the fact remains that the economic weaknesses of Soviet Russia force him to depend more and more on Hitler. These economic weaknesses, and the direction in which they are leading, will be analyzed in subsequent articles of this series.</p>
<p class="link"> <br>
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Frank Demby
Stalin Supplies the Hitler War Machine
The First of a Series of Articles on Russia
(January 1941)
From Labor Action, Vol. 5 No. 3, 20 January 1941, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The recent Russian-German trade agreement once again focuses attention on what has been happening within the Soviet Union. The following is the first of a series of articles by Frank Demby on developments within the USSR since the outbreak of World War II, with special emphasis on the economic situation. – Ed.
*
Many, indeed, were the speculations concerning the trip of Soviet Premier-Foreign Commissar Vyascheslaff M. Molotoff to Berlin last November and his conversations with Hitler and other high Nazi dignitaries.’The first visible result has been the signing of an “enlarged economic agreement” in Moscow on Jan. 10, 1941, by Molotoff tor the USSR and Ambassador Schulenburg for Germany. This treaty includes a settlement of the Russian-German boundary and an agreement on property claims in the former Baltic states. The treaty is subject to ratification in Berlin in the shortest possible time.
“The new agreement is based on the Soviet-German economic agreement of Feb. 11, 1940, and constitutes a further step in execution of the economic program outlined by the two governments in 1939. The agreement regulates the trade turnover between the USSR and Germany until Aug. 1, 1942. It provides for an amount of mutual deliveries considerably exceeding the level of the first year of operation of the agreement.
“The USSR delivers to Germany industrial raw materials, oil products and foodstuffs, especially cereals; Germany delivers to the USSR industrial equipment.
“The negotiations passed in a spirit of mutual understanding and confidence conforming to the friendly relations existing between the USSR and Germany. All economic problems, including those that arose in connection with the incorporation of new territories into the USSR, were solved in conformity with the interests of both countries.” (Quoted from the text of the agreement, released by Tass. and published in the N.Y. Times of Jan. 11, 1941 – my emphasis – FD)
Closer Relations
In an era where economic problems are steadily multiplying, it is very refreshing to see that two countries have solved “all economic problems.” The new Soviet-German accords, official bombast and vagueness aside, do, however, indicate steadily closer economic relations between Russia and Germany. How much actual material was delivered by the Soviet Union to Germany during the ppst year is impossible to determine. But there are some indications given of the size of the trade expected during the coming year.
“The Soviet Union is said to have agreed to furnish Germany with 2.500,000 tons of grain and fodder, barley and 1,500,000 tons of oil in exchange for German finished goods.” (Percival Knauth. from Berlin, in N.Y. Times of’ Jan. 11)
These figures, passed through the Berlin censor, may merely reflect German expectations. On the other hand, there is just as good a reason for believing that they give a good indication of the size of German-Russian trade relations. If the entire 2,500,000 tons of grain are considered as wheat, this would be the equivalent of about 92,000,000 American bushels. This is no insignificant sum, nor is the figure given for oil one to be ignored in estimating Russia’s current role as a supplier of the German War Machine. According to German sources, the amounts involved will “run into billions of marks.”
Acts as Broker
A further indication of Russia’s role may be seen from the fact that Russia has recently emerged as a fairly large buyer in the American market, and is reported as trying to negotiate trade treaties in many other countries, notably China, Argentina and other South American countries. During 1940, according to the U.S. Department of Commerce, Russia bought approximately $100,000,000 worth of goods here – about double the 1939 figure. This very substantial rise in American exports to Russia has virtually all occurred since the outbreak of the war, and has given rise to the suspicion that most of these imports are being shipped through Siberia to Germany, or are being used to release equivalent amounts of Russian commodities for export to Germany.
This suspicion is reinforced when one considers the particular materials that Russia is importing from the U.S. Russian foreign trade policy, ever since the institution of the first five-year plan in 1928 has been aimed at importing machinery, parts, machine tools and similar technical equipment – for the purpose of furthering the industrialization of Russia. It is very rare that raw materials are imported. On the contrary, Russia has paid for her technical imports with gold and raw materials. Hence, the imports of 139,591 bales of cotton (since Aug. 1, 1940), of 108,955.000 pounds of copper (in 1940), of more than 1,000,000 barrels of oil (which figure is steadily increasing) – all point to the conclusion that Stalin, willingly or unwillingly, has become an important part of the German war machine.
According to C. Brooks Peters, from Berlin, in the N.Y. Times of Jan. 13, “The Russians have agreed to facilitate the transit of German products to the Far East, as well as lighten the tasks of commerce between Iran and Afghanistan and the Reich.” Also, “The treaty is said to stipulate that Russia will deliver to the Reich goods whose origin is in a third country.” This undoubtedly is part of the “fresh proof,” of which Pravda speaks, “of the durability of good-neighborly relations between the two greatest European states.” Stalin has not only agreed to act as a supplier of vital materials for the German war machine, but, in addition, he is undertaking the role of German broker!
Depends on Hitler
The Germans claim “the reciprocal agreement was reached in favor of the Reich.” This claim is reinforced by the German admission that their deliveries of industrial equipment during the life of the previous treaty were behind schedule. And yet, Stalin contracts for “deliveries considerably above the level of the first year.” Why? The answer lies in two factors that are becoming increasingly important in understand the evolution of the Soviet Russian economy.
The first factor is one of geography. Or, as Gedye, writing from Turkey in the N.Y. Times of Jan. 12 puts it: “Thus the old fear of Germany’s mechanized forces still holds Soviet Russia in check – and this fear has, it is known, led her to speed up deliveries recently, deliveries that the Nazis need.” (My emphasis – FD) The other factor may prove even more important in trying to estimate the direction in which Soviet economy is now moving.
Russia’s fundamental economic weaknesses, the virtual breakdown of her system of economic planning, the introduction of peonage labor decrees, visible faults in the structure of collective farming, all force Stalin to depend more and more on German industry and German technicians. German experts “are now acquainted with the special problems involved,” and thus may be expected to play a steadily more important role in the Russian economy. Even if Stalin were separated by vast oceans from Hitler’s Germany, the fact remains that the economic weaknesses of Soviet Russia force him to depend more and more on Hitler. These economic weaknesses, and the direction in which they are leading, will be analyzed in subsequent articles of this series.
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<h2 class="western">Frank Demby</h2>
<h1>Aircraft and Finance Capital</h1>
<h3>(June 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue2.htm#ni41_06" target="new">Vol. VII No. 5 (Whole No. 54)</a>, June 1941, pp. 103–6.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">THE KEY INDUSTRY of the war, fast becoming the leading industry of the country, is aircraft. Moreover, its strategic rôle and importance are not confined to war. Its potentialities for peacetime transportation and commerce may be somewhat obscured at present due to the destructive capacities of aviation as revealed by the blitzkrieg, but aircraft is clearly marked as <em>the</em> industry of the future. By August 1 of this year, more than half a million workers will be employed in the industry. The industry has a backlog of more than $4 billion. Its expansion has been absolutely phenomenal, more so than any other industry in the history of American capitalism.</p>
<p>Much discussion has filled the press about the President’s goal of 50,000 planes a year and why the United States is so far from filling it at present. More pertinent, however, would be the query: Why is it that the United States, whose inventive genius produced this remarkable invention at the turn of the century, should now lag way behind in the production of airplanes? The answer to this important question is to be found in the history of aircraft, an obscure story but one which is replete with scandals, greed, intrigue, financial manipulation, patent pools, fabulous profits, government subsidies, and monopoly control.<br>
</p>
<h4 class="western">How the Industry Began</h4>
<p class="fst">In spite of the fact that The Hague Peace Conference had unanimously voted to outlaw the airplane as a weapon of warfare, the bourgeoisie was so entranced with the military potentialities of the airplane that all nations engaged in research and experimentation with this end in view. But from 1909–1913, while the United States spent $435,000 on airplanes, with the result that at the outbreak of World War I, the Army had 28 planes on hand; Germany had spent $28,000,000 during the same period and had 4,000 planes on hand. Thus, the birth of the aircraft industry in the United States coincided with the outbreak of World War I, the period when far-reaching monopolistic controls of virtually all American industry were being developed.</p>
<p>The pioneers of the industry were the original inventors and their successors. As soon as the Allies began to place orders for airplanes in the United States, and the prospect of tremendous profits opened up. Wall Sreet speculators and automobile manufacturers began to take an interest in the production of airplanes. A patent pool was formed under the aegis of the Manufacturers Aircraft Association, the first trade association in the aircraft industry. The association collected a blanket royalty fee of $200 per airplane and apportioned the patent fees among the basic patent owners, the Curtiss Aeroplane & Motor Co. and the Wright-Martin Aircraft Co. These two companies collected over $2,000,000 each from patent fee alone. The MAA secured the ear of official Washington through the persons of Howard E. Coffin, vice-president of Hudson Motor Co. (one of the automobile companies directly interested in the manufacture of airplanes), who became chairman of the Aircraft Production Board, and Edward A. Deeds, an individual with an extremely notorious record, who was one of the leading people in the organization of the Dayton Wright Airplane Co. Through their efforts over one billion dollars was appropriated by Congress to supply the U.S. Army with airplanes. At least 29,000 planes were expected as a result of this huge appropriation. However, only 196 actually saw service in Europe!</p>
<p>The Manufacturers Aircraft Association was attacked as a trust and a terrific scandal broke in the newspapers and finally landed in the halls of Congress. President Wilson felt compelled to appoint a committee of investigation headed by Snowden H. Marshall. This committee brought in a verdict of “no truth in the charges.” Instead of subsiding, however, the stench began to rise. Deeds was court-martialled; but, through the intervention of Secretary of War Newton D. Baker, Deeds, was acquitted and the reputation of the industry was saved. Even this did not end the matter, as after the Armistice Wilson felt constrained to appoint another committee to investigate the aircraft industry – this time headed by Justice Hughes. This committee “found nothing to criticize” in the conduct of the aircraft industry.<br>
</p>
<h4 class="western">How the Profits Grew</h4>
<p class="fst">The end of the war also saw the end of the huge profits reaped by the insiders. The scandals of the war period and the crashes of army fliers resulted in loss of confidence on the part of the public, especially the investing public. The aviation industry remained in a state of doldrums until Lindbergh’s historic flight of May 20, 1927, which fortunately coincided with the beginning of the stock market boom. Public interest awakened; confidence in the future of aviation grew and aviation stocks began to be sold. By the end of 1929 the public had swallowed over a billion dollars in aviation stocks. By 1932 the value of these stocks had sunk to a low of fifty million dollars! Some people undoubtedly lost a lot of money, but again the insiders reaped huge fortunes.</p>
<p>For example, Charles W. Deeds, son of Albert A. Deeds invested $40 in 1926. At the 1929 high this was worth $5,550,000. F. B. Rentschler (now chairman of of the board of United Aircraft), brother of the future president of the National City Bank of New York, probably made the biggest killing of all. His investment of $253 in Pratt & Whitney stock was worth a cool $35,000,000 in 1929. Pratt & Whitney Corp., organized after the war with a capital of $1,000 made, according to the Nye Munitions Investigating Committee, a profit of over 1,300,000 per cent in ten years! During all this time, of course, the actual production of airplanes was infinitesmal; other countries had forged way ahead of the U.S.</p>
<p>By 1929, through a combination of mergers, stock watering, holding company setups, and general financial chicanery, finance capital had achieved complete control of the aircraft industry. The 150 companies manufacturing aircraft were dominated and controlled by the following five companies: Curtiss Aeroplane & Manufacturing, United Aircraft & Transportation, Wright Aeronautical, Western Air Express and Aviation Corporation. During the past decade, more than half the companies have been eliminated. The remainder are dominated by three powerful, well-integrated finance capital units. They are, in order of their size (based on total assets at the end of 1940): Curtiss-Wright, $202,000,000; United Aircraft, $132,000,000; and North American Aviation, $54,000,000.<br>
</p>
<h4 class="western">Interlocking Relations</h4>
<p class="fst">Monopoly’s baby has come of age. Each of the three leading systems is a top-holding company for an entire system, two of them, Curtiss-Wright and North American, representing General Motors – that is, the Morgan-duPont finance capital interests – and the other, United Aircraft, representing the National City Bank group. Curtiss-Wright, formed as a result of a merger between Curtiss Aeroplane & Manufacturing and Wright Aeronautical in 1929, now claims to be the world’s largest group, with 29 subsidiaries and 18 affiliated companies. Indirectly controlled by General Motors, Curtiss-Wight has a maze of ties with virtually all sections of American industry through the more influential members of its board of directors. The chairman of the board, George Armsby, adorns the directorates of a mere 22 corporations, the more significant of those outside of aircraft being Vickers, Tide Water Associated Oil, Standard Gas & Electric, Petroleum Corporation, American Maracaibo, California Packing, and Loew’s. Edgar S. Bloom is a very important member of its board. His 10 directorships help to establish cordial relations with Manufacturers Trust and Western Electric. In passing, it should be noted that Bloom is the director of purchases of the British Purchasing Commission, making him a rather useful person for an aircraft company to have on its board. Other members establish connections with Sperry Gyroscope, Ford Instrument, Douglas Aircraft, Transcontinental Air Transport, Empire Trust, Fisk Rubber, Hayden, Stone & Co., Girard Trust, Ken-necott Copper, Mack Truck and Adams Express. Manufacturers Trust, one of the Morgan banks, is represented through several men, especially the president of Curtiss-Wright, G.W. Vaughn.<br>
</p>
<h4 class="western">Finance Capital Dominates</h4>
<p class="fst">United Aircraft acquires most of its importance through its control of Pratt & Whitney and Pan American Airways, although Hamilton Standard Propellers and Vought-Sikorsky are becoming increasingly important. It work is spread out among 650 vendors, scattered over twenty states. Its list of directors is not quite as imposing as Curtiss-Wright, but its key men, Rentschler, Eugene R. Wilson, who is president, Morgan B. Brainard, Byron C. Foy, William B. Mayo, provide links with National City Bank, Dime Savings Bank, Chrysler, some smaller automobile companies, New York, New Haven & Hartford Railroad and other transportation interests, Swift & Co., and the Cleveland-Cliffs Iron Co.</p>
<p>The most significant group, however, is probably the one headed by North American Aviation, for it was organized and is directly controlled by General Motors. Directly under its control are Ford Instrument, Sperry Bendix and Douglas. It controls Western Air Express and has great influence in Curtiss-Wright. Its strategic importance to General Motors can be seen merely from the fact that one of its directors is Henry B. duPont. The chairman of the board is Ernest R. Breech, a member of the board of General Motors and one of its key figures in the aircraft industry. It is also linked with International Nickel.</p>
<p>The other companies which serve to round out the picture of concentration in a few hands are the Aviation Corporation, which controls Vultee and American Airways, and is bossed by Victor Emanuel, one of the leading lights in the Rockefeller group. Bell and Lockheed appear to be independent corporations, but are, in reality, completely controlled by General Motors through one of its smaller holding companies, National Aviation. Consolidated is clearly controlled by Lehman Brothers. Its board of directors is loaded down with Lehman men, including Robert Lehman. The two other important companies, Martin and Boeing, have not escaped the long arm of capital, either. On Martin’s board of directors appear John W. Castles, a partner in Smith-Barney & Co., and John W. Hanes, one of the most influential of Morgan representatives. Boeing apparently does not have any direct links with the better-known sections of finance capital, but is controlled by local Pacific Coast representatives.</p>
<p>American finance capital thus enters World War II with a firm grip on the aircraft industry. In 1938, 95 per cent of the total value of the industry’s product was produced by the 13 leading companies. In 1940, 90 per cent of the greatly increased production was produced by the eight leading companies. With the aircraft industry tied up with virtually every other American industry (technically, this is necessary as aircraft represents the synthesis of all industry), with its dollar-a-year representatives in Washington performing meritorious services comparable to those of Coffin and Deeds in World War I, with the excess profits tax removing the ceiling on profits from the aircraft industry, with an escalator clause on prices in all contracts with the U.S. government, the latter, in effect, paying the cost of plant expansions, and with England and the Allies paying higher prices and cash in advance for, in many cases, inferior planes, it is no wonder that the industry is having a field day. World War II is presenting the industry with even larger profits than in the case of World War I. A scandal is in the making, which may not be concealed even by the secrecy which surrounds the industry today, and which, if it breaks, will dwarf that of the last war.<br>
</p>
<h4 class="western">Phenomenal Profits the Rule</h4>
<p class="fst">The financial pages of the newspapers daily reveal how the aircraft industry is utilizing the tremendous subsidies and favorable contracts which it is receiving to demonstrate that “patriotism” pays off in hard cash. The following table (taken from the <strong>New Republic</strong>, Feb. 17, 1941) shows the annual rate of return on net worth of selected aircraft companies (in per cent):</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<td rowspan="2">
<p class="smc"> </p>
</td>
<td rowspan="7">
<p class="smc"> </p>
</td>
<td>
<p class="smc"> </p>
</td>
<td rowspan="7">
<p class="smc"> </p>
</td>
<th colspan="7">
<p class="smc">1940</p>
</th>
</tr>
<tr valign="bottom">
<th>
<p class="smc">1939</p>
</th>
<td>
<p class="smc"><em>First<br>
Quarter</em></p>
</td>
<td rowspan="6">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Second<br>
Quarter</em></p>
</td>
<td rowspan="6">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Third<br>
Quarter</em></p>
</td>
<td rowspan="6">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Total<br>
9 Months</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Curtiss-Wright</p>
</td>
<td>
<p class="smc">15</p>
</td>
<td>
<p class="smc">28</p>
</td>
<td>
<p class="smc">44</p>
</td>
<td>
<p class="smc"> 24</p>
</td>
<td>
<p class="smc">32</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Douglas Aircraft</p>
</td>
<td>
<p class="smc">21</p>
</td>
<td>
<p class="smc">52</p>
</td>
<td>
<p class="smc">46</p>
</td>
<td>
<p class="smc">113</p>
</td>
<td>
<p class="smc">70</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Martin, Glenn</p>
</td>
<td>
<p class="smc">23</p>
</td>
<td>
<p class="smc">48</p>
</td>
<td>
<p class="smc">47</p>
</td>
<td>
<p class="smc"> 11</p>
</td>
<td>
<p class="smc">36</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">North American</p>
</td>
<td>
<p class="smc">74</p>
</td>
<td>
<p class="smc">22</p>
</td>
<td>
<p class="smc">77</p>
</td>
<td>
<p class="smc"> 41</p>
</td>
<td>
<p class="smc">47</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">United Aircraft</p>
</td>
<td>
<p class="smc">29</p>
</td>
<td>
<p class="smc">29</p>
</td>
<td>
<p class="smc">47</p>
</td>
<td>
<p class="smc"> 37</p>
</td>
<td>
<p class="smc">38</p>
</td>
</tr>
</tbody></table>
<p class="fst">1940, as is well known, was a banner year for American capitalists. The aircraft industry, however, made the rest of American industry look as if it was in a state of depression. According to a report in the <strong>New York Times</strong> of April 27, 1941: “Twenty-four makers of aircraft last year earned $69,866,405, more than double the profits shown in 1939, nearly three times 1938 results and more than five times their earnings in 1937. Each of these years set a new high record for the industry and <em>further peaks are likely under the national</em> defense effort.” (Italics mine – <em>FD</em>) Moreover, 14 of these companies made slightly more than $60 million of the total, or more than 85 per cent of the total profit in aircraft went to these 14 companies. And the four largest companies made a total of $47 million, or over 67 per cent of the total profit.</p>
<p>Many companies showed profits considerably above the 100 per cent increase that the industry as a whole shows over 1939. Two of the larger companies and two of the smaller companies in this category are:</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr valign="top">
<td>
<p class="sm1"><em>Company</em></p>
</td>
<td rowspan="5">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>1940 Profit</em><br>
$</p>
</td>
<td rowspan="5">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>1939 Profit</em><br>
$</p>
</td>
<td rowspan="5">
<p class="smc"> </p>
</td>
<td>
<p class="smc">%<br>
<em>Increase</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Bell Aircraft</p>
</td>
<td>
<p class="smc"> 284,745</p>
</td>
<td>
<p class="smc"> 9,203</p>
</td>
<td>
<p class="smc">3,000</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Curtiss-Wright</p>
</td>
<td>
<p class="smc">15,932,000</p>
</td>
<td>
<p class="smc">5,322,000</p>
</td>
<td>
<p class="smc"> 199</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Douglas Aircraft</p>
</td>
<td>
<p class="smc">10,831,971</p>
</td>
<td>
<p class="smc">2,884,197</p>
</td>
<td>
<p class="smc"> 275</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Vultee Aircraft</p>
</td>
<td>
<p class="smc"> 374,457</p>
</td>
<td>
<p class="smc"> 25,488</p>
</td>
<td>
<p class="smc">1,370</p>
</td>
</tr>
</tbody></table>
<p class="fst">In addition, it should be pointed out that none of the figures on profits give any indication at all of the tremendous bonuses and salaries that the aircraft companies have been paying their executives. Nor, do they take into account the well-known fact that virtually all the aircraft companies have watered their stock to an unprecedented degree.</p>
<p>Perhaps the most important index of how the merchants of death profit at the expense of the workers can be seen if the rate of profit is compared with the rate of surplus value. Figuring the rate of profit on the basis of total assets (which yields the smallest percentage possible) and taking the three dominant companies as the basis for calculating the rate of profit (for the rate of profit for the industry as a whole must be larger than that shown by these three, as these have the largest investments in constant capital) we get the following picture: (From the 1940 financial statements) —</p>
<table align="center" cellpadding="3" cellspacing="3">
<tbody><tr>
<td>
<p class="sm1"><em>Company</em></p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Total Assets</em></p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Net Profit</em></p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc"><em>Rate of Profit</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Curtiss-Wright</p>
</td>
<td>
<p class="smc">$202,298,846</p>
</td>
<td>
<p class="smc">$15,932,251</p>
</td>
<td>
<p class="smc"> 8%</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">North American</p>
</td>
<td>
<p class="smc">$ 54,017,638</p>
</td>
<td>
<p class="smc">$ 7,090,336</p>
</td>
<td>
<p class="smc">13%</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">United Aircraft</p>
</td>
<td>
<p class="smc">$132,214,877</p>
</td>
<td>
<p class="smc">$13,139,983</p>
</td>
<td>
<p class="smc">10%</p>
</td>
</tr>
</tbody></table>
<p class="fst">The rate of profit for the industry as a whole is, therefore, at least 10 per cent. That this is a conservative figure is shown by the fact that the average return on sales for the industry as a whole is about 20 per cent. In other words, if the average airplane (of the important military types) is sold to the government for about $100,000 per plane, the cost per plane to the manufacturer is about $80,000 (this, of course, makes no allowance for the phony bookkeeping of the capitalists) and the net profit per plane will run around $10,000, In view of this situation, it is hardly a surprise that statistics concerning prices and costs of airplanes are considered a “military secret.”<br>
</p>
<h4 class="western">The Rate of Surplus Value</h4>
<p class="fst">While it is difficult under these circumstances to calculate the rate of surplus value, it is possible to arrive at a fair approximation, which is important in estimating the degree of exploitation of labor in the industry and in understanding how finance capital operates. Maximum estimates of the average wage per employee in th industry are given by <strong>Fortune</strong> (Mar. 1941) in its over-zealous whitewash issue of the aircraft industry is about $1,800. It is undoubtedly much lower than this as the minimum wage paid by most aircraft companies is 50¢ an hour or an annual wage for the worker and his family of $1,300. Taking the figure of $1,800 as the average wage, and assuming that the value of the constant capital transferred to the value of the finished commodity by the application of labor power is also equal to $1,800 per worker (it is certainly no larger than this), we find that the amount of surplus value produced by each worker is equal to $2,184 on the average for 1940. This is based on an estimate of $5,784 as the value of each workers’ output given by Donald Ross in his <strong>An Appraisal of Prospects for the Aircraft Industry</strong>. Dividing the amount of surplus value produced by each worker on the average by the average wage, the rate of surplus value in the aircraft industry for 1940 was over 120%, and, it must be emphasised, this is a conservative figure. The same methods show a rate of surplus value for 1939 of about 100%. Consequently, the rate of surplus value increased by, at least, 20% in 1940 as compared with 1939. No wonder profits increased phenomenally during the past year.</p>
<p>The growth in profits has paralleled the increase in employment. “Three years ago the building of aircraft required only 30,500 men – 10,500 less than the knit-underwear business. Today over 200,000 workers are on aircrafts payroll – an increase of 150,000 in two years. Estimates from the Bureau of Labor Statistics indicate that by August 1 (1941) employment will exceed 550,000 – 15 per cent larger than last year’s average employment in steel and nearly 25 per cent more than motor vehicles, the present giants. The acceleration has been tenfold in thirty months, compared to a sevenfold increase in shipbuilding durinng the four years of the last war.” (<strong>Fortune</strong>) The height of the expansion during the last war required only 175,000 workers in 1918. Today, it is estimated that by the end of 1943 when the industry expects to be producing at the rate of 50,000 planes a year, over 1,000,000 workers will be employed in the aircraft industry.<br>
</p>
<h4 class="western">Aircraft’s Labor Policy</h4>
<p class="fst">The bosses have reinforced their policy of low wages and bad housing conditions by one of the most vicious company union and anti-Negro and anti-Semitic policies of any section of American industry. When Consolidated’s company union program collapsed in Buffalo during the NRA days, the company dismantled its plant and moved to the more attractive labor climate of California. Douglas broke two strikes through the use of thugs and armed vigilantes. As long as the labor force remained small and fairly stable, the aircraft manufacturers were able to escape the strike waves of recent years. The industry was firmly in the grip of finance capital, with the single exception of Brewster, which signed a union shop contract with the CIO-UAW in 1937. Otherwise, there wasn’t a cloud on the horizon.</p>
<p>However, the expansion of the past two years brought on by the outbreak of World War II disturbed the equanimity of the aircraft manufacturers. Called on to expand production at a terrific rate, they found themselves surrounded by various monopolistic interests, such as Mellon’s aluminum monopoly, that felt they could make more profit by getting every last cent out of present capital investment rather than building new plants. Consequently, the expansion of the entire war economy of American imperialism has been much slower than military necessity dictates. After all, profits come first. Cross-patents with German capitalists, such as in the case of beryllium, also interfered with the necessary expansion. Then, the automobile industry, which is closely linked with aircraft and has somewhat of a stranglehold on it, as I have shown, feared the consequences of rapid expansion. Hence, the rejection of the Reuther plan. To be sure, the aircraft manufacturers themselves were not loathe to follow this general policy of finance capital. All the entreaties of the Government to sub-contract production of airplanes and parts have been met with stubborn resistance on the part of these “patriots.” Not even Knudsen’s plea at the end of 1940 that aircraft production was 30 per cent behind schedule moved them.</p>
<p>What really disturbed the equanimity of the aircraft manufacturers was that with the influx of workers necessitated by the expansion that was being carried on, there also came a concerted drive on the part of organized labor to organize the industry. The heart of this union drive has been the Aircraft Division of the UAW, which began serious attempts to organize about a year ago. The focal point in the UAW’s drive was Vultee. The success at Vultee, in spite of the combined opposition of the bosses and the government and a vicious newspaper campaign against the union, was the key to the 1941 strike wave and has led to several other contracts in the aircraft industry, mostly with small plants. The only dosed shop so far achieved by the CIO is with Brewster, when its original contract was renewed earlier this year. Although, there are many progressive features in this contract, which the CIO is using as a model for the industry, the union prejudiced its chances with the workers by accepting a minimum wage clause of 55 cents an hour, thus compromising one of its basic demands – a minimum wage of 75 cents an hour.</p>
<p>Alarmed by the threat of the CIO, the bosses openly invited the AFL Machinist’s union to come in and organize the workers in those plants where their company union setups proved of no avail against the CIO. With this as an opening wedge, and aided by a few strikes, the Machinists have made great headway in aircraft – already having contracts with Boeing, Lockheed and others. The Machinists probably have more contracts than the UAW, and the terms of their contracts appear to be as good. The jurisdictional situation is loaded with dynamite, but it is doubtful if the aircraft manufacturers will be able to maintain their company union policy, in spite of this serious division in organized labor’s ranks.<br>
</p>
<h4 class="western">Anti-Semitism and Jim Crow</h4>
<p class="fst">That which reveals the reactionary character of the aircraft manufacturers more than anything else, however, is their openly anti-Negro and anti-semitic policy. As <strong>Fortune</strong> delicately puts it: “The industry also has its prejudices. You will find an almost universal prejudice against Negroes – and in the West Coast plants against Jews. <em>This statement stands the test of observation</em>; you almost never see Negroes in aircraft factories nor do you see Jews in the West Coast plants except in some engineering departments. There is little concealment about the anti-Negro policy – the National Negro Congress did indeed receive a letter from Gerard Tuttle of Vultee stating that ‘<em>it is not the policy of this company to employ people other than of the Caucasian race,’ a frank statement that undoubtedly bespeaks the industry’s belief that white workers have prejudices</em> (<em>sic</em>). Anti-Jewish sentiment in Los Angeles is scrupulously denied, and if it exists, it is probably because <em>the managers suspect all Jews of being infatuated intellectually with Communism in the between-wars world</em>.” (Italics mine – <em>FD</em>)</p>
<p>The selfish, reactionary and, at times, just plain stupid policy of finance capital in aircraft only partially explains why the U.S. lags behind Germany in the production of military planes. The rest can be explained by the extreme conservatism of the Army General Staff. (For the previous history of how military short-sightedness resulted in the cashiering of General Billy Mitchell, and for a fairly good account of the general aircraft swindle prior to the outbreak of World War II, see <strong>The Aviation Business – From Kitty Hawk to Wall Street</strong> by Elsbeth E. Freudenthal). The Germans, because of technical and economic deficiencies have, for example, discovered that for the purpose of laying waste cities and gaining military objectives the most effective method – and therefore the most efficient method – is to build cheap, poor quality planes in as huge quantities as possible. The average flying time of the average German military plane is thus based on an expectancy of about 48 hours. Compare this with the rigid requirement of the U.S. Army that American military planes must have a life-expectancy of 1,000 hours flying time, and the difference in approach is clearly revealed. However, this is a disputed military question, which is not a subject of this article.</p>
<p>It is not an exaggeration to say that developments in aircraft will alter the face of the globe. From a military point of view, this has already been amply demonstrated. The future course of the war will only reinforce this view. What should not be lost sight of, however, is that with the expansion of the aircraft industry, the economic and political struggles centering around aircraft will have a profound effect on the future course of American society. The workers, if fascism is to be defeated, must take a leaf from the book of finance capital and embark on a bold, militant policy in the aircraft industry. The central point in the program of the workers must be the nationalization of the aircraft industry, under the control of the aircraft workers, the maintenance of a high level of struggle for unionization, increased wages, lower hours, and a general improvement of working conditions.</p>
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Frank Demby
Aircraft and Finance Capital
(June 1941)
From The New International, Vol. VII No. 5 (Whole No. 54), June 1941, pp. 103–6.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
THE KEY INDUSTRY of the war, fast becoming the leading industry of the country, is aircraft. Moreover, its strategic rôle and importance are not confined to war. Its potentialities for peacetime transportation and commerce may be somewhat obscured at present due to the destructive capacities of aviation as revealed by the blitzkrieg, but aircraft is clearly marked as the industry of the future. By August 1 of this year, more than half a million workers will be employed in the industry. The industry has a backlog of more than $4 billion. Its expansion has been absolutely phenomenal, more so than any other industry in the history of American capitalism.
Much discussion has filled the press about the President’s goal of 50,000 planes a year and why the United States is so far from filling it at present. More pertinent, however, would be the query: Why is it that the United States, whose inventive genius produced this remarkable invention at the turn of the century, should now lag way behind in the production of airplanes? The answer to this important question is to be found in the history of aircraft, an obscure story but one which is replete with scandals, greed, intrigue, financial manipulation, patent pools, fabulous profits, government subsidies, and monopoly control.
How the Industry Began
In spite of the fact that The Hague Peace Conference had unanimously voted to outlaw the airplane as a weapon of warfare, the bourgeoisie was so entranced with the military potentialities of the airplane that all nations engaged in research and experimentation with this end in view. But from 1909–1913, while the United States spent $435,000 on airplanes, with the result that at the outbreak of World War I, the Army had 28 planes on hand; Germany had spent $28,000,000 during the same period and had 4,000 planes on hand. Thus, the birth of the aircraft industry in the United States coincided with the outbreak of World War I, the period when far-reaching monopolistic controls of virtually all American industry were being developed.
The pioneers of the industry were the original inventors and their successors. As soon as the Allies began to place orders for airplanes in the United States, and the prospect of tremendous profits opened up. Wall Sreet speculators and automobile manufacturers began to take an interest in the production of airplanes. A patent pool was formed under the aegis of the Manufacturers Aircraft Association, the first trade association in the aircraft industry. The association collected a blanket royalty fee of $200 per airplane and apportioned the patent fees among the basic patent owners, the Curtiss Aeroplane & Motor Co. and the Wright-Martin Aircraft Co. These two companies collected over $2,000,000 each from patent fee alone. The MAA secured the ear of official Washington through the persons of Howard E. Coffin, vice-president of Hudson Motor Co. (one of the automobile companies directly interested in the manufacture of airplanes), who became chairman of the Aircraft Production Board, and Edward A. Deeds, an individual with an extremely notorious record, who was one of the leading people in the organization of the Dayton Wright Airplane Co. Through their efforts over one billion dollars was appropriated by Congress to supply the U.S. Army with airplanes. At least 29,000 planes were expected as a result of this huge appropriation. However, only 196 actually saw service in Europe!
The Manufacturers Aircraft Association was attacked as a trust and a terrific scandal broke in the newspapers and finally landed in the halls of Congress. President Wilson felt compelled to appoint a committee of investigation headed by Snowden H. Marshall. This committee brought in a verdict of “no truth in the charges.” Instead of subsiding, however, the stench began to rise. Deeds was court-martialled; but, through the intervention of Secretary of War Newton D. Baker, Deeds, was acquitted and the reputation of the industry was saved. Even this did not end the matter, as after the Armistice Wilson felt constrained to appoint another committee to investigate the aircraft industry – this time headed by Justice Hughes. This committee “found nothing to criticize” in the conduct of the aircraft industry.
How the Profits Grew
The end of the war also saw the end of the huge profits reaped by the insiders. The scandals of the war period and the crashes of army fliers resulted in loss of confidence on the part of the public, especially the investing public. The aviation industry remained in a state of doldrums until Lindbergh’s historic flight of May 20, 1927, which fortunately coincided with the beginning of the stock market boom. Public interest awakened; confidence in the future of aviation grew and aviation stocks began to be sold. By the end of 1929 the public had swallowed over a billion dollars in aviation stocks. By 1932 the value of these stocks had sunk to a low of fifty million dollars! Some people undoubtedly lost a lot of money, but again the insiders reaped huge fortunes.
For example, Charles W. Deeds, son of Albert A. Deeds invested $40 in 1926. At the 1929 high this was worth $5,550,000. F. B. Rentschler (now chairman of of the board of United Aircraft), brother of the future president of the National City Bank of New York, probably made the biggest killing of all. His investment of $253 in Pratt & Whitney stock was worth a cool $35,000,000 in 1929. Pratt & Whitney Corp., organized after the war with a capital of $1,000 made, according to the Nye Munitions Investigating Committee, a profit of over 1,300,000 per cent in ten years! During all this time, of course, the actual production of airplanes was infinitesmal; other countries had forged way ahead of the U.S.
By 1929, through a combination of mergers, stock watering, holding company setups, and general financial chicanery, finance capital had achieved complete control of the aircraft industry. The 150 companies manufacturing aircraft were dominated and controlled by the following five companies: Curtiss Aeroplane & Manufacturing, United Aircraft & Transportation, Wright Aeronautical, Western Air Express and Aviation Corporation. During the past decade, more than half the companies have been eliminated. The remainder are dominated by three powerful, well-integrated finance capital units. They are, in order of their size (based on total assets at the end of 1940): Curtiss-Wright, $202,000,000; United Aircraft, $132,000,000; and North American Aviation, $54,000,000.
Interlocking Relations
Monopoly’s baby has come of age. Each of the three leading systems is a top-holding company for an entire system, two of them, Curtiss-Wright and North American, representing General Motors – that is, the Morgan-duPont finance capital interests – and the other, United Aircraft, representing the National City Bank group. Curtiss-Wright, formed as a result of a merger between Curtiss Aeroplane & Manufacturing and Wright Aeronautical in 1929, now claims to be the world’s largest group, with 29 subsidiaries and 18 affiliated companies. Indirectly controlled by General Motors, Curtiss-Wight has a maze of ties with virtually all sections of American industry through the more influential members of its board of directors. The chairman of the board, George Armsby, adorns the directorates of a mere 22 corporations, the more significant of those outside of aircraft being Vickers, Tide Water Associated Oil, Standard Gas & Electric, Petroleum Corporation, American Maracaibo, California Packing, and Loew’s. Edgar S. Bloom is a very important member of its board. His 10 directorships help to establish cordial relations with Manufacturers Trust and Western Electric. In passing, it should be noted that Bloom is the director of purchases of the British Purchasing Commission, making him a rather useful person for an aircraft company to have on its board. Other members establish connections with Sperry Gyroscope, Ford Instrument, Douglas Aircraft, Transcontinental Air Transport, Empire Trust, Fisk Rubber, Hayden, Stone & Co., Girard Trust, Ken-necott Copper, Mack Truck and Adams Express. Manufacturers Trust, one of the Morgan banks, is represented through several men, especially the president of Curtiss-Wright, G.W. Vaughn.
Finance Capital Dominates
United Aircraft acquires most of its importance through its control of Pratt & Whitney and Pan American Airways, although Hamilton Standard Propellers and Vought-Sikorsky are becoming increasingly important. It work is spread out among 650 vendors, scattered over twenty states. Its list of directors is not quite as imposing as Curtiss-Wright, but its key men, Rentschler, Eugene R. Wilson, who is president, Morgan B. Brainard, Byron C. Foy, William B. Mayo, provide links with National City Bank, Dime Savings Bank, Chrysler, some smaller automobile companies, New York, New Haven & Hartford Railroad and other transportation interests, Swift & Co., and the Cleveland-Cliffs Iron Co.
The most significant group, however, is probably the one headed by North American Aviation, for it was organized and is directly controlled by General Motors. Directly under its control are Ford Instrument, Sperry Bendix and Douglas. It controls Western Air Express and has great influence in Curtiss-Wright. Its strategic importance to General Motors can be seen merely from the fact that one of its directors is Henry B. duPont. The chairman of the board is Ernest R. Breech, a member of the board of General Motors and one of its key figures in the aircraft industry. It is also linked with International Nickel.
The other companies which serve to round out the picture of concentration in a few hands are the Aviation Corporation, which controls Vultee and American Airways, and is bossed by Victor Emanuel, one of the leading lights in the Rockefeller group. Bell and Lockheed appear to be independent corporations, but are, in reality, completely controlled by General Motors through one of its smaller holding companies, National Aviation. Consolidated is clearly controlled by Lehman Brothers. Its board of directors is loaded down with Lehman men, including Robert Lehman. The two other important companies, Martin and Boeing, have not escaped the long arm of capital, either. On Martin’s board of directors appear John W. Castles, a partner in Smith-Barney & Co., and John W. Hanes, one of the most influential of Morgan representatives. Boeing apparently does not have any direct links with the better-known sections of finance capital, but is controlled by local Pacific Coast representatives.
American finance capital thus enters World War II with a firm grip on the aircraft industry. In 1938, 95 per cent of the total value of the industry’s product was produced by the 13 leading companies. In 1940, 90 per cent of the greatly increased production was produced by the eight leading companies. With the aircraft industry tied up with virtually every other American industry (technically, this is necessary as aircraft represents the synthesis of all industry), with its dollar-a-year representatives in Washington performing meritorious services comparable to those of Coffin and Deeds in World War I, with the excess profits tax removing the ceiling on profits from the aircraft industry, with an escalator clause on prices in all contracts with the U.S. government, the latter, in effect, paying the cost of plant expansions, and with England and the Allies paying higher prices and cash in advance for, in many cases, inferior planes, it is no wonder that the industry is having a field day. World War II is presenting the industry with even larger profits than in the case of World War I. A scandal is in the making, which may not be concealed even by the secrecy which surrounds the industry today, and which, if it breaks, will dwarf that of the last war.
Phenomenal Profits the Rule
The financial pages of the newspapers daily reveal how the aircraft industry is utilizing the tremendous subsidies and favorable contracts which it is receiving to demonstrate that “patriotism” pays off in hard cash. The following table (taken from the New Republic, Feb. 17, 1941) shows the annual rate of return on net worth of selected aircraft companies (in per cent):
1940
1939
First
Quarter
Second
Quarter
Third
Quarter
Total
9 Months
Curtiss-Wright
15
28
44
24
32
Douglas Aircraft
21
52
46
113
70
Martin, Glenn
23
48
47
11
36
North American
74
22
77
41
47
United Aircraft
29
29
47
37
38
1940, as is well known, was a banner year for American capitalists. The aircraft industry, however, made the rest of American industry look as if it was in a state of depression. According to a report in the New York Times of April 27, 1941: “Twenty-four makers of aircraft last year earned $69,866,405, more than double the profits shown in 1939, nearly three times 1938 results and more than five times their earnings in 1937. Each of these years set a new high record for the industry and further peaks are likely under the national defense effort.” (Italics mine – FD) Moreover, 14 of these companies made slightly more than $60 million of the total, or more than 85 per cent of the total profit in aircraft went to these 14 companies. And the four largest companies made a total of $47 million, or over 67 per cent of the total profit.
Many companies showed profits considerably above the 100 per cent increase that the industry as a whole shows over 1939. Two of the larger companies and two of the smaller companies in this category are:
Company
1940 Profit
$
1939 Profit
$
%
Increase
Bell Aircraft
284,745
9,203
3,000
Curtiss-Wright
15,932,000
5,322,000
199
Douglas Aircraft
10,831,971
2,884,197
275
Vultee Aircraft
374,457
25,488
1,370
In addition, it should be pointed out that none of the figures on profits give any indication at all of the tremendous bonuses and salaries that the aircraft companies have been paying their executives. Nor, do they take into account the well-known fact that virtually all the aircraft companies have watered their stock to an unprecedented degree.
Perhaps the most important index of how the merchants of death profit at the expense of the workers can be seen if the rate of profit is compared with the rate of surplus value. Figuring the rate of profit on the basis of total assets (which yields the smallest percentage possible) and taking the three dominant companies as the basis for calculating the rate of profit (for the rate of profit for the industry as a whole must be larger than that shown by these three, as these have the largest investments in constant capital) we get the following picture: (From the 1940 financial statements) —
Company
Total Assets
Net Profit
Rate of Profit
Curtiss-Wright
$202,298,846
$15,932,251
8%
North American
$ 54,017,638
$ 7,090,336
13%
United Aircraft
$132,214,877
$13,139,983
10%
The rate of profit for the industry as a whole is, therefore, at least 10 per cent. That this is a conservative figure is shown by the fact that the average return on sales for the industry as a whole is about 20 per cent. In other words, if the average airplane (of the important military types) is sold to the government for about $100,000 per plane, the cost per plane to the manufacturer is about $80,000 (this, of course, makes no allowance for the phony bookkeeping of the capitalists) and the net profit per plane will run around $10,000, In view of this situation, it is hardly a surprise that statistics concerning prices and costs of airplanes are considered a “military secret.”
The Rate of Surplus Value
While it is difficult under these circumstances to calculate the rate of surplus value, it is possible to arrive at a fair approximation, which is important in estimating the degree of exploitation of labor in the industry and in understanding how finance capital operates. Maximum estimates of the average wage per employee in th industry are given by Fortune (Mar. 1941) in its over-zealous whitewash issue of the aircraft industry is about $1,800. It is undoubtedly much lower than this as the minimum wage paid by most aircraft companies is 50¢ an hour or an annual wage for the worker and his family of $1,300. Taking the figure of $1,800 as the average wage, and assuming that the value of the constant capital transferred to the value of the finished commodity by the application of labor power is also equal to $1,800 per worker (it is certainly no larger than this), we find that the amount of surplus value produced by each worker is equal to $2,184 on the average for 1940. This is based on an estimate of $5,784 as the value of each workers’ output given by Donald Ross in his An Appraisal of Prospects for the Aircraft Industry. Dividing the amount of surplus value produced by each worker on the average by the average wage, the rate of surplus value in the aircraft industry for 1940 was over 120%, and, it must be emphasised, this is a conservative figure. The same methods show a rate of surplus value for 1939 of about 100%. Consequently, the rate of surplus value increased by, at least, 20% in 1940 as compared with 1939. No wonder profits increased phenomenally during the past year.
The growth in profits has paralleled the increase in employment. “Three years ago the building of aircraft required only 30,500 men – 10,500 less than the knit-underwear business. Today over 200,000 workers are on aircrafts payroll – an increase of 150,000 in two years. Estimates from the Bureau of Labor Statistics indicate that by August 1 (1941) employment will exceed 550,000 – 15 per cent larger than last year’s average employment in steel and nearly 25 per cent more than motor vehicles, the present giants. The acceleration has been tenfold in thirty months, compared to a sevenfold increase in shipbuilding durinng the four years of the last war.” (Fortune) The height of the expansion during the last war required only 175,000 workers in 1918. Today, it is estimated that by the end of 1943 when the industry expects to be producing at the rate of 50,000 planes a year, over 1,000,000 workers will be employed in the aircraft industry.
Aircraft’s Labor Policy
The bosses have reinforced their policy of low wages and bad housing conditions by one of the most vicious company union and anti-Negro and anti-Semitic policies of any section of American industry. When Consolidated’s company union program collapsed in Buffalo during the NRA days, the company dismantled its plant and moved to the more attractive labor climate of California. Douglas broke two strikes through the use of thugs and armed vigilantes. As long as the labor force remained small and fairly stable, the aircraft manufacturers were able to escape the strike waves of recent years. The industry was firmly in the grip of finance capital, with the single exception of Brewster, which signed a union shop contract with the CIO-UAW in 1937. Otherwise, there wasn’t a cloud on the horizon.
However, the expansion of the past two years brought on by the outbreak of World War II disturbed the equanimity of the aircraft manufacturers. Called on to expand production at a terrific rate, they found themselves surrounded by various monopolistic interests, such as Mellon’s aluminum monopoly, that felt they could make more profit by getting every last cent out of present capital investment rather than building new plants. Consequently, the expansion of the entire war economy of American imperialism has been much slower than military necessity dictates. After all, profits come first. Cross-patents with German capitalists, such as in the case of beryllium, also interfered with the necessary expansion. Then, the automobile industry, which is closely linked with aircraft and has somewhat of a stranglehold on it, as I have shown, feared the consequences of rapid expansion. Hence, the rejection of the Reuther plan. To be sure, the aircraft manufacturers themselves were not loathe to follow this general policy of finance capital. All the entreaties of the Government to sub-contract production of airplanes and parts have been met with stubborn resistance on the part of these “patriots.” Not even Knudsen’s plea at the end of 1940 that aircraft production was 30 per cent behind schedule moved them.
What really disturbed the equanimity of the aircraft manufacturers was that with the influx of workers necessitated by the expansion that was being carried on, there also came a concerted drive on the part of organized labor to organize the industry. The heart of this union drive has been the Aircraft Division of the UAW, which began serious attempts to organize about a year ago. The focal point in the UAW’s drive was Vultee. The success at Vultee, in spite of the combined opposition of the bosses and the government and a vicious newspaper campaign against the union, was the key to the 1941 strike wave and has led to several other contracts in the aircraft industry, mostly with small plants. The only dosed shop so far achieved by the CIO is with Brewster, when its original contract was renewed earlier this year. Although, there are many progressive features in this contract, which the CIO is using as a model for the industry, the union prejudiced its chances with the workers by accepting a minimum wage clause of 55 cents an hour, thus compromising one of its basic demands – a minimum wage of 75 cents an hour.
Alarmed by the threat of the CIO, the bosses openly invited the AFL Machinist’s union to come in and organize the workers in those plants where their company union setups proved of no avail against the CIO. With this as an opening wedge, and aided by a few strikes, the Machinists have made great headway in aircraft – already having contracts with Boeing, Lockheed and others. The Machinists probably have more contracts than the UAW, and the terms of their contracts appear to be as good. The jurisdictional situation is loaded with dynamite, but it is doubtful if the aircraft manufacturers will be able to maintain their company union policy, in spite of this serious division in organized labor’s ranks.
Anti-Semitism and Jim Crow
That which reveals the reactionary character of the aircraft manufacturers more than anything else, however, is their openly anti-Negro and anti-semitic policy. As Fortune delicately puts it: “The industry also has its prejudices. You will find an almost universal prejudice against Negroes – and in the West Coast plants against Jews. This statement stands the test of observation; you almost never see Negroes in aircraft factories nor do you see Jews in the West Coast plants except in some engineering departments. There is little concealment about the anti-Negro policy – the National Negro Congress did indeed receive a letter from Gerard Tuttle of Vultee stating that ‘it is not the policy of this company to employ people other than of the Caucasian race,’ a frank statement that undoubtedly bespeaks the industry’s belief that white workers have prejudices (sic). Anti-Jewish sentiment in Los Angeles is scrupulously denied, and if it exists, it is probably because the managers suspect all Jews of being infatuated intellectually with Communism in the between-wars world.” (Italics mine – FD)
The selfish, reactionary and, at times, just plain stupid policy of finance capital in aircraft only partially explains why the U.S. lags behind Germany in the production of military planes. The rest can be explained by the extreme conservatism of the Army General Staff. (For the previous history of how military short-sightedness resulted in the cashiering of General Billy Mitchell, and for a fairly good account of the general aircraft swindle prior to the outbreak of World War II, see The Aviation Business – From Kitty Hawk to Wall Street by Elsbeth E. Freudenthal). The Germans, because of technical and economic deficiencies have, for example, discovered that for the purpose of laying waste cities and gaining military objectives the most effective method – and therefore the most efficient method – is to build cheap, poor quality planes in as huge quantities as possible. The average flying time of the average German military plane is thus based on an expectancy of about 48 hours. Compare this with the rigid requirement of the U.S. Army that American military planes must have a life-expectancy of 1,000 hours flying time, and the difference in approach is clearly revealed. However, this is a disputed military question, which is not a subject of this article.
It is not an exaggeration to say that developments in aircraft will alter the face of the globe. From a military point of view, this has already been amply demonstrated. The future course of the war will only reinforce this view. What should not be lost sight of, however, is that with the expansion of the aircraft industry, the economic and political struggles centering around aircraft will have a profound effect on the future course of American society. The workers, if fascism is to be defeated, must take a leaf from the book of finance capital and embark on a bold, militant policy in the aircraft industry. The central point in the program of the workers must be the nationalization of the aircraft industry, under the control of the aircraft workers, the maintenance of a high level of struggle for unionization, increased wages, lower hours, and a general improvement of working conditions.
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<h2>T.N. Vance</h2>
<h1>The Myth of America’s Social Revolution</h1>
<h3>(May 1953)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni53_05" target="new">Vol. XIX No. 3</a>, May–June 1953, pp. 167–172.<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst"><strong>Shares of Upper Income Groups in Income and Savings</strong><br>
<em>By Simon Kuznets, assisted by Elizabeth Jenks</em><br>
National Bureau of Economic Research, Inc. 1953, 725 pp., $9.00.</p>
<p class="fst">The political economy the United States of America is indeed strange, as has frequently been remarked by analysts with varying points of view in the political spectrum. Moreover, in no other country is public relations and the art of sweeping exaggeration been carried to such refined lengths. This social environment helps to explain why a crude statistical work achieves front page publicity in the <strong>New York Times</strong>.</p>
<p>When the preliminary findings of the Kuznets study were released early in 1952, the <strong>New York Times</strong> gave them substantial coverage in its issue of March 5, 1952, starting with a front-page headline: <em>Shift in Income Distribution Is Reducing Poverty in U.S</em>. The lead paragraph by economic reporter Will Lissner stated: The United States has undergone a social revolution in the last four decades, and particularly since the late Thirties.” To be sure, the same newspaper, in an article by the same reporter one month later – to be precise on April 3, 1952 – carried an article with the headline: <em>Living Standards Off 4 per cent Since Korea</em>. This is the conclusion of a study by Dr. Julius Hirsh on the impact of price rises and tax increases on the moderate income city worker’s four person family – “the type of family ... that occurs most frequently in the varied structure of the American urban family.”</p>
<p>The “social” revolution apparently was not too profound, or at any rate it proved to be rather short-lived. Perhaps history was rather unkind to the advocates of the American “social” revolution by launching the Korean war before the findings of the Kuznets study were made public, and before the advertising agencies could use these findings to launch a campaign for reduction of taxes on the upper income groups.</p>
<p>What are the Kuznets’ findings? Lissner summarizes them with reasonable accuracy in the above-mentioned article, as follows:</p>
<p class="quoteb">As a result of little-appreciated changes in the distribution of a rapidly growing national income, the United States has gone about half the way toward eliminating inequities in incomes. But it has done this, not by leveling down, but by leveling up. These are some of the changes:</p>
<p class="fst">The very poor have become fewer by two-thirds of their 1939 number.</p>
<p class="quoteb">The poor have become better off. Where three out of four families had incomes of less than $2,000 a year in 1939, only one out of three fell into that class ten years later.</p>
<p class="quote">The well-to-do and the rich have become more numerous. In the late Thirties one family in about fifty was in the $5,000 and over income class, and one out of 100 was in the $10,000 and over class. In the late Forties, one family out of six was in the $5,000 and over class, and one out of twenty in the $10,000 and over class.</p>
<p class="quote">Over the years, the very rich have become poorer because the rise in labor incomes has been accompanied by a decline in property incomes. The share of the upper 1 per cent of income receivers in total income has declined in thirty-five years from 16 per cent to 9 per cent.</p>
<p class="fst">The Kuznets study, of course, is concerned primarily with what has happened to the upper income groups – the top one, five or seven per cent of the population. In his article in the May 1, 1953 issue of the <strong>New York Times</strong>, based on release of the entire study, Lissner provides a more up-to-date summary of the major findings of Kuznets’ statistical analysis and identifies the source of interpretation of these income changes as a “social” revolution.</p>
<p class="quoteb">The decline in upper group shares of total individual income was sharpest for the top 1 per cent of income receivers in the total population. This group had per capita incomes of $5,500 and up in 1948 and thereafter, and typical family incomes of $22,000 and up. Its share, before Federal income taxes, dropped from 12 per cent in 1939–40 to 8½ per cent in 1947–48. After taxes, the drop was from 11 to 6 per cent ...</p>
<p class="quote">From 1913 to 1948 the per capita income of the top 1 per cent little more than doubled. The Consumers Price Index rose two-and-a-half times its 1913 level; the upper group failed even to maintain its real income. The per capita income of the mass of the population, the lower 99 per cent group, rose to four times its 1913 level, making a vast improvement in its real income.</p>
<p class="quote">This was much more than a mere consequence of the shifts in income distribution which have been reducing poverty in the United States, reported in detail in <strong>The New York Times</strong> of March 5. These shifts, called “a social revolution” by Dr. Arthur F. Burns, Economic director to the President and research director, on leave, of the National Bureau would have produced only a moderate proportional decline.</p>
<p class="fst">Inasmuch as there have been more profound statistical studies than this, including several by Kuznets – none which has received notice outside the professional journals – one forced to the conclusion that it is label “social revolution” that is largely or exclusively responsible for widespread dissemination of the findings of the present study. And it is not without interest that Burns, also carries the title of Professor of Economics at Columbia University, is now chief economic adviser to the President.</p>
<p>Whether Burns is aware of the meaning of the phrase, “social revolution,” we do not know. Certainly Kuznets is not in any way responsible for this remarkable label. He merely presents his findings in a technical manner, hardly intended for the lay reader, surrounds them with the usual caveats and tables of derivatives and substantiation almost without end. The suspicion must remain however, that Burns was well aware of the fact that referring to changes in income distribution as a “social revolution” would result in extraordinary publicity and presumably in support for redistributing the tax burden – a goal that Burns apparently favors. Consider, for example the following paragraph from the first Lissner story:</p>
<p class="quoteb">He, Arthur F. Burns, who directed an important part of these investigations, concludes that we have about reached the limit of the usefulness of the income tax as a device for redistributing income. To raise the large revenues required for security at home and abroad, the tax must be heavily on the brackets where income in concentrated – moderate-sized incomes.</p>
<p class="fst">The “social” revolution thus fades into something far short of the expropriation, or even the impoverishment of the bourgeoisie. It would seem to center around the high individual income tax rates and the reduction in the proportion of national income going to dividends and interest – developments flowing from the development of the Permanent War Economy. The most important development of the Permanent War Economy, in so far as Kuznets’ findings are concerned, is clearly the sharp reduction in unemployment.</p>
<p>States Kuznets (p. xxxvii of his <em>Introduction and Summary</em>):</p>
<p class="quoteb">This recent decline in upper group shares, which for its magnitude and persistence is unmatched in the record, obviously has various causes. The most prominent are the reduction of unemployment and the marked increase in total income flowing to lower income groups (particularly farmers and wage earners); shifts in the saving and investment habits of upper income groups which may have curtailed their chances of getting large receipts from successful mature capital and equity investments; lower interest rates; and steeper income taxes. But <em>conjectures alone are</em> <em>possible</em>, and the discussion in the report is limited to a statement of facts.” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">It is more than a coincidence that the basic economic program of the Eisenhower Administration is to reverse this so-called “social” revolution by reducing taxes on the upper income groups, raising the rate of interest, stimulating venture capital and thereby encouraging higher dividends, and stimulating a slight case of unemployment so that labor will not be so demanding and wages can be reduced.</p>
<p>Only the exigencies of the class struggle can account for the absolutely unpardonable use of the term “social revolution” in connection with the relatively insignificant changes that have taken place in income distribution since the development of the Welfare State and, more recently, the Permanent War Economy. Nevertheless, it is still of considerable interest to examine the changes that have taken place in the distribution of income.</p>
<p>Of more interest than the findings of Kuznets are the reports of the Census Bureau. These are based on Census surveys and may be considered to be much more reliable than data based on income tax returns, as is true of Kuznets. The Census data are before taxes and limited to wage or salary recipients. Dividing the latter into five groups, we get the following picture in percentages for selected years from 1939 to 1951:</p>
<table align="center" cellspacing="1" cellpadding="1">
<tbody><tr>
<th colspan="9">
<p class="smc"><em>Wage or Salary</em></p>
</th>
</tr>
<tr>
<td>
<p class="sm1"><em>Recipients</em></p>
</td>
<td rowspan="6">
<p class="smc"> </p>
</td>
<th>
<p class="smc">1951</p>
</th>
<th>
<p class="smc">1950</p>
</th>
<th>
<p class="smc">1949</p>
</th>
<th>
<p class="smc">1948</p>
</th>
<th>
<p class="smc">1947</p>
</th>
<th>
<p class="smc">1945</p>
</th>
<th>
<p class="smc">1939</p>
</th>
</tr>
<tr>
<td>
<p class="sm1">Lowest fifth</p>
</td>
<td>
<p class="smc"> 3.0</p>
</td>
<td>
<p class="smc"> 2.3</p>
</td>
<td>
<p class="smc"> 2.6</p>
</td>
<td>
<p class="smc"> 2.9</p>
</td>
<td>
<p class="smc"> 2.9</p>
</td>
<td>
<p class="smc"> 2.9</p>
</td>
<td>
<p class="smc"> 3.4</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Second fifth</p>
</td>
<td>
<p class="smc">10.6</p>
</td>
<td>
<p class="smc"> 9.7</p>
</td>
<td>
<p class="smc">10.1</p>
</td>
<td>
<p class="smc">10.2</p>
</td>
<td>
<p class="smc">10.3</p>
</td>
<td>
<p class="smc">10.1</p>
</td>
<td>
<p class="smc"> 8.4</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Middle fifth</p>
</td>
<td>
<p class="smc">18.9</p>
</td>
<td>
<p class="smc">18.3</p>
</td>
<td>
<p class="smc">18.7</p>
</td>
<td>
<p class="smc">18.6</p>
</td>
<td>
<p class="smc">17.8</p>
</td>
<td>
<p class="smc">17.4</p>
</td>
<td>
<p class="smc">15.0</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Fourth fifth</p>
</td>
<td>
<p class="smc">25.9</p>
</td>
<td>
<p class="smc">25.7</p>
</td>
<td>
<p class="smc">26.2</p>
</td>
<td>
<p class="smc">25.5</p>
</td>
<td>
<p class="smc">21.7</p>
</td>
<td>
<p class="smc">25.7</p>
</td>
<td>
<p class="smc">23.9</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">Highest fifth</p>
</td>
<td>
<p class="smc">41.6</p>
</td>
<td>
<p class="smc">44.0</p>
</td>
<td>
<p class="smc">42.4</p>
</td>
<td>
<p class="smc">42.8</p>
</td>
<td>
<p class="smc">44.3</p>
</td>
<td>
<p class="smc">43.9</p>
</td>
<td>
<p class="smc">49.3</p>
</td>
</tr>
</tbody></table>
<p class="fst">In other words, so far as wages and salaries are concerned, accounting for about 70 per cent of total income payments to individuals, the middle income groups have gained – not only at the expense of the upper income group, but also at the expense of the lower income group. At any rate, regardless of what interpretation one cares to make of the above figures, there is clearly nothing that can justify the use of the term “social” revolution.</p>
<p>Kuznets, of course, is concerned primarily with the upper income groups. His figures show a higher decline for the top 1 per cent than for the top 5 per cent – and it is clear that no definition of the upper income groups can properly extend as far as the top 20 per cent. But the major decline has taken place since 1940–41, and this is precisely the period in which individual income tax rates have been raised enormously. The question of the reliability of the estimates is an inevitable one, and Kuznets is greatly bothered by it, spending an entire chapter of 75 pages, including appendix tables, in justifying his methodology. The chapter starts, however, by stating (p. 435):</p>
<p class="quoteb">We cannot measure the probable errors in our estimates directly because our basic data are either by-products of tax administration or products of censuses, subject to all the imperfections of social records. Some defects are obvious and the adjustments discussed in preceding chapters were designed to correct for them as far as possible. But after all these adjustments, errors inevitably remain, and we are faced with the difficult task of appraising them. <em>This discussion of the reliability of our estimates must necessarily be incomplete and inconclusive</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">If it is inconclusive as to whether the estimates are reliable, it may be wondered why the study was made. Kuznets indicates that the choice between using income tax returns and abandoning the study, and he obviously feels that the basic trends revealed by his study are correct. If by this were meant the small relative improvement in the position of the middle income groups, as shown by Census data, empirical evidence would clearly confirm such findings. For the average number of income earners has increased sharply among factory and white collar workers’ families as unemployment has decreased and the percentage of women employees has risen to an all-time high. In other words, on <em>a family</em> basis there can be little doubt that there has been increase in the average standard of living since 1939. This is also true on a per capita basis, but it is not so pronounced.</p>
<p>When, however, the claim is made that the upper income groups one per cent or five per cent) have experienced both an <em>absolute</em> and relative decline in their income shares, therefore presumably in their standards of living, one should look with a rather skeptical and jaundiced eye on an analysis that depends completely on the reliability of income tax data. After many comparisons and reliability tests, Kuznets refers to a sample audit study of 1948 income tax returns (which show a minimum of 70 out of 100 returns in the $25,000 and over bracket as containing errors) and concludes (p. 466):</p>
<p class="quoteb">The audit study, <em>as far as the recent results go</em>, warrants an inference that such underestimation is within a 5 cent margin for incomes at the to 5 per cent level, and within a 10 per, margin for incomes in the 2nd through to 5th percentage bands. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The difficulty is that the results do not go very far. They cannot do justice the extensive legal tax avoidance practiced by the upper income groups as analyzed in some detail in Part VI of <em>The Permanent War Economy</em>: <a href="../../1951/permwar/part6.htm" target="new"><em>Taxation and the Class Struggle</em></a>, <em>cf.</em> November–December 1951 issue of <strong>The New International</strong>).</p>
<p>Our own private sample study of millionaires (the only reliable method of estimating what has happened to the incomes of the bourgeoisie) indicates that they are managing to survive although the fees to tax accountants and lawyers have increased rather sharply. Mansions costing in excess of $100,000 are still being built – in fact, in larger numbers than in any period during the last 25 years. Of course, vacations are frequently transformed into business trips – or is it vice-versa? Profits are frequently allowed to remain in corporations, in the expectation that the Eisenhower administration will ultimately reduce the surtax rates in the upper income brackets, so that it will “pay” to retrieve the dividends that are waiting to be declared. Some of these factors Kuznets tries to take into account, but the majority (and they are cumulatively decisive) are beyond statistical analysis.</p>
<p>We can only conclude that in a period of high tax rates any analysis of upper income groups based on tax returns is not only necessarily inconclusive, but tends to be unreliable. Kuznets, moreover, bases his analysis on a per capita approach. Aside from certain statistical difficulties in converting income tax returns to a per capita basis, the procedure as a measure of what has happened to upper income <em>groups</em> is exceedingly questionable. While the size of families in upper income brackets is smaller than in lower income groups, an upper income group with a large family might well be excluded from Kuznets’ array of the data on a per capita basis. If the purpose of the study is to discover something about standards of living, and not just to collect a lot of figures, then the facts of economic life have to be considered. Using the Kuznets approach, a single individual with an income of $25,000 annually would be part of the upper one per cent in 1948, but a family of five with the one income earner admitting to an income of $100,000 for the year might be excluded since the per capita is only $20,000. Such an analysis overlooks the fact that one mansion is usually sufficient for a family of this type; in any case, five mansions are rarely used. An analysis of <em>shares</em> of upper income groups necessarily involves a ratio of two quantities. The numerator, of course, consists of the amount of income going to the upper income groups, however income is defined. And it makes quite a difference as to what is or is not included in income. The Kuznets data necessarily contain a downward bias (probably on the order of twenty to thirty per cent) in the amount of income currently (since 1943) going to the upper income groups. The numerator of the income ratio is thus understated. But the ratio also depends on the size of the denominator. Here Kuznets uses what amounts to his own estimates of national income. This tends to overstate because of its inclusion of income in kind, imputed rent and other such concepts that are clearly not part of any analysis of the performance of a <em>capitalist</em> economy. If the numerator is noticeably smaller than it should be, and denominator somewhat larger than is proper for analysis, the resulting ratio is necessarily considerably smaller than it ought to be.</p>
<p>Unfortunately, we do not have available the statistical resources of the National Bureau of Economic Research or the Department of Commerce, but the decline in the shares of upper income groups since 1939 is not nearly as large as reported. Such decline as has occurred, moreover, is principally confined to the period upper income groups since 1929 is not Permanent War Economy. [This is in the original. – <em>Note by transcriber</em>] The bourgeoisie have not been destroyed or impoverished. They have succeeded, so far, in preserving their basic wealth, income and property. Nor has there been any diminution in the political power of the American bourgeoisie. What has happened, as we pointed out in the November#8211;December 1951 issue of <strong>The New International</strong> (p. 338), is that: “<em>The state however, whose function is more and more to protect the rule and the wealth of the bourgeoisie, is being financed in steadily increasing measure by the workers and lower middle classes</em>. Therein lies the secret role of taxation under the Permanent War Economy, while equality of incomes remains just as much a mirage on the horizon as it ever was.” (Italics in the original.)</p>
<p>Kuznets has contributed data that may be useful to income analysts. He is the real pioneer in national income data, and as one who justifiably claims to be a scientist in his field, he should blush at the “social” revolution that Burns has produced from his highly qualified data. Above all Kuznets ought to investigate why his data are being used as part of the drive, spearheaded by the NAM to reduce the tax burden of the upper income groups.</p>
<p class="author">T.N. Vance</p>
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T.N. Vance
The Myth of America’s Social Revolution
(May 1953)
From The New International, Vol. XIX No. 3, May–June 1953, pp. 167–172.
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Shares of Upper Income Groups in Income and Savings
By Simon Kuznets, assisted by Elizabeth Jenks
National Bureau of Economic Research, Inc. 1953, 725 pp., $9.00.
The political economy the United States of America is indeed strange, as has frequently been remarked by analysts with varying points of view in the political spectrum. Moreover, in no other country is public relations and the art of sweeping exaggeration been carried to such refined lengths. This social environment helps to explain why a crude statistical work achieves front page publicity in the New York Times.
When the preliminary findings of the Kuznets study were released early in 1952, the New York Times gave them substantial coverage in its issue of March 5, 1952, starting with a front-page headline: Shift in Income Distribution Is Reducing Poverty in U.S. The lead paragraph by economic reporter Will Lissner stated: The United States has undergone a social revolution in the last four decades, and particularly since the late Thirties.” To be sure, the same newspaper, in an article by the same reporter one month later – to be precise on April 3, 1952 – carried an article with the headline: Living Standards Off 4 per cent Since Korea. This is the conclusion of a study by Dr. Julius Hirsh on the impact of price rises and tax increases on the moderate income city worker’s four person family – “the type of family ... that occurs most frequently in the varied structure of the American urban family.”
The “social” revolution apparently was not too profound, or at any rate it proved to be rather short-lived. Perhaps history was rather unkind to the advocates of the American “social” revolution by launching the Korean war before the findings of the Kuznets study were made public, and before the advertising agencies could use these findings to launch a campaign for reduction of taxes on the upper income groups.
What are the Kuznets’ findings? Lissner summarizes them with reasonable accuracy in the above-mentioned article, as follows:
As a result of little-appreciated changes in the distribution of a rapidly growing national income, the United States has gone about half the way toward eliminating inequities in incomes. But it has done this, not by leveling down, but by leveling up. These are some of the changes:
The very poor have become fewer by two-thirds of their 1939 number.
The poor have become better off. Where three out of four families had incomes of less than $2,000 a year in 1939, only one out of three fell into that class ten years later.
The well-to-do and the rich have become more numerous. In the late Thirties one family in about fifty was in the $5,000 and over income class, and one out of 100 was in the $10,000 and over class. In the late Forties, one family out of six was in the $5,000 and over class, and one out of twenty in the $10,000 and over class.
Over the years, the very rich have become poorer because the rise in labor incomes has been accompanied by a decline in property incomes. The share of the upper 1 per cent of income receivers in total income has declined in thirty-five years from 16 per cent to 9 per cent.
The Kuznets study, of course, is concerned primarily with what has happened to the upper income groups – the top one, five or seven per cent of the population. In his article in the May 1, 1953 issue of the New York Times, based on release of the entire study, Lissner provides a more up-to-date summary of the major findings of Kuznets’ statistical analysis and identifies the source of interpretation of these income changes as a “social” revolution.
The decline in upper group shares of total individual income was sharpest for the top 1 per cent of income receivers in the total population. This group had per capita incomes of $5,500 and up in 1948 and thereafter, and typical family incomes of $22,000 and up. Its share, before Federal income taxes, dropped from 12 per cent in 1939–40 to 8½ per cent in 1947–48. After taxes, the drop was from 11 to 6 per cent ...
From 1913 to 1948 the per capita income of the top 1 per cent little more than doubled. The Consumers Price Index rose two-and-a-half times its 1913 level; the upper group failed even to maintain its real income. The per capita income of the mass of the population, the lower 99 per cent group, rose to four times its 1913 level, making a vast improvement in its real income.
This was much more than a mere consequence of the shifts in income distribution which have been reducing poverty in the United States, reported in detail in The New York Times of March 5. These shifts, called “a social revolution” by Dr. Arthur F. Burns, Economic director to the President and research director, on leave, of the National Bureau would have produced only a moderate proportional decline.
Inasmuch as there have been more profound statistical studies than this, including several by Kuznets – none which has received notice outside the professional journals – one forced to the conclusion that it is label “social revolution” that is largely or exclusively responsible for widespread dissemination of the findings of the present study. And it is not without interest that Burns, also carries the title of Professor of Economics at Columbia University, is now chief economic adviser to the President.
Whether Burns is aware of the meaning of the phrase, “social revolution,” we do not know. Certainly Kuznets is not in any way responsible for this remarkable label. He merely presents his findings in a technical manner, hardly intended for the lay reader, surrounds them with the usual caveats and tables of derivatives and substantiation almost without end. The suspicion must remain however, that Burns was well aware of the fact that referring to changes in income distribution as a “social revolution” would result in extraordinary publicity and presumably in support for redistributing the tax burden – a goal that Burns apparently favors. Consider, for example the following paragraph from the first Lissner story:
He, Arthur F. Burns, who directed an important part of these investigations, concludes that we have about reached the limit of the usefulness of the income tax as a device for redistributing income. To raise the large revenues required for security at home and abroad, the tax must be heavily on the brackets where income in concentrated – moderate-sized incomes.
The “social” revolution thus fades into something far short of the expropriation, or even the impoverishment of the bourgeoisie. It would seem to center around the high individual income tax rates and the reduction in the proportion of national income going to dividends and interest – developments flowing from the development of the Permanent War Economy. The most important development of the Permanent War Economy, in so far as Kuznets’ findings are concerned, is clearly the sharp reduction in unemployment.
States Kuznets (p. xxxvii of his Introduction and Summary):
This recent decline in upper group shares, which for its magnitude and persistence is unmatched in the record, obviously has various causes. The most prominent are the reduction of unemployment and the marked increase in total income flowing to lower income groups (particularly farmers and wage earners); shifts in the saving and investment habits of upper income groups which may have curtailed their chances of getting large receipts from successful mature capital and equity investments; lower interest rates; and steeper income taxes. But conjectures alone are possible, and the discussion in the report is limited to a statement of facts.” (Italics mine – T.N.V.)
It is more than a coincidence that the basic economic program of the Eisenhower Administration is to reverse this so-called “social” revolution by reducing taxes on the upper income groups, raising the rate of interest, stimulating venture capital and thereby encouraging higher dividends, and stimulating a slight case of unemployment so that labor will not be so demanding and wages can be reduced.
Only the exigencies of the class struggle can account for the absolutely unpardonable use of the term “social revolution” in connection with the relatively insignificant changes that have taken place in income distribution since the development of the Welfare State and, more recently, the Permanent War Economy. Nevertheless, it is still of considerable interest to examine the changes that have taken place in the distribution of income.
Of more interest than the findings of Kuznets are the reports of the Census Bureau. These are based on Census surveys and may be considered to be much more reliable than data based on income tax returns, as is true of Kuznets. The Census data are before taxes and limited to wage or salary recipients. Dividing the latter into five groups, we get the following picture in percentages for selected years from 1939 to 1951:
Wage or Salary
Recipients
1951
1950
1949
1948
1947
1945
1939
Lowest fifth
3.0
2.3
2.6
2.9
2.9
2.9
3.4
Second fifth
10.6
9.7
10.1
10.2
10.3
10.1
8.4
Middle fifth
18.9
18.3
18.7
18.6
17.8
17.4
15.0
Fourth fifth
25.9
25.7
26.2
25.5
21.7
25.7
23.9
Highest fifth
41.6
44.0
42.4
42.8
44.3
43.9
49.3
In other words, so far as wages and salaries are concerned, accounting for about 70 per cent of total income payments to individuals, the middle income groups have gained – not only at the expense of the upper income group, but also at the expense of the lower income group. At any rate, regardless of what interpretation one cares to make of the above figures, there is clearly nothing that can justify the use of the term “social” revolution.
Kuznets, of course, is concerned primarily with the upper income groups. His figures show a higher decline for the top 1 per cent than for the top 5 per cent – and it is clear that no definition of the upper income groups can properly extend as far as the top 20 per cent. But the major decline has taken place since 1940–41, and this is precisely the period in which individual income tax rates have been raised enormously. The question of the reliability of the estimates is an inevitable one, and Kuznets is greatly bothered by it, spending an entire chapter of 75 pages, including appendix tables, in justifying his methodology. The chapter starts, however, by stating (p. 435):
We cannot measure the probable errors in our estimates directly because our basic data are either by-products of tax administration or products of censuses, subject to all the imperfections of social records. Some defects are obvious and the adjustments discussed in preceding chapters were designed to correct for them as far as possible. But after all these adjustments, errors inevitably remain, and we are faced with the difficult task of appraising them. This discussion of the reliability of our estimates must necessarily be incomplete and inconclusive. (Italics mine – T.N.V.)
If it is inconclusive as to whether the estimates are reliable, it may be wondered why the study was made. Kuznets indicates that the choice between using income tax returns and abandoning the study, and he obviously feels that the basic trends revealed by his study are correct. If by this were meant the small relative improvement in the position of the middle income groups, as shown by Census data, empirical evidence would clearly confirm such findings. For the average number of income earners has increased sharply among factory and white collar workers’ families as unemployment has decreased and the percentage of women employees has risen to an all-time high. In other words, on a family basis there can be little doubt that there has been increase in the average standard of living since 1939. This is also true on a per capita basis, but it is not so pronounced.
When, however, the claim is made that the upper income groups one per cent or five per cent) have experienced both an absolute and relative decline in their income shares, therefore presumably in their standards of living, one should look with a rather skeptical and jaundiced eye on an analysis that depends completely on the reliability of income tax data. After many comparisons and reliability tests, Kuznets refers to a sample audit study of 1948 income tax returns (which show a minimum of 70 out of 100 returns in the $25,000 and over bracket as containing errors) and concludes (p. 466):
The audit study, as far as the recent results go, warrants an inference that such underestimation is within a 5 cent margin for incomes at the to 5 per cent level, and within a 10 per, margin for incomes in the 2nd through to 5th percentage bands. (Italics mine – T.N.V.)
The difficulty is that the results do not go very far. They cannot do justice the extensive legal tax avoidance practiced by the upper income groups as analyzed in some detail in Part VI of The Permanent War Economy: Taxation and the Class Struggle, cf. November–December 1951 issue of The New International).
Our own private sample study of millionaires (the only reliable method of estimating what has happened to the incomes of the bourgeoisie) indicates that they are managing to survive although the fees to tax accountants and lawyers have increased rather sharply. Mansions costing in excess of $100,000 are still being built – in fact, in larger numbers than in any period during the last 25 years. Of course, vacations are frequently transformed into business trips – or is it vice-versa? Profits are frequently allowed to remain in corporations, in the expectation that the Eisenhower administration will ultimately reduce the surtax rates in the upper income brackets, so that it will “pay” to retrieve the dividends that are waiting to be declared. Some of these factors Kuznets tries to take into account, but the majority (and they are cumulatively decisive) are beyond statistical analysis.
We can only conclude that in a period of high tax rates any analysis of upper income groups based on tax returns is not only necessarily inconclusive, but tends to be unreliable. Kuznets, moreover, bases his analysis on a per capita approach. Aside from certain statistical difficulties in converting income tax returns to a per capita basis, the procedure as a measure of what has happened to upper income groups is exceedingly questionable. While the size of families in upper income brackets is smaller than in lower income groups, an upper income group with a large family might well be excluded from Kuznets’ array of the data on a per capita basis. If the purpose of the study is to discover something about standards of living, and not just to collect a lot of figures, then the facts of economic life have to be considered. Using the Kuznets approach, a single individual with an income of $25,000 annually would be part of the upper one per cent in 1948, but a family of five with the one income earner admitting to an income of $100,000 for the year might be excluded since the per capita is only $20,000. Such an analysis overlooks the fact that one mansion is usually sufficient for a family of this type; in any case, five mansions are rarely used. An analysis of shares of upper income groups necessarily involves a ratio of two quantities. The numerator, of course, consists of the amount of income going to the upper income groups, however income is defined. And it makes quite a difference as to what is or is not included in income. The Kuznets data necessarily contain a downward bias (probably on the order of twenty to thirty per cent) in the amount of income currently (since 1943) going to the upper income groups. The numerator of the income ratio is thus understated. But the ratio also depends on the size of the denominator. Here Kuznets uses what amounts to his own estimates of national income. This tends to overstate because of its inclusion of income in kind, imputed rent and other such concepts that are clearly not part of any analysis of the performance of a capitalist economy. If the numerator is noticeably smaller than it should be, and denominator somewhat larger than is proper for analysis, the resulting ratio is necessarily considerably smaller than it ought to be.
Unfortunately, we do not have available the statistical resources of the National Bureau of Economic Research or the Department of Commerce, but the decline in the shares of upper income groups since 1939 is not nearly as large as reported. Such decline as has occurred, moreover, is principally confined to the period upper income groups since 1929 is not Permanent War Economy. [This is in the original. – Note by transcriber] The bourgeoisie have not been destroyed or impoverished. They have succeeded, so far, in preserving their basic wealth, income and property. Nor has there been any diminution in the political power of the American bourgeoisie. What has happened, as we pointed out in the November#8211;December 1951 issue of The New International (p. 338), is that: “The state however, whose function is more and more to protect the rule and the wealth of the bourgeoisie, is being financed in steadily increasing measure by the workers and lower middle classes. Therein lies the secret role of taxation under the Permanent War Economy, while equality of incomes remains just as much a mirage on the horizon as it ever was.” (Italics in the original.)
Kuznets has contributed data that may be useful to income analysts. He is the real pioneer in national income data, and as one who justifiably claims to be a scientist in his field, he should blush at the “social” revolution that Burns has produced from his highly qualified data. Above all Kuznets ought to investigate why his data are being used as part of the drive, spearheaded by the NAM to reduce the tax burden of the upper income groups.
T.N. Vance
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<h2>Frank Demby</h2>
<h1>Economic Notes</h1>
<h3>(August 1941)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_32" target="new">Vol. 5 No. 32</a>, 11 August 1941, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">Dividends on stocks listed on the New York Stock Exchange were 8.2 per cent HIGHER in the first halt of 1941 than in the first half of 1940. Not bad, considering that 1940 was the most profitable year since 1929. But look at the increase in the war babies. Aviation stocks increased their dividends by 104.6 per cent in this period. The shipbuilding industry came next with a vise of 94 per cent, followed by the steel industry with a rise of 74 per cent.</p>
<p>All told. 543 listed common stocks yielded approximately $956,705,000 in dividends in the first six months of 1941. <em>This suggests that those industries that have granted wage increases due to the fighting power of the workers not only can easily afford it, but can afford much more. This conclusion is heavily reinforced when it is recalled that most of the profits nowadays are not being paid out in dividends, but are being salted away as war chests in surplus accounts as well as being paid out to officers in the form of bonuses.</em> The argument that was made by the steel companies, for example, that a 10 per cent wage increase would bankrupt them unless they raised prices a corresponding amount is thus shown up for the fraud that everyone knew it to be at the time.</p>
<p>Also, it is worth pointing out that the fears of the companies that higher taxes would eat up all their profits have likewise proved to be groundless. If the government is looking for more money from taxes, it seems to us that</p>
<p>the logical thing to do is to raise corporation tax -- not the 5 per cent proposed, but SUBSTANTIALLY. This, <em>plus a 100 per cent excess profits tax</em>, would raise, more than enough money so that there would be no necessity for increased excise taxes on necessities, or for cutting off 700,000 workers from WPA. <em>For higher taxes on industry, and higher wages paid by industry!</em></p>
<h4>*</h4>
<p class="fst">The excess profits tax proposed by the House Ways and Means Committee remains a fraud in spite of the additional levy of 10 per cent. In the first place, a tax running from 35 to 60 per cent on profits in excess of “normal” is hardly one which will prevent the accumulation of huge fortunes from war orders. Further, the rejection by the committee of the President’s proposal to eliminate the average earnings method of computing excess profits means that corporations still retain the choice of this method or the capital investment method. The latter method, at least, would consider all profits over 8 per cent of the capital invested as excess. The average earnings method, it will be recalled, considers profits above the average earned from 1936 through 1939 (with some “liberalizing” amendments already passed) as excess. For many of the big corporations, who have most of the “defense” orders, the average earnings method allows them a “normal” profit far in excess of 8 per cent! The real indication, however, of the fact that Congress has no intention of passing a real excess profits tax is the inclusion of a provision which adds 25 per cent exemption – to the existing 100 per cent exemption – on new capital invested by corporations. Previously, it cost a corporation absolutely nothing to build a new plant, on which, of course, it would make its customary profit. Now, corporations are to be paid, in reality, to build new plants or expand old ones!</p>
<h4>*</h4>
<p class="fst">Ten days after American exporters charged the British with re-selling American Lend-Lease materials to Latin America, the British agreed to restrict their trade competition with the United States. The incident furnishes a revealing sidelight on how imperialism conducts its war for “democracy.” American exporters have repeatedly complained that they have been meeting with increasing British competition in the South American market, particularly in such lines as steel, machinery, rubber, paper and textiles. In most cases, the items were those in which the British are reported to have a shortage and which they have been importing from the U.S. under the Lend-Lease Act.</p>
<p>The Americans claimed that the British were either re-exporting these American-made products or were using the American products and shipping an equivalent amount of British products. The Americans didn’t at all like the idea of the American government financing their rivals, even if they were allies. When private complaints brought no results, they decided to make the matter public.</p>
<p class="quoteb">“The crowning blow in the succession of incidents, according to exporters, came three weeks ago when a company in Buenos Aires which was on the British blacklist entered the market for quantities of paper. According to exporters, the order was substantial and at the insistence of an English supplier the name of the Buenos Aires buyer was removed from the blacklist long enough to enable the British company to bid for the business, and get its money, whereupon the company was put back on the blacklist again.” – (<strong>New York Times</strong>, July 6)</p>
<p class="fst">Comment on this would really be superfluous, but we suggest, in the interests of free trade for American capitalists, that perhaps the President ought to include British firms on his export blacklist.</p>
<h4>*</h4>
<p class="fst">General Robert E. Wood, chairman of the board of Sears, Roebuck & Co. and national chairman of the America First Committee, has resigned as chairman of the Economic Policy Committee of the National Association of Manufacturers. This resignation, “caused by inability to find time to devote to his duties as chairman of the NAM committee,” was made about a month ago but it was not announced until the committee meeting of July 11 when Thomas E. McCabe, president of the Scott Paper Co., was chosen as General Wood’s successor. In announcing his acceptance of the chairmanship, Mr. McCabe said:</p>
<p class="quoteb">“The impact of guns, shells, tanks and planes upon our heretofore peaceful butter-and-egg economy may have greater repercussions than any bomb deliberately fabricated to create havoc. <em>It is not at all improbable that hundreds or even thousands of manufacturing plants will be shut down within the year unless they are able to convert their production to defense work.”</em> (Emphasis mine – <em>F.D.</em>)</p>
<p class="fst">The chairman of the most important committee of all American industry thus sees as the only alternatives for the consumer goods industries – either stopping production, or shifting to instruments of war. Out of their own mouths the capitalists stand convicted as the bankrupt managers of a bankrupt social system.</p>
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Frank Demby
Economic Notes
(August 1941)
From Labor Action, Vol. 5 No. 32, 11 August 1941, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Dividends on stocks listed on the New York Stock Exchange were 8.2 per cent HIGHER in the first halt of 1941 than in the first half of 1940. Not bad, considering that 1940 was the most profitable year since 1929. But look at the increase in the war babies. Aviation stocks increased their dividends by 104.6 per cent in this period. The shipbuilding industry came next with a vise of 94 per cent, followed by the steel industry with a rise of 74 per cent.
All told. 543 listed common stocks yielded approximately $956,705,000 in dividends in the first six months of 1941. This suggests that those industries that have granted wage increases due to the fighting power of the workers not only can easily afford it, but can afford much more. This conclusion is heavily reinforced when it is recalled that most of the profits nowadays are not being paid out in dividends, but are being salted away as war chests in surplus accounts as well as being paid out to officers in the form of bonuses. The argument that was made by the steel companies, for example, that a 10 per cent wage increase would bankrupt them unless they raised prices a corresponding amount is thus shown up for the fraud that everyone knew it to be at the time.
Also, it is worth pointing out that the fears of the companies that higher taxes would eat up all their profits have likewise proved to be groundless. If the government is looking for more money from taxes, it seems to us that
the logical thing to do is to raise corporation tax -- not the 5 per cent proposed, but SUBSTANTIALLY. This, plus a 100 per cent excess profits tax, would raise, more than enough money so that there would be no necessity for increased excise taxes on necessities, or for cutting off 700,000 workers from WPA. For higher taxes on industry, and higher wages paid by industry!
*
The excess profits tax proposed by the House Ways and Means Committee remains a fraud in spite of the additional levy of 10 per cent. In the first place, a tax running from 35 to 60 per cent on profits in excess of “normal” is hardly one which will prevent the accumulation of huge fortunes from war orders. Further, the rejection by the committee of the President’s proposal to eliminate the average earnings method of computing excess profits means that corporations still retain the choice of this method or the capital investment method. The latter method, at least, would consider all profits over 8 per cent of the capital invested as excess. The average earnings method, it will be recalled, considers profits above the average earned from 1936 through 1939 (with some “liberalizing” amendments already passed) as excess. For many of the big corporations, who have most of the “defense” orders, the average earnings method allows them a “normal” profit far in excess of 8 per cent! The real indication, however, of the fact that Congress has no intention of passing a real excess profits tax is the inclusion of a provision which adds 25 per cent exemption – to the existing 100 per cent exemption – on new capital invested by corporations. Previously, it cost a corporation absolutely nothing to build a new plant, on which, of course, it would make its customary profit. Now, corporations are to be paid, in reality, to build new plants or expand old ones!
*
Ten days after American exporters charged the British with re-selling American Lend-Lease materials to Latin America, the British agreed to restrict their trade competition with the United States. The incident furnishes a revealing sidelight on how imperialism conducts its war for “democracy.” American exporters have repeatedly complained that they have been meeting with increasing British competition in the South American market, particularly in such lines as steel, machinery, rubber, paper and textiles. In most cases, the items were those in which the British are reported to have a shortage and which they have been importing from the U.S. under the Lend-Lease Act.
The Americans claimed that the British were either re-exporting these American-made products or were using the American products and shipping an equivalent amount of British products. The Americans didn’t at all like the idea of the American government financing their rivals, even if they were allies. When private complaints brought no results, they decided to make the matter public.
“The crowning blow in the succession of incidents, according to exporters, came three weeks ago when a company in Buenos Aires which was on the British blacklist entered the market for quantities of paper. According to exporters, the order was substantial and at the insistence of an English supplier the name of the Buenos Aires buyer was removed from the blacklist long enough to enable the British company to bid for the business, and get its money, whereupon the company was put back on the blacklist again.” – (New York Times, July 6)
Comment on this would really be superfluous, but we suggest, in the interests of free trade for American capitalists, that perhaps the President ought to include British firms on his export blacklist.
*
General Robert E. Wood, chairman of the board of Sears, Roebuck & Co. and national chairman of the America First Committee, has resigned as chairman of the Economic Policy Committee of the National Association of Manufacturers. This resignation, “caused by inability to find time to devote to his duties as chairman of the NAM committee,” was made about a month ago but it was not announced until the committee meeting of July 11 when Thomas E. McCabe, president of the Scott Paper Co., was chosen as General Wood’s successor. In announcing his acceptance of the chairmanship, Mr. McCabe said:
“The impact of guns, shells, tanks and planes upon our heretofore peaceful butter-and-egg economy may have greater repercussions than any bomb deliberately fabricated to create havoc. It is not at all improbable that hundreds or even thousands of manufacturing plants will be shut down within the year unless they are able to convert their production to defense work.” (Emphasis mine – F.D.)
The chairman of the most important committee of all American industry thus sees as the only alternatives for the consumer goods industries – either stopping production, or shifting to instruments of war. Out of their own mouths the capitalists stand convicted as the bankrupt managers of a bankrupt social system.
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<h2>Frank Demby</h2>
<h1>“Everyone” Must Sacrifice: Specially, Every Worker</h1>
<h4>Wall Street’s Government Agents Look About for Ways and Means<br>
of Unloading the War Cost on the People</h4>
<h3>(March 1941)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_12" target="new">Vol. 5 No. 12</a>, 24 March 1941, pp. 1 & 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">As soon as the ink was dry on the President’s message to Congress last week asking for seven billion dollars to implement the “all-out aid to England” program, the proposals as to how this money should be raised came thick and fast. Rumor has it that they boil down to two main propositions Either or both is being given serious attention by those “patriots” who measure the extent of their patriotism by the degree to which they can increase their bank accounts. One is a 5 per cent payroll tax to be levied each week on all those earning $25 a week or more. This tax would be deducted at the source. That, is, the employer will deduct it from your paycheck and you will get your regular weekly pittance minus; the 5 per cent. In the course of a year, it is estimated that such a tax can raise several billion dollars. The other proposal is for a national sales tax to be placed on all articles that enter into commerce. A two or three per cent sales tax on everything you buy could also raise several billion dollars.<br>
</p>
<h4>Very Noticeable Inconveniences</h4>
<p class="fst">If either or both of these measures is adopted the government’s credit will be maintained in a sound position, industry can go ahead and “pay-triotically” produce the munitions required to save democracy without worrying about its incentive to produce being destroyed, for there will no longer be any necessity to talk about higher taxes on corporations and excess profits taxes and such annoying things. Isn’t this a small sacrifice to maintain our way of life? Besides, you won’t even notice it. This argument of the reactionaries was given sharp emphasis by the President in his “Aid to Democracies” speech on March 15, when he said, in speaking about everybody sacrificing: <em>“Yes, you will feel the impact of this gigantic effort in your daily lives. You will feel it in a way that will cause lo you many inconveniences.”</em></p>
<p>And these “inconveniences” will be very, very noticeable: A worker making $25 a week would have $1. deducted from his payroll every week, if the payroll tax goes through. If the national sales tax should also be passed, that will place an additional burden on the worker, who is already having a hard enough struggle to feed, clothe and shelter his wife and children. Assuming that $20 out of a worker’s $25 weekly income spent on goods and services that would be subject to sales tax, that would mean (on the basis of a 2 per cent sales tax) an additional 40 cents a week cut in wages. $1.65 a week, or more, in new taxes may not sound very much, but for a worker getting only $25 a week, this is tremendous sum. someone getting $125 a week or a corporation executive receiving the measly stipend of $2,500 a week can very easily afford to pay five times, or 100 times, what the worker making $25 a week can afford to pay. Both a payroll tax and a sales tax are vicious, reactionary types of taxes. The burden falls most heavily on those who can least afford to pay them. this is a direct violation or the accepted principle of taxation, that taxes should be based on ability to pay.</p>
<p><em>Moreover, this does not take into account at all the fact that prices are rising and promise to rise much more rapidly in the future. Wholesale commodity prices arc already more than 29 per cent higher than they were at the outbreak of World War II on Sept. 1, 1939. Retail prices are beginning to catch up to wholesale prices. Meat prices have risen, in some cases, more than 25 per cent in the same period. The cost of living on the average throughout the country has gone up more than 3 per cent and will now start to rise in all earnestness. To which must be added the fact that with the establishment of priorities in aluminum and other metals, we will just begin to feel the impact of the war economy in coming months in the form of shortages of many things that the consumer needs.</em></p>
<p><em>Some will grant that these new taxes are very unfair, but, they want to know, how else can we pay for the cost of the war program? The answer is simple. The big corporations in 1940 made the highest profits they have made since 1929, even after making deductions for higher taxes. Why not, Mr. President, take these billions of dollars of profits and use them to pay for the cost of your and their “Aid to England” program? And if the 60 families that run this country and control the lion’s share of the wealth won’t turn out munitions to preserve “democracy” unless, they can make their 8, 10 and more per cent profit, WHY NOT, MR. PRESIDENT, HAVE THE GOVERNMENT TAKE OVER THEIR FACTORIES AND PLACE THEM UNDER THE MANAGEMENT OF THE WORKERS?</em></p>
<p>You won’t do this, Mr. Roosevelt for the simple reason that your desire to defeat Hitler is, and must be, subordinated to your desire to maintain the profit system. If you dared to take any steps against profits, your real bosses – not the American people, but Wall Street and the 60 families – wouldn’t like it. They might even get rid of you as no longer useful to them. We say that you can’t preserve democracy and profits, Mr. President. One or the other will have to go.</p>
<p><em>And by the way, did you know that while you were speaking about all of us sacrificing to help the cause of democracy (read: American imperialism), your Congress is considering ways and means of lightening the burden of the excess profits tax? Yes, this same excess profits tax that was such a swindle last October that you couldn’t count on it to raise more than a little chicken feed in a year when corporations were making huge profits, is now to be reduced. New exemptions and deductions are to be allowed.</em></p>
<p>If the meaning of this isn’t clear to you, Mr. Roosevelt, it certainly will be clear to the workers of this country. When you speak of sacrifice, what you mean is that the workers should sacrifice. They should pay for the cost of your war; they should stop striking to improve their conditions so that nothing will interfere with your program of making American imperialism supreme throughout the world. This is pure hypocrisy and we are confident that the workers of this country will recognize it for what it is and will act accordingly.</p>
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Frank Demby
“Everyone” Must Sacrifice: Specially, Every Worker
Wall Street’s Government Agents Look About for Ways and Means
of Unloading the War Cost on the People
(March 1941)
From Labor Action, Vol. 5 No. 12, 24 March 1941, pp. 1 & 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
As soon as the ink was dry on the President’s message to Congress last week asking for seven billion dollars to implement the “all-out aid to England” program, the proposals as to how this money should be raised came thick and fast. Rumor has it that they boil down to two main propositions Either or both is being given serious attention by those “patriots” who measure the extent of their patriotism by the degree to which they can increase their bank accounts. One is a 5 per cent payroll tax to be levied each week on all those earning $25 a week or more. This tax would be deducted at the source. That, is, the employer will deduct it from your paycheck and you will get your regular weekly pittance minus; the 5 per cent. In the course of a year, it is estimated that such a tax can raise several billion dollars. The other proposal is for a national sales tax to be placed on all articles that enter into commerce. A two or three per cent sales tax on everything you buy could also raise several billion dollars.
Very Noticeable Inconveniences
If either or both of these measures is adopted the government’s credit will be maintained in a sound position, industry can go ahead and “pay-triotically” produce the munitions required to save democracy without worrying about its incentive to produce being destroyed, for there will no longer be any necessity to talk about higher taxes on corporations and excess profits taxes and such annoying things. Isn’t this a small sacrifice to maintain our way of life? Besides, you won’t even notice it. This argument of the reactionaries was given sharp emphasis by the President in his “Aid to Democracies” speech on March 15, when he said, in speaking about everybody sacrificing: “Yes, you will feel the impact of this gigantic effort in your daily lives. You will feel it in a way that will cause lo you many inconveniences.”
And these “inconveniences” will be very, very noticeable: A worker making $25 a week would have $1. deducted from his payroll every week, if the payroll tax goes through. If the national sales tax should also be passed, that will place an additional burden on the worker, who is already having a hard enough struggle to feed, clothe and shelter his wife and children. Assuming that $20 out of a worker’s $25 weekly income spent on goods and services that would be subject to sales tax, that would mean (on the basis of a 2 per cent sales tax) an additional 40 cents a week cut in wages. $1.65 a week, or more, in new taxes may not sound very much, but for a worker getting only $25 a week, this is tremendous sum. someone getting $125 a week or a corporation executive receiving the measly stipend of $2,500 a week can very easily afford to pay five times, or 100 times, what the worker making $25 a week can afford to pay. Both a payroll tax and a sales tax are vicious, reactionary types of taxes. The burden falls most heavily on those who can least afford to pay them. this is a direct violation or the accepted principle of taxation, that taxes should be based on ability to pay.
Moreover, this does not take into account at all the fact that prices are rising and promise to rise much more rapidly in the future. Wholesale commodity prices arc already more than 29 per cent higher than they were at the outbreak of World War II on Sept. 1, 1939. Retail prices are beginning to catch up to wholesale prices. Meat prices have risen, in some cases, more than 25 per cent in the same period. The cost of living on the average throughout the country has gone up more than 3 per cent and will now start to rise in all earnestness. To which must be added the fact that with the establishment of priorities in aluminum and other metals, we will just begin to feel the impact of the war economy in coming months in the form of shortages of many things that the consumer needs.
Some will grant that these new taxes are very unfair, but, they want to know, how else can we pay for the cost of the war program? The answer is simple. The big corporations in 1940 made the highest profits they have made since 1929, even after making deductions for higher taxes. Why not, Mr. President, take these billions of dollars of profits and use them to pay for the cost of your and their “Aid to England” program? And if the 60 families that run this country and control the lion’s share of the wealth won’t turn out munitions to preserve “democracy” unless, they can make their 8, 10 and more per cent profit, WHY NOT, MR. PRESIDENT, HAVE THE GOVERNMENT TAKE OVER THEIR FACTORIES AND PLACE THEM UNDER THE MANAGEMENT OF THE WORKERS?
You won’t do this, Mr. Roosevelt for the simple reason that your desire to defeat Hitler is, and must be, subordinated to your desire to maintain the profit system. If you dared to take any steps against profits, your real bosses – not the American people, but Wall Street and the 60 families – wouldn’t like it. They might even get rid of you as no longer useful to them. We say that you can’t preserve democracy and profits, Mr. President. One or the other will have to go.
And by the way, did you know that while you were speaking about all of us sacrificing to help the cause of democracy (read: American imperialism), your Congress is considering ways and means of lightening the burden of the excess profits tax? Yes, this same excess profits tax that was such a swindle last October that you couldn’t count on it to raise more than a little chicken feed in a year when corporations were making huge profits, is now to be reduced. New exemptions and deductions are to be allowed.
If the meaning of this isn’t clear to you, Mr. Roosevelt, it certainly will be clear to the workers of this country. When you speak of sacrifice, what you mean is that the workers should sacrifice. They should pay for the cost of your war; they should stop striking to improve their conditions so that nothing will interfere with your program of making American imperialism supreme throughout the world. This is pure hypocrisy and we are confident that the workers of this country will recognize it for what it is and will act accordingly.
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<h2>F.L. Demby</h2>
<h1>War Crisis Curbs Strikes in France</h1>
<h4>French Bosses Use National Defense Plans<br>
to Break Strikes and Chain Workers to War Machine</h4>
<h3>(September 1938)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Socialist Appeal</strong>, <a href="../../../../newspape/themilitant/socialist-appeal-1938/index.htm#sa02_39" target="new">Vol. II No. 39</a>, 24 September 1938, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">What has happened to the recent strikes of the French workers against the extension of the working week to 48 hours by the Daladier Government? Two weeks ago the red flag was reported waving over factories in Amiens, a general strike of the 50,000 textile workers was threatening and the Marseilles dock workers were conducting a two-month-old militant strike. Has the French government used the international crisis to mobilize its war apparatus, calling the workers to the colors and thus putting an end to the strike movement? We do know that the National Committee of the C.G.T. (trade union federation) has approved the national defense plans of the bourgeoisie.</p>
<p>The contrast between the morale of the French proletariat today and last year, between the course of the class struggle today and a year ago, is really amazing. Gone is the enthusiasm, spirit and militancy of the French workers. In its place reigns discouragement, disinterestedness in politics, and all the obvious characteristics of a period of social reaction. The miserable showing of July 14 was one example. The steady drift of the workers away from the C.G.T. (General Confederation of Labor) is obviously proof of the reaction.</p>
<p><em>It is easy to read the minds of these workers. They say to themselves: “We had everything. Now we have nothing. We cannot even trust our leaders. Daladier does not represent the People’s Front. Maybe the People’s Front is no good. What can we do? We might just as well enjoy ourselves in the short time that remains before we have to fight against Hitler.” This reaction and chauvinistic sweep is, of course, the logical fruit of the People’s Front. But the French proletariat does not, as a whole, yet understand this elementary truth.</em></p>
<p>It is easy for us to trace the origin and course of this reaction, because we predicted it. It is not so easy to estimate the extent and duration of the reaction. That depends on too many variable factors. True, there is certainly a legitimate economic base for a strike wave at present. But are the present strikes merely the tail-end of the whole preceding period of sharp class struggles, the last desperate gestures on the part of the leaderless workers before the vise of the reaction clamps down completely? Or, on the contrary, do these strikes mark the end of the reaction and the beginnings of a desperate upsurge on the part of the working class? A third element, which cannot be neglected, is the possibility that (as was the case in April of this year when the Blum government fell and the Daladier government came into power) the Communist Party is principally responsible for the strikes.<br>
</p>
<h4>The Hand of the C.P.</h4>
<p class="fst">That the C.P. is the driving force behind the strikes may seem strange, but not if one knows what has been happening recently. We know that the Stalinists did not hesitate to use the magnificent strike action of the French proletariat as blackmail against the French bourgeoisie when they thought that the formation of the Daladier government meant the abandonment of the Franco-Soviet pact and the entry of France into the politics of the Four-Power bloc. We know, too, that the 73 deputies of the C.P. voted for Daladier only on the basis of an agreement that no open steps would be taken by the French bourgeoisie to break the Franco-Soviet Pact during the summer period. If, as is quite, possible the British-French “sell-out” of Czechoslovakia is to be used as a step towards the formation of a Four-Power pact, then the motivation for previous Stalinist-in spired strikes and for the reported present opposition of the C.P. to the Daladier government is definitely understandable.</p>
<p>Aside from the possible repercussions of the international situation upon French domestic affairs, there is, however, another reason which might cause one to suspect the Stalinists. For the past four or five months there has been a steady drift of the French workers away from the C.P. and its periphery apparatus This has been part of, and one of the signs of, the general reaction. Numerically, the C.P. has compensated for these defections to a certain extent by extending its base amongst the petty-bourgeoisie, intellectual and lumpen elements. The bureaucracy, however, knows that not only will they not be able to exert any pressure on the French bourgeoisie if they continue to lose their working-class following, but also that not all the workers who leave their ranks will retire into political inactivity. Some will find their way to the revolutionary ranks, the Fourth International. Hence, in order to keep their following, the Stalinists are forced into action.<br>
</p>
<h4>Economic Battles Inevitable</h4>
<p class="fst">In spite of all the variable factors which play a part in the present struggle in France, and which are so difficult to estimate precisely, it is absolutely inevitable that the present reaction and general discouragement amongst the workers must give way to stormy battles either in the immediate present or in the very near future, unless war intervenes. The economic struggle alone, that is the general and rapid worsening of the living standards of the masses, is forcing the French working class once again onto the path of extra-parliamentary action. A pre-revolutionary situation goes through many ups and downs before the final crisis is reached, but inevitably it merges into a revolutionary crisis.</p>
<p>Whether the progressive elements in the C.G.T. will succeed in calling an extraordinary congress to prepare for the present struggles remains to be seen. The French workers still have time to prepare for their decisive battles these decisive battles might take place before, during or after the war), but their time is becoming increasingly short. The People’s Front has not only wasted valuable time in the last two years, but it has also, while entrenching the reaction, disarmed the workers ideologically, weakened their fighting organizations, criminally sabotaged the struggle in the colonies and placed the officers’ corps (solidly fascist) in a commanding position. What were once very favorable conditions for a revolution in France have become definitely less favorable, due especially to the betrayal of the workers by their leaders.</p>
<p>One thing, however, which must not be overlooked is that the French working class has a long and militant tradition of class struggle behind it. It is definitely anti-fascist. This, of course, is to guarantee that fascism will not triumph in France, but it gives the revolutionary forces an advantage. The fascist movement itself has not grown and, as a matter of fact, has had great difficulty in maintaining its positions. All forces, from extreme left to extreme right, recognize the gravity of the present situation in France, and intimate that they expect decisive battles in the fall.</p>
<p>The present Daladier government will surely fall then, although it is not excluded that Daladier himself will again be chosen to head the new cabinet, this time possibly a national union government. One gets the feeling, however, from a stay in France that, in spite of everything, the biggest unknown factor is what will the French workers do. It is the French working class which will have the decisive say in the coming momentous battles in France, and it is here that the great opportunity for the P.O.I. (French section of the Fourth International) lies.</p>
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F.L. Demby
War Crisis Curbs Strikes in France
French Bosses Use National Defense Plans
to Break Strikes and Chain Workers to War Machine
(September 1938)
From Socialist Appeal, Vol. II No. 39, 24 September 1938, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
What has happened to the recent strikes of the French workers against the extension of the working week to 48 hours by the Daladier Government? Two weeks ago the red flag was reported waving over factories in Amiens, a general strike of the 50,000 textile workers was threatening and the Marseilles dock workers were conducting a two-month-old militant strike. Has the French government used the international crisis to mobilize its war apparatus, calling the workers to the colors and thus putting an end to the strike movement? We do know that the National Committee of the C.G.T. (trade union federation) has approved the national defense plans of the bourgeoisie.
The contrast between the morale of the French proletariat today and last year, between the course of the class struggle today and a year ago, is really amazing. Gone is the enthusiasm, spirit and militancy of the French workers. In its place reigns discouragement, disinterestedness in politics, and all the obvious characteristics of a period of social reaction. The miserable showing of July 14 was one example. The steady drift of the workers away from the C.G.T. (General Confederation of Labor) is obviously proof of the reaction.
It is easy to read the minds of these workers. They say to themselves: “We had everything. Now we have nothing. We cannot even trust our leaders. Daladier does not represent the People’s Front. Maybe the People’s Front is no good. What can we do? We might just as well enjoy ourselves in the short time that remains before we have to fight against Hitler.” This reaction and chauvinistic sweep is, of course, the logical fruit of the People’s Front. But the French proletariat does not, as a whole, yet understand this elementary truth.
It is easy for us to trace the origin and course of this reaction, because we predicted it. It is not so easy to estimate the extent and duration of the reaction. That depends on too many variable factors. True, there is certainly a legitimate economic base for a strike wave at present. But are the present strikes merely the tail-end of the whole preceding period of sharp class struggles, the last desperate gestures on the part of the leaderless workers before the vise of the reaction clamps down completely? Or, on the contrary, do these strikes mark the end of the reaction and the beginnings of a desperate upsurge on the part of the working class? A third element, which cannot be neglected, is the possibility that (as was the case in April of this year when the Blum government fell and the Daladier government came into power) the Communist Party is principally responsible for the strikes.
The Hand of the C.P.
That the C.P. is the driving force behind the strikes may seem strange, but not if one knows what has been happening recently. We know that the Stalinists did not hesitate to use the magnificent strike action of the French proletariat as blackmail against the French bourgeoisie when they thought that the formation of the Daladier government meant the abandonment of the Franco-Soviet pact and the entry of France into the politics of the Four-Power bloc. We know, too, that the 73 deputies of the C.P. voted for Daladier only on the basis of an agreement that no open steps would be taken by the French bourgeoisie to break the Franco-Soviet Pact during the summer period. If, as is quite, possible the British-French “sell-out” of Czechoslovakia is to be used as a step towards the formation of a Four-Power pact, then the motivation for previous Stalinist-in spired strikes and for the reported present opposition of the C.P. to the Daladier government is definitely understandable.
Aside from the possible repercussions of the international situation upon French domestic affairs, there is, however, another reason which might cause one to suspect the Stalinists. For the past four or five months there has been a steady drift of the French workers away from the C.P. and its periphery apparatus This has been part of, and one of the signs of, the general reaction. Numerically, the C.P. has compensated for these defections to a certain extent by extending its base amongst the petty-bourgeoisie, intellectual and lumpen elements. The bureaucracy, however, knows that not only will they not be able to exert any pressure on the French bourgeoisie if they continue to lose their working-class following, but also that not all the workers who leave their ranks will retire into political inactivity. Some will find their way to the revolutionary ranks, the Fourth International. Hence, in order to keep their following, the Stalinists are forced into action.
Economic Battles Inevitable
In spite of all the variable factors which play a part in the present struggle in France, and which are so difficult to estimate precisely, it is absolutely inevitable that the present reaction and general discouragement amongst the workers must give way to stormy battles either in the immediate present or in the very near future, unless war intervenes. The economic struggle alone, that is the general and rapid worsening of the living standards of the masses, is forcing the French working class once again onto the path of extra-parliamentary action. A pre-revolutionary situation goes through many ups and downs before the final crisis is reached, but inevitably it merges into a revolutionary crisis.
Whether the progressive elements in the C.G.T. will succeed in calling an extraordinary congress to prepare for the present struggles remains to be seen. The French workers still have time to prepare for their decisive battles these decisive battles might take place before, during or after the war), but their time is becoming increasingly short. The People’s Front has not only wasted valuable time in the last two years, but it has also, while entrenching the reaction, disarmed the workers ideologically, weakened their fighting organizations, criminally sabotaged the struggle in the colonies and placed the officers’ corps (solidly fascist) in a commanding position. What were once very favorable conditions for a revolution in France have become definitely less favorable, due especially to the betrayal of the workers by their leaders.
One thing, however, which must not be overlooked is that the French working class has a long and militant tradition of class struggle behind it. It is definitely anti-fascist. This, of course, is to guarantee that fascism will not triumph in France, but it gives the revolutionary forces an advantage. The fascist movement itself has not grown and, as a matter of fact, has had great difficulty in maintaining its positions. All forces, from extreme left to extreme right, recognize the gravity of the present situation in France, and intimate that they expect decisive battles in the fall.
The present Daladier government will surely fall then, although it is not excluded that Daladier himself will again be chosen to head the new cabinet, this time possibly a national union government. One gets the feeling, however, from a stay in France that, in spite of everything, the biggest unknown factor is what will the French workers do. It is the French working class which will have the decisive say in the coming momentous battles in France, and it is here that the great opportunity for the P.O.I. (French section of the Fourth International) lies.
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<h2>T.N. Vance</h2>
<h1>A.A. Berle’s Capitalist Revolution</h1>
<h4>Qualitative Changes in American Capitalism</h4>
<h3>(Spring 1955)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">T.N. Vance, <em>A.A. Berle’s Capitalist Revolution</em>, <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni55spr" target="new">Vol. XXI No. 1</a>, Spring 1955, pp. 34–41. (book review)<br>
Transcribed by Ted Crawford.<br>
Marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">While Berle’s <strong>20th Century Capitalist Revolution</strong> <a href="#n1" name="f1">[1]</a> has been loudly criticized by all types of critics as a very shallow and superficial study – one which fundamentally repudiates his basic work on the modern corporation which he wrote together with Means in 1939 – it would be a mistake to dismiss his series of lectures as merely a panegyric in favor of the large corporation and state monopoly capitalism. That, of course, it is, but Berle does succeed in raising some very interesting questions even if he cannot provide the answers.</p>
<p>Moreover, in passing and in developing his general thesis, Berle provides some very interesting and useful information. For example, he quotes fairly extensively from a study on concentration of economic power by Professor M.A. Adelman of Massachusetts Institute of Technology, in which it is stated that “135 corporations own 45 per cent of the industrial assets of the United States – or nearly one-fourth of the manufacturing volume of the entire world. This represents a concentration of economic, ownership greater perhaps than any yet recorded in history.” Adelman seems to be of the opinion that this is a relatively static situation with little change from year to year. Berle indicates at the end that he is not entirely in agreement. It is clear, of course from the current merger movement that the situation is far from static.</p>
<p>Berle is concerned with the fact that in most industries:</p>
<p class="quoteb">“Two or three, or at most, five corporations will have more than half the business, the remainder being divided among a greater or lesser number of smaller concerns who must necessarily live within the conditions made for then by the ‘big two’ or ‘big three’ or ‘big five’ as the case may be.”</p>
<p class="fst">In other words, no matter what figures are cited, as Berle says,</p>
<p class="quoteb">“There will be little dispute however, with the main conclusion: considerably more than half of all American industry – and that the most important half – is operated by ‘concentrates.’ Slightly more than half is owned outright by not more than 200 corporations. This is calculated on the coldest basis – the amount of actual assets owned by the corporations involved.”</p>
<p class="fst">There is, of course, nothing new in this brief description of concentrated capital accumulation in the United States. What is new is Berle’s assertion that progress in the interests of the entire population, not only of the United States but of the world at large, rests upon these 200 private corporations, who are performing a constructive role in helping to organize the entire process of industrial production and distribution. At one point, Berle puts it this way:</p>
<p class="quoteb">“Mid-twentieth-century capitalism has been given the power and the means of more or less planned economy, in which decisions are or at least can be taken in the light of their probable effect on the whole community.”</p>
<p class="fst">In other words, Berle has discovered state monopoly capitalism and has declared that the assumptions of multiple competing units that were the foundation of Adam Smith and classical bourgeois economics no longer hold true. Consequently, the “judgment of the market place” is no longer – in Berle’s opinion the motive power of the economy.</p>
<p>Berle also perform a useful function in calling attention to the study by the National City Bank on sources of capital accumulation. This study covering the eight years from 1946 through 1953, estimates that a total of $150 billion was spent for what might termed capital expenditures, namely, modernizing and enlarging plant and equipment. Sixty-four per cent of the total of $150 billion came from “internal sources” – that is to say from – surplus and depreciation reserves. Of the total of $99 billion financed through such “internal sources,”retained earnings were by far the largest proportion. Of the remaining $51 billion, or 36 per cent of the total, according to Berle, one-half was raised by current borrowing, chiefly bank credit. This accounts for about $25½ billion.</p>
<p>Of the remainder, $18 billion or 12 per cent of the grand total was raised by issue of bonds or notes. Although half of this amount was probably privately placed, Berle is willing to admit that a large portion of this capital was forced to run the gauntlet of so-called “market-place judgment” The astonishing fact is that “6 per cent or $9 billion out of a total of $150 billion was raised by issue of stock, Here, and here only, do we begin to approach the ‘risk capital’ investment so much relied on by classic economic theory. Even here a considerable amount was as far removed from ‘risk’ as the situation permitted: without exact figures, apparently a majority of the $9 billion was represented by preferred stock. Probably not more than $5 billion of the total amount was represented by common stock – the one situation in which an investor considers an enterprise, decides on its probable usefulness and profitability, and puts down his savings, aware of a degree of risk but hoping for large profit.</p>
<p class="quoteb">“There is substantial evidence, which need not be reviewed here, that this is representative of the real pattern of the twentieth-century capitalism. <em>The capital is there; and so is capitalism. The waning factor is the capitalist. He has somehow vanished in great measure from the picture, and with him has vanished much of the controlling force of his market-place judgment.</em> He is not extinct: roughly a billion dollars a year (say five per cent of total savings) is invested by him; but he is no longer a decisive force. In his place stand the boards of directors of corporations, chiefly large ones, who retain profits and risk them in expansion of the business along lines indicated by the circumstances of their particular operation. Not the public opinion of the market place with all the economic world from which to choose, but the directorial opinion of corporate managers as to the line of greatest opportunity within their own concern, now chiefly determines the application of risk capital. <em>Major corporations in most in-stances do not seek capital. They form it themselves</em>.” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The existence of what is sometimes termed monopolistic competition or oligopoly or any of the other choice phrases used, does not of course mean that capitalists no longer exist. But Berle is correct in pointing out that capitalism has changed its form considerably during the twentieth century, and capitalism has introduced an aspect of planning which was surely not envisaged by Marx or early Marxists.</p>
<p>There is, above all, the role of the state which makes present-day capitalism differ qualitatively from nineteenth or even very early twentieth-century capitalism. Berle correctly points out, for example, that “the development of atomic energy, perhaps the crest of the next great wave in modern development, was not socialist by theory or by design. It was twentieth-century capitalism in respect of which the government played a major part, as it will continue to do.”</p>
<p>The role of the state in modern state monopoly capitalism in the United States is not confined to Democratic administrations. There has been no significant change under the present Republican administration either in fact or in theory.</p>
<p>As a matter of fact, even in Eisenhower’s Economic Report to Congress of January 20, 1955, which is devoted mainly to assuring the bourgeoisie that everything is fine and there is really very little to worry about, there is a type of recognition of the role of the state which certainly could not have been present in any official document of the last Republican administration. The economic report, after raising various questions concerning the shortness and mildness of the recent economic decline, implies that the government, i.e., the state, is really the factor that is different in the situation today and basically responsible for preventing a severe depression along classical lines. The report states:</p>
<p class="quoteb">“Clearly, many people had a part in stemming the economic decline and easing the readjustment from war to peace. The Federal government also contributed significantly to the process of recovery. It influenced the economy in two principal ways, first, through the automatic workings of the fiscal system, second, by deliberately pursuing monetary, tax, and expenditure policies that inspired widespread confidence on the part of the people and thus helped them to act in ways that were economically constructive.”</p>
<p class="fst">There can be little doubt that so-called fiscal policy, especially with reference to tax structure, and monetary and credit policy, did enable the state to play a constructive role in so far as helping to maintain general economic, equilibrium is concerned. The important word, however, in the passage quoted above is the word “expenditure” for it relates to government expenditures and here we find ourselves face to face with reality. What type of recovery from the so-called recession 1958-54 would have taken place had Federal government not been spending $50 billion or more per year on war outlays? It suffices to raise the question to realize that none of the platitudes of the theoreticians of the bourgeoisie can begin to cope with the recent situation. The economy is maintaining itself and giving an outward appearance of health – although inwardly extremely sick – only because capitalism has entered what we have previously described as the stage of Permanent War Economy.</p>
<p>That is why it is somewhat pathetic to find an outstanding bourgeois economist like Sumner Slichter of Harvard state in the current issue of the <strong>Harvard Business Review</strong> that the old-fashioned business cycle has in effect disappeared. The implication would seem to be that American capitalists have become super-intelligent and can now eliminate depressions. Slichter refers to many points in reaching this rather remarkable conclusion, such as developments in the financing of construction, and the so-called development of individual cycles of different industries. He also refers to the fact that durable goods industries “will at all times have a far higher ratio of unfilled orders to sales and inventories than prevailed in pre-Korean days.” One reason for this, according to the <strong>New York Times</strong> of January 23, 1955, is “the defense program ... [but] .. . even if diplomacy in the next few years succeeds in substantially mitigating the vigor of the cold war, I suspect that the volume of unfilled orders in the durable goods industry will be kept high simply as a matter of national policy.”</p>
<p>Slichter continues, according to the <strong>New York Times</strong>, by stating:</p>
<p class="quoteb">“In the unlikely event that a large additional drop in defense spending becomes possible, the country will probably offset the drop in defense spending by a long-term development program.”</p>
<p class="fst">What Slichter is saying, of course, is that the state will continue to support the Permanent War Economy – and if, in the unlikely event that international economic conditions change so as to render socially unnecessary the large-scale expenditures in the means of destruction, then the state will find other types of investments which will help to maintain the economy. Here he is reverting to a theory which he promulgated about 1930-31 which, had he been right then, would have meant that it would have been impossible for mass unemployment to have developed. Slichter is no more right today than he was in the 1930’s. The only socially acceptable large-scale state expenditures are those which do not compete with private capital and those which are absolutely and unmistakably essential to the preservation of the capitalist class. Such expenditures, so far, have only been found in the new third category of economic investment, namely, means of destruction. Yet, we should not lose sight of the fact that one of the essentials of state monopoly capitalism is that there is an unusual degree of state intervention in the economy which permits achieving stability, or relative stability, in many cases that could not have previously been attained. Of course, to do this the capitalists must have the support of other sections of the population, particularly of the labor movement. So far this has not been difficult for them to achieve.</p>
<p>What will happen during the year 1955 and into 1956 as the pressure of mass unemployment constantly grows remains to be seen. Already, there are signs that the leadership is being forced to take cognizance of the fact that there are several million unemployed and that these are not people who are superfluous to the normal functionings of capitalism – but who have been rendered superfluous by the very rapid accumulation of capital which, as Marx pointed out, necessarily brings about a certain increase in the industrial reserve army.</p>
<p>Or, as we have demonstrated previously, under the Permanent War Economy the basic Marxism law of accumulation of capital becomes transformed into a relative decline in the standard of living rather than an absolute increase in unemployment but as we have had occasion more recently to point out, this holds only when there is a steady increase in the ratio of war outlays. At the present time the ratio of war outlays has been declining, if only slightly, so that whereas a year ago it ran around 17 per cent, today it is down to around 15 per cent. The pressures that develop, particularly in basic industries, are apparent in such cities and industrial centers as Detroit, Pittsburgh, etc.</p>
<p>A process of attrition has developed. To revert to our analogy used in our original presentation of the nature and structure of the Permanent War Economy (see Part III, <a href="../../1951/permwar/part3.htm" target="new"><em>Increasing State Intervention</em></a>, <strong>New International</strong>, May–June 1951):</p>
<p class="quoteb">“The restoration of the rate of profit could not be followed by an abandonment of state intervention. On the contrary, like a patient who has recovered from an almost fatal illness solely by taking medicine containing habit-forming drugs, the enduring ‘health’ of capitalism demands the continuation of the ‘habit-forming drug’ of state intervention. This becomes obvious as the economy of depression is followed by the Permanent War Economy. There are differences, however. Not only is state intervention more expensive, but it is no longer confined to restoring the profitability of ‘sick’ industries: The most decisive sections of capital are subjected to state control and direction, but the reward is the virtual guarantee of the profits of the bourgeoisie as a class.”</p>
<p class="fst">To maintain the precarious equilibrium that exists, constantly increasing state intervention is necessary. This is a fundamental law of the present epoch of capitalism – the Permanent War Economy. Not even Old Guard Republicans can defy this law and escape its consequences. Thus, we have the Eisenhower Administration talking about a 100 billion program for road building, and similar measures – most of which will naturally remain confined to paper and which will be trotted out every year around November when elections take place. There will, however, be state intervention in the economy so long as it is within the power of the bourgeoisie to use this new weapon to preserve its own historically outmoded system.</p>
<p>Not all bourgeois economists are optimistic about the outlook for economy as a whole as the official prognosticators in Washington. For example, an article in the <strong>New York Times</strong> under date of January 27, 1955 is headlined, <em>Economists Wary of Business in ’55</em>. The sub-headline is even more to the point: <em>Their Testimony Casts Doubt on Eisenhower Optimism</em>. There were eight private economists who testified before the Joint Congressional Committee on the Economic Report and not all of them represented the trade-union movement. They all appeared to be worried by what in some quarters is loosely referred to as automation which is simply a high-sounding public relations word for a process which has been going on for many years – even if it is accelerating now in certain industries and results in an increasingly high organic composition of capital. This is inherent in the nature of capitalism and should not cause surprise to those who presumably understand, more or less, how the capitalist system operates. It means that in a situation where business as a whole is good, where the bourgeoisie is making very high profits, there could be mass unemployment amounting very easily to a figure of 5,000,000 at the end of 1955. This gives rise not only to much uneasiness within the labor movement and pressures on the labor bureaucracy to do something about it, so that they in turn begin to exert pressure on Washington, but it also gives rise to such phenomena which are appropriate for this period in the form of renewed promises to investigate the “new trend toward monopoly and the concentration of economic power.” There will be, without question, many types of Congressional investigations this field. Whether any of them will add materially to the work of the temporary National Economic Committee remains to be seen, but the <strong>New York Times</strong> of January 24 reports that the sub-committee of the Committee of the Judiciary, in a report submitted by its majority, Senators Langer, Kefauver and Kilgore, stated that their hearings had lead them to two conclusions:</p>
<p class="quoteb">“(1) That there is a two-pronged drive by private monopoly to destroy public competition in the power business, and that the Dixon-Yates contract is a part of that drive. (2) The Wall Street domination of the power industry has revived many of the monopolistic holding company evils which Congress sought by legislation to suppress, particularly the extension of monopoly control over very wide regions.”</p>
<p class="fst">Here we have the makings of a great debate which may very well play an important role in the elections of 1956.</p>
<p>Mr. Berle, however, would answer to all of this that while the large corporation must adopt a conscience comparable to that of the king in feudal days, it is the engine of progress not only in domestic affairs but in international affairs. It is at this point that Mr. Berle, trying to pursue a pre-conceived thesis, becomes a simple apologist for state monopoly capitalism in its most rapacious form, with its justification of the oil cartels and similar international agreements.</p>
<p>He still, however, manages to flirt with important thoughts when he virtually concludes his essay by stating:</p>
<p class="quoteb">“Corporations still have, perhaps, some range of choice: they can either take an extended view of their responsibility, or a limited one. Yet the choice is probably less free than would appear. Power has laws of its own. One of them is that when one group having power declines or abdicates it, some other directing group immediately picks it up; and this appears constant throughout history. The choice of corporate management is not whether so great a power shall cease to exist; they can merely determine whether they will serve as the nuclei of its organization or pass it over to someone else, probably the modern state.”</p>
<p class="fst">Since the power of the state should be kept to a minimum, according to Berle and the traditional liberal philosophy, it is obvious that corporate power must be built up and maintained, but the corporate managers should please have a social conscience to that it would really be true for the former president of General Motors to say that “What is good for General Motors is good for the country.”</p>
<p>Sermons are interesting to those who like them but only in their proper place, and an essay on the twentieth-century capitalist revolution is hardly the place for Berle’s type of propagandistic sermon. His critics, however, have sufficiently well disposed of him so that we can merely state that there has been a type of revolution in the twentieth century but Berle doesn’t understand its nature, its causes or its probable results.</p>
<p>The constant decline in factory employment focuses attention on one of the major problems of American capitalism – and one for which there is no solution in sight. PWE (permanent war economy) or WPA (work relief projects) have actually been the only two solutions that capitalism has had to offer for the last 25 years. An entire generation has grown up and come to maturity which can only know from reading, but never from experience, what the old capitalism was like. This does not make the new capitalism less capitalist, but it does mean that some of its laws of motion and methods of operation are different and require analysis and understanding – especially by socialists.</p>
<p>Symptomatic of danger ahead for the economy, is a most interesting article that was published in the <strong>New York Times</strong> of September 20, 1954. The heading was <em>Per Capita Output Only 1 per cent Above ’47</em>. This is an article by one of the <strong>New York Times</strong>’ economic reporters, Burton Crane, and one which is highly recommended to Mr. Berle and to all students of the economy. It is worth quoting from fairly extensively:</p>
<p class="quoteb">Per capita industrial production in this country has dropped so sharply in the last year that it is only 1 per cent above the average rate for 1947 ...</p>
<p class="quote">The question facing the economy is whether industrial production and gross national product can be allowed to fall farther below the normal trend. <em>Our economy, as observers of all shades of political thought have pointed out, works best when it is expanding. Signs that the dynamism had disappeared might discourage investors from risking their capital and dissuade industrialists from expanding their enterprises</em>.</p>
<p class="quote">There are warnings that such attitudes may be in prospect. Expenditures for new plant and equipment, expressed in constant dollars and weighted for population changes, in the first half of 1954 were at 113 per cent of the 1947 level. In the two preceding years they had been at 116 and 123 per cent.</p>
<p class="quote">What is the normal upward trend in our economy due to growing mechanization and efficiency? Some economists have set it as high as 3.5 per cent for manufacturing production. At that annual improvement factor, per capita industrial production in 1954 should be at 127.2 per cent of 1947 output. It is at 101 per cent. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The twentieth-century capitalist revolution is thus not so earth-shaking as would appear from Mr. Berle’s panegyric. It has not solved the problem of unemployment. Here is one of the essential contradictions of capitalism under the Permanent War Economy only where, with attrition setting in, some of the basic laws of capitalism begin to reassert themselves. The economy must constantly grow and expand, at least to the point where it can support the 600,000 to 700,000 new entrants into the labor force each year. This it is obviously failing to do. Moreover, the two prime sources of economic infection, the agricultural crisis and the crisis in consumer durable goods (centering in the automobile industry), clearly remain – with no alleviation in sight. Many factors have been responsible for the rapid increase in population, and it is clear that the Permanent War Economy is intimately connected with this sociological phenomenon. The increase in population in turn, however, gives rise to the very correct analysis of Mr. Crane, quoted above, that only a per capita approach becomes meaningful in appraising the economy, its performance and its outlook. The American economy is simply not suited, nor large enough (on a capitalist basis) to provide the constantly expanding market that is required to sustain an expanding capitalism.</p>
<p>We are, therefore, back where we started and Mr. Berle is at least partially aware of this central problem when he speaks of “<em>A modern corporation thus has become an international as well as a national instrument</em>.” And when he observes that, “<em>The present political framework of foreign affairs is nationalist. The present economic base is not. The classic nation-state is no longer capable, by itself alone, either to feed and clothe its people, or to defend its own borders.</em>” (Italics mine – <em>T.N.V.</em>)</p>
<p>Here, then, is the central fact of the modern capitalist “revolution.” Capitalism has visibly, before our very eyes, outgrown its national framework and must burst this integument asunder in one form or another. The only question that history must still answer is the form in which the capitalist national state will be destroyed and the nature of the political organization that will succeed it.</p>
<p class="author">T.N. Vance<br>
</p>
<p> </p>
<h3>Footnote</h3>
<p class="note"><a href="#f1" name="n1">1.</a> <strong>The 20th Century Capitalist Revolution</strong>, <em>by A.A. Berle, Jr.</em>, Harcourt, Brace and Company, New York City, 1951, 192 pp. $3.00.</p>
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T.N. Vance
A.A. Berle’s Capitalist Revolution
Qualitative Changes in American Capitalism
(Spring 1955)
T.N. Vance, A.A. Berle’s Capitalist Revolution, The New International, Vol. XXI No. 1, Spring 1955, pp. 34–41. (book review)
Transcribed by Ted Crawford.
Marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
While Berle’s 20th Century Capitalist Revolution [1] has been loudly criticized by all types of critics as a very shallow and superficial study – one which fundamentally repudiates his basic work on the modern corporation which he wrote together with Means in 1939 – it would be a mistake to dismiss his series of lectures as merely a panegyric in favor of the large corporation and state monopoly capitalism. That, of course, it is, but Berle does succeed in raising some very interesting questions even if he cannot provide the answers.
Moreover, in passing and in developing his general thesis, Berle provides some very interesting and useful information. For example, he quotes fairly extensively from a study on concentration of economic power by Professor M.A. Adelman of Massachusetts Institute of Technology, in which it is stated that “135 corporations own 45 per cent of the industrial assets of the United States – or nearly one-fourth of the manufacturing volume of the entire world. This represents a concentration of economic, ownership greater perhaps than any yet recorded in history.” Adelman seems to be of the opinion that this is a relatively static situation with little change from year to year. Berle indicates at the end that he is not entirely in agreement. It is clear, of course from the current merger movement that the situation is far from static.
Berle is concerned with the fact that in most industries:
“Two or three, or at most, five corporations will have more than half the business, the remainder being divided among a greater or lesser number of smaller concerns who must necessarily live within the conditions made for then by the ‘big two’ or ‘big three’ or ‘big five’ as the case may be.”
In other words, no matter what figures are cited, as Berle says,
“There will be little dispute however, with the main conclusion: considerably more than half of all American industry – and that the most important half – is operated by ‘concentrates.’ Slightly more than half is owned outright by not more than 200 corporations. This is calculated on the coldest basis – the amount of actual assets owned by the corporations involved.”
There is, of course, nothing new in this brief description of concentrated capital accumulation in the United States. What is new is Berle’s assertion that progress in the interests of the entire population, not only of the United States but of the world at large, rests upon these 200 private corporations, who are performing a constructive role in helping to organize the entire process of industrial production and distribution. At one point, Berle puts it this way:
“Mid-twentieth-century capitalism has been given the power and the means of more or less planned economy, in which decisions are or at least can be taken in the light of their probable effect on the whole community.”
In other words, Berle has discovered state monopoly capitalism and has declared that the assumptions of multiple competing units that were the foundation of Adam Smith and classical bourgeois economics no longer hold true. Consequently, the “judgment of the market place” is no longer – in Berle’s opinion the motive power of the economy.
Berle also perform a useful function in calling attention to the study by the National City Bank on sources of capital accumulation. This study covering the eight years from 1946 through 1953, estimates that a total of $150 billion was spent for what might termed capital expenditures, namely, modernizing and enlarging plant and equipment. Sixty-four per cent of the total of $150 billion came from “internal sources” – that is to say from – surplus and depreciation reserves. Of the total of $99 billion financed through such “internal sources,”retained earnings were by far the largest proportion. Of the remaining $51 billion, or 36 per cent of the total, according to Berle, one-half was raised by current borrowing, chiefly bank credit. This accounts for about $25½ billion.
Of the remainder, $18 billion or 12 per cent of the grand total was raised by issue of bonds or notes. Although half of this amount was probably privately placed, Berle is willing to admit that a large portion of this capital was forced to run the gauntlet of so-called “market-place judgment” The astonishing fact is that “6 per cent or $9 billion out of a total of $150 billion was raised by issue of stock, Here, and here only, do we begin to approach the ‘risk capital’ investment so much relied on by classic economic theory. Even here a considerable amount was as far removed from ‘risk’ as the situation permitted: without exact figures, apparently a majority of the $9 billion was represented by preferred stock. Probably not more than $5 billion of the total amount was represented by common stock – the one situation in which an investor considers an enterprise, decides on its probable usefulness and profitability, and puts down his savings, aware of a degree of risk but hoping for large profit.
“There is substantial evidence, which need not be reviewed here, that this is representative of the real pattern of the twentieth-century capitalism. The capital is there; and so is capitalism. The waning factor is the capitalist. He has somehow vanished in great measure from the picture, and with him has vanished much of the controlling force of his market-place judgment. He is not extinct: roughly a billion dollars a year (say five per cent of total savings) is invested by him; but he is no longer a decisive force. In his place stand the boards of directors of corporations, chiefly large ones, who retain profits and risk them in expansion of the business along lines indicated by the circumstances of their particular operation. Not the public opinion of the market place with all the economic world from which to choose, but the directorial opinion of corporate managers as to the line of greatest opportunity within their own concern, now chiefly determines the application of risk capital. Major corporations in most in-stances do not seek capital. They form it themselves.” (Italics mine – T.N.V.)
The existence of what is sometimes termed monopolistic competition or oligopoly or any of the other choice phrases used, does not of course mean that capitalists no longer exist. But Berle is correct in pointing out that capitalism has changed its form considerably during the twentieth century, and capitalism has introduced an aspect of planning which was surely not envisaged by Marx or early Marxists.
There is, above all, the role of the state which makes present-day capitalism differ qualitatively from nineteenth or even very early twentieth-century capitalism. Berle correctly points out, for example, that “the development of atomic energy, perhaps the crest of the next great wave in modern development, was not socialist by theory or by design. It was twentieth-century capitalism in respect of which the government played a major part, as it will continue to do.”
The role of the state in modern state monopoly capitalism in the United States is not confined to Democratic administrations. There has been no significant change under the present Republican administration either in fact or in theory.
As a matter of fact, even in Eisenhower’s Economic Report to Congress of January 20, 1955, which is devoted mainly to assuring the bourgeoisie that everything is fine and there is really very little to worry about, there is a type of recognition of the role of the state which certainly could not have been present in any official document of the last Republican administration. The economic report, after raising various questions concerning the shortness and mildness of the recent economic decline, implies that the government, i.e., the state, is really the factor that is different in the situation today and basically responsible for preventing a severe depression along classical lines. The report states:
“Clearly, many people had a part in stemming the economic decline and easing the readjustment from war to peace. The Federal government also contributed significantly to the process of recovery. It influenced the economy in two principal ways, first, through the automatic workings of the fiscal system, second, by deliberately pursuing monetary, tax, and expenditure policies that inspired widespread confidence on the part of the people and thus helped them to act in ways that were economically constructive.”
There can be little doubt that so-called fiscal policy, especially with reference to tax structure, and monetary and credit policy, did enable the state to play a constructive role in so far as helping to maintain general economic, equilibrium is concerned. The important word, however, in the passage quoted above is the word “expenditure” for it relates to government expenditures and here we find ourselves face to face with reality. What type of recovery from the so-called recession 1958-54 would have taken place had Federal government not been spending $50 billion or more per year on war outlays? It suffices to raise the question to realize that none of the platitudes of the theoreticians of the bourgeoisie can begin to cope with the recent situation. The economy is maintaining itself and giving an outward appearance of health – although inwardly extremely sick – only because capitalism has entered what we have previously described as the stage of Permanent War Economy.
That is why it is somewhat pathetic to find an outstanding bourgeois economist like Sumner Slichter of Harvard state in the current issue of the Harvard Business Review that the old-fashioned business cycle has in effect disappeared. The implication would seem to be that American capitalists have become super-intelligent and can now eliminate depressions. Slichter refers to many points in reaching this rather remarkable conclusion, such as developments in the financing of construction, and the so-called development of individual cycles of different industries. He also refers to the fact that durable goods industries “will at all times have a far higher ratio of unfilled orders to sales and inventories than prevailed in pre-Korean days.” One reason for this, according to the New York Times of January 23, 1955, is “the defense program ... [but] .. . even if diplomacy in the next few years succeeds in substantially mitigating the vigor of the cold war, I suspect that the volume of unfilled orders in the durable goods industry will be kept high simply as a matter of national policy.”
Slichter continues, according to the New York Times, by stating:
“In the unlikely event that a large additional drop in defense spending becomes possible, the country will probably offset the drop in defense spending by a long-term development program.”
What Slichter is saying, of course, is that the state will continue to support the Permanent War Economy – and if, in the unlikely event that international economic conditions change so as to render socially unnecessary the large-scale expenditures in the means of destruction, then the state will find other types of investments which will help to maintain the economy. Here he is reverting to a theory which he promulgated about 1930-31 which, had he been right then, would have meant that it would have been impossible for mass unemployment to have developed. Slichter is no more right today than he was in the 1930’s. The only socially acceptable large-scale state expenditures are those which do not compete with private capital and those which are absolutely and unmistakably essential to the preservation of the capitalist class. Such expenditures, so far, have only been found in the new third category of economic investment, namely, means of destruction. Yet, we should not lose sight of the fact that one of the essentials of state monopoly capitalism is that there is an unusual degree of state intervention in the economy which permits achieving stability, or relative stability, in many cases that could not have previously been attained. Of course, to do this the capitalists must have the support of other sections of the population, particularly of the labor movement. So far this has not been difficult for them to achieve.
What will happen during the year 1955 and into 1956 as the pressure of mass unemployment constantly grows remains to be seen. Already, there are signs that the leadership is being forced to take cognizance of the fact that there are several million unemployed and that these are not people who are superfluous to the normal functionings of capitalism – but who have been rendered superfluous by the very rapid accumulation of capital which, as Marx pointed out, necessarily brings about a certain increase in the industrial reserve army.
Or, as we have demonstrated previously, under the Permanent War Economy the basic Marxism law of accumulation of capital becomes transformed into a relative decline in the standard of living rather than an absolute increase in unemployment but as we have had occasion more recently to point out, this holds only when there is a steady increase in the ratio of war outlays. At the present time the ratio of war outlays has been declining, if only slightly, so that whereas a year ago it ran around 17 per cent, today it is down to around 15 per cent. The pressures that develop, particularly in basic industries, are apparent in such cities and industrial centers as Detroit, Pittsburgh, etc.
A process of attrition has developed. To revert to our analogy used in our original presentation of the nature and structure of the Permanent War Economy (see Part III, Increasing State Intervention, New International, May–June 1951):
“The restoration of the rate of profit could not be followed by an abandonment of state intervention. On the contrary, like a patient who has recovered from an almost fatal illness solely by taking medicine containing habit-forming drugs, the enduring ‘health’ of capitalism demands the continuation of the ‘habit-forming drug’ of state intervention. This becomes obvious as the economy of depression is followed by the Permanent War Economy. There are differences, however. Not only is state intervention more expensive, but it is no longer confined to restoring the profitability of ‘sick’ industries: The most decisive sections of capital are subjected to state control and direction, but the reward is the virtual guarantee of the profits of the bourgeoisie as a class.”
To maintain the precarious equilibrium that exists, constantly increasing state intervention is necessary. This is a fundamental law of the present epoch of capitalism – the Permanent War Economy. Not even Old Guard Republicans can defy this law and escape its consequences. Thus, we have the Eisenhower Administration talking about a 100 billion program for road building, and similar measures – most of which will naturally remain confined to paper and which will be trotted out every year around November when elections take place. There will, however, be state intervention in the economy so long as it is within the power of the bourgeoisie to use this new weapon to preserve its own historically outmoded system.
Not all bourgeois economists are optimistic about the outlook for economy as a whole as the official prognosticators in Washington. For example, an article in the New York Times under date of January 27, 1955 is headlined, Economists Wary of Business in ’55. The sub-headline is even more to the point: Their Testimony Casts Doubt on Eisenhower Optimism. There were eight private economists who testified before the Joint Congressional Committee on the Economic Report and not all of them represented the trade-union movement. They all appeared to be worried by what in some quarters is loosely referred to as automation which is simply a high-sounding public relations word for a process which has been going on for many years – even if it is accelerating now in certain industries and results in an increasingly high organic composition of capital. This is inherent in the nature of capitalism and should not cause surprise to those who presumably understand, more or less, how the capitalist system operates. It means that in a situation where business as a whole is good, where the bourgeoisie is making very high profits, there could be mass unemployment amounting very easily to a figure of 5,000,000 at the end of 1955. This gives rise not only to much uneasiness within the labor movement and pressures on the labor bureaucracy to do something about it, so that they in turn begin to exert pressure on Washington, but it also gives rise to such phenomena which are appropriate for this period in the form of renewed promises to investigate the “new trend toward monopoly and the concentration of economic power.” There will be, without question, many types of Congressional investigations this field. Whether any of them will add materially to the work of the temporary National Economic Committee remains to be seen, but the New York Times of January 24 reports that the sub-committee of the Committee of the Judiciary, in a report submitted by its majority, Senators Langer, Kefauver and Kilgore, stated that their hearings had lead them to two conclusions:
“(1) That there is a two-pronged drive by private monopoly to destroy public competition in the power business, and that the Dixon-Yates contract is a part of that drive. (2) The Wall Street domination of the power industry has revived many of the monopolistic holding company evils which Congress sought by legislation to suppress, particularly the extension of monopoly control over very wide regions.”
Here we have the makings of a great debate which may very well play an important role in the elections of 1956.
Mr. Berle, however, would answer to all of this that while the large corporation must adopt a conscience comparable to that of the king in feudal days, it is the engine of progress not only in domestic affairs but in international affairs. It is at this point that Mr. Berle, trying to pursue a pre-conceived thesis, becomes a simple apologist for state monopoly capitalism in its most rapacious form, with its justification of the oil cartels and similar international agreements.
He still, however, manages to flirt with important thoughts when he virtually concludes his essay by stating:
“Corporations still have, perhaps, some range of choice: they can either take an extended view of their responsibility, or a limited one. Yet the choice is probably less free than would appear. Power has laws of its own. One of them is that when one group having power declines or abdicates it, some other directing group immediately picks it up; and this appears constant throughout history. The choice of corporate management is not whether so great a power shall cease to exist; they can merely determine whether they will serve as the nuclei of its organization or pass it over to someone else, probably the modern state.”
Since the power of the state should be kept to a minimum, according to Berle and the traditional liberal philosophy, it is obvious that corporate power must be built up and maintained, but the corporate managers should please have a social conscience to that it would really be true for the former president of General Motors to say that “What is good for General Motors is good for the country.”
Sermons are interesting to those who like them but only in their proper place, and an essay on the twentieth-century capitalist revolution is hardly the place for Berle’s type of propagandistic sermon. His critics, however, have sufficiently well disposed of him so that we can merely state that there has been a type of revolution in the twentieth century but Berle doesn’t understand its nature, its causes or its probable results.
The constant decline in factory employment focuses attention on one of the major problems of American capitalism – and one for which there is no solution in sight. PWE (permanent war economy) or WPA (work relief projects) have actually been the only two solutions that capitalism has had to offer for the last 25 years. An entire generation has grown up and come to maturity which can only know from reading, but never from experience, what the old capitalism was like. This does not make the new capitalism less capitalist, but it does mean that some of its laws of motion and methods of operation are different and require analysis and understanding – especially by socialists.
Symptomatic of danger ahead for the economy, is a most interesting article that was published in the New York Times of September 20, 1954. The heading was Per Capita Output Only 1 per cent Above ’47. This is an article by one of the New York Times’ economic reporters, Burton Crane, and one which is highly recommended to Mr. Berle and to all students of the economy. It is worth quoting from fairly extensively:
Per capita industrial production in this country has dropped so sharply in the last year that it is only 1 per cent above the average rate for 1947 ...
The question facing the economy is whether industrial production and gross national product can be allowed to fall farther below the normal trend. Our economy, as observers of all shades of political thought have pointed out, works best when it is expanding. Signs that the dynamism had disappeared might discourage investors from risking their capital and dissuade industrialists from expanding their enterprises.
There are warnings that such attitudes may be in prospect. Expenditures for new plant and equipment, expressed in constant dollars and weighted for population changes, in the first half of 1954 were at 113 per cent of the 1947 level. In the two preceding years they had been at 116 and 123 per cent.
What is the normal upward trend in our economy due to growing mechanization and efficiency? Some economists have set it as high as 3.5 per cent for manufacturing production. At that annual improvement factor, per capita industrial production in 1954 should be at 127.2 per cent of 1947 output. It is at 101 per cent. (Italics mine – T.N.V.)
The twentieth-century capitalist revolution is thus not so earth-shaking as would appear from Mr. Berle’s panegyric. It has not solved the problem of unemployment. Here is one of the essential contradictions of capitalism under the Permanent War Economy only where, with attrition setting in, some of the basic laws of capitalism begin to reassert themselves. The economy must constantly grow and expand, at least to the point where it can support the 600,000 to 700,000 new entrants into the labor force each year. This it is obviously failing to do. Moreover, the two prime sources of economic infection, the agricultural crisis and the crisis in consumer durable goods (centering in the automobile industry), clearly remain – with no alleviation in sight. Many factors have been responsible for the rapid increase in population, and it is clear that the Permanent War Economy is intimately connected with this sociological phenomenon. The increase in population in turn, however, gives rise to the very correct analysis of Mr. Crane, quoted above, that only a per capita approach becomes meaningful in appraising the economy, its performance and its outlook. The American economy is simply not suited, nor large enough (on a capitalist basis) to provide the constantly expanding market that is required to sustain an expanding capitalism.
We are, therefore, back where we started and Mr. Berle is at least partially aware of this central problem when he speaks of “A modern corporation thus has become an international as well as a national instrument.” And when he observes that, “The present political framework of foreign affairs is nationalist. The present economic base is not. The classic nation-state is no longer capable, by itself alone, either to feed and clothe its people, or to defend its own borders.” (Italics mine – T.N.V.)
Here, then, is the central fact of the modern capitalist “revolution.” Capitalism has visibly, before our very eyes, outgrown its national framework and must burst this integument asunder in one form or another. The only question that history must still answer is the form in which the capitalist national state will be destroyed and the nature of the political organization that will succeed it.
T.N. Vance
Footnote
1. The 20th Century Capitalist Revolution, by A.A. Berle, Jr., Harcourt, Brace and Company, New York City, 1951, 192 pp. $3.00.
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<h2>Frank Demby</h2>
<h1>New Price Bill Fails to Solve the Problem<br>
of the Rising Cost of Living</h1>
<h3>(December 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_49" target="new">Vol. 5 No. 49</a>, 8 December 1941, p. 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">Faced with the dilemma of serious price inflation or taking “steps in the direction of establishing totalitarian controls, the House of Representatives passed a weak-kneed compromise last Friday by, a vote of 224 to 161. After some fancy political maneuvering, the question of price control raised as long ago as last July, has now been referred to the Senate where, it is expected, a “real” price control bill will be passed.</p>
<p>The House bill declares that in the interests of “national defense” it is necessary to prevent price and credit inflation. Its provisions, however, cannot possibly achieve this objective. In fact, if the House bill becomes law it will definitely result in <em>further substantial increases in prices. As always, the working people will suffer.</em><br>
</p>
<h4>Farm Bloc Blackmail</h4>
<p class="fst">The congressional farm bloc, operating in the interests of the rich commercial farmers, has put into the bill a provision concerning, the prices of farm products that constitutes one of the best illustrations of congressional blackmail in a long, long time. A ceiling is to be established on farm prices, but this upper limit cannot be lower than the highest of the following three levels:</p>
<ol>
<li><em>A price equal to 110 per cent of parity;</em></li>
<li><em>The market price prevailing on October 1, 1941;</em></li>
<li><em>The average price for the period 1919–1929.</em></li>
</ol>
<p class="fst">The original draft of the price control bill called for a ceiling on farm prices to be based on the price as of July 28, 1941, or 100 per cent of parity, whichever was higher. Parity, as I have previously explained, was the slogan of the Farm Bureau, to give the commercial farmers the same purchasing power as they possessed in the period from 1909–1914, which is the highest on record for the 20th century.</p>
<p><em>This meant, in many cases, price increases above those existing on July 28 running from 10 to 30 per cent.</em> And, of course, prices on July 28 already reflected a substantial wartime inflation. While the House Banking and Currency Committee deliberately stalled for several months, under the pretext of a “thorough” consideration of the matter of price control, prices rose substantially. This prompted the farm bloc to demand that the prevailing price level be changed from July 28 to October 1. Not satisfied with this, and being in the position to hold up indefinitely any legislation at all unless its demands were granted, the farm bloc then raised the ante on the alternative parity ceiling from 100 per cent of parity to 110 per cent.</p>
<p><em>This means an additional 10 per cent increase for many basic farm prices.</em><br>
</p>
<h4>The Third Wrinkle</h4>
<p class="fst">Intoxicated with their easy success, the farm bloc introduced a third wrinkle. For some farm products, the average price from 1919 to 1929 was much higher than either 110 per pent of parity or the price on October 1. This is particularly true in the case of cotton. Where a ceiling based on the 1919–1929 average would mean an additional increase of some 30 per cent. The representatives from the cotton states demanded that this be included as a third alternative and the demand was granted.</p>
<p>As a result, <em>the provision of the House Price Control Bill in regard to farm prices, far from preventing prices rises, actually guarantees tremendous price increases, amounting to a wage cut for the workers of at least 20 per cent</em>.</p>
<p>As for prices of industrial products, the price administrator (it is assumed by everyone that Roosevelt will appoint Leon Henderson to this position) is permitted to set a ceiling, or a top price, on any commodity threatening to reach the “inflation point.” The effectiveness of this measure, in preventing inflation is exceedingly dubious. First of all an awful lot will depend on the judgment of one man, Leon Henderson. Even if he should be motivated by a sincere desire to prevent inflation, he still has virtually no power to do this, for the House bill establishes a five man board of review with broad power to overrule decisions by the price administrator. Moreover, a manufacturer or profiteer can appeal any case to the courts, where it could undoubtedly be dragged out for months or years. The provision giving the price administrator power to license business men and to revoke their licenses if they violated the price ceilings was defeated by the House. Thus, there is no effective means of enforcing any of these maximum prices.<br>
</p>
<h4>Another Administration Defeat</h4>
<p class="fst">The Administration suffered another, defeat on the proposal to give the government power to buy and sell any product in any market for the purpose of stabilizing its price. This provision was changed so that the government only has the power to buy and sell in the DOMESTIC market to stimulate production of HIGH-COST producers. <em>This power cannot thus be used to lower prices. If used, it will only raise prices further.</em></p>
<p>A final provision of the bill permits the establishment of ceilings on rents in defense areas and gives such tenants the right of appeal if they think their rents are too high. This in no way will stop the rent gouge now going on in defense areas in view of the fact that the rents are already sky high. Nor will it help prevent a general rise in rents throughout the country, which is clearly indicated as a next step in the developing inflationary process.</p>
<p>About all that can be said in favor of the action of the House of Representatives is that the House recognizes the danger of inflation and is on record as being in favor, presumably, of doing something to prevent it.<br>
</p>
<h4>Politics Behind the Bill</h4>
<p class="fst">As important as the Price Control Bill itself is the politics which surrounded its passage by the House. <em>It is clear that the question of inflation, which, of course, means the living standards of the masses, is to be the political football in the 1941 congressional elections.</em> The Republicans hope to make a political comeback by accusing the Administration of being responsible for the failure to prevent inflation. They expect to escape the counter-charge that they sabotaged the Price Control Bill by claiming that they were for a “real” price control bill as introduced by Representative Gore. Gore’s bill, following the ideas of Bernard Baruch, called for an overall price ceiling on everything, including wages. This would be an exceptionally reactionary measure. The House had, at least, the political sense to defeat this proposal, for they knew how opposed the workers are to any attempt to control wages.<br>
</p>
<h4>Now Before Senate</h4>
<p class="fst">The Senate now become the next stage where the battle of inflation is to be fought. The workers, particularly the organized workers, must pay very close attention to the deliberations of the Senate. The representatives of the bosses will make every attempt to unload the tremendous cost of the war onto the workers. It is the desire of the bosses to maintain and increase profits that is the main driving force in bringing about rising prices and inflation. Every worker must see to it that his union takes action on this question.</p>
<p><em>The first demand of the unions must be for a 100 per cent excess profits tax. The second demand must be to limit all profits to a maximum of 6 per cent. The third demand must be for the establishment of workers’ control of prices!</em></p>
<p>Unless the workers take action along these lines, the fight to maintain living standards through wage increases will become a steadily losing fight.</p>
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Frank Demby
New Price Bill Fails to Solve the Problem
of the Rising Cost of Living
(December 1941)
From Labor Action, Vol. 5 No. 49, 8 December 1941, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
Faced with the dilemma of serious price inflation or taking “steps in the direction of establishing totalitarian controls, the House of Representatives passed a weak-kneed compromise last Friday by, a vote of 224 to 161. After some fancy political maneuvering, the question of price control raised as long ago as last July, has now been referred to the Senate where, it is expected, a “real” price control bill will be passed.
The House bill declares that in the interests of “national defense” it is necessary to prevent price and credit inflation. Its provisions, however, cannot possibly achieve this objective. In fact, if the House bill becomes law it will definitely result in further substantial increases in prices. As always, the working people will suffer.
Farm Bloc Blackmail
The congressional farm bloc, operating in the interests of the rich commercial farmers, has put into the bill a provision concerning, the prices of farm products that constitutes one of the best illustrations of congressional blackmail in a long, long time. A ceiling is to be established on farm prices, but this upper limit cannot be lower than the highest of the following three levels:
A price equal to 110 per cent of parity;
The market price prevailing on October 1, 1941;
The average price for the period 1919–1929.
The original draft of the price control bill called for a ceiling on farm prices to be based on the price as of July 28, 1941, or 100 per cent of parity, whichever was higher. Parity, as I have previously explained, was the slogan of the Farm Bureau, to give the commercial farmers the same purchasing power as they possessed in the period from 1909–1914, which is the highest on record for the 20th century.
This meant, in many cases, price increases above those existing on July 28 running from 10 to 30 per cent. And, of course, prices on July 28 already reflected a substantial wartime inflation. While the House Banking and Currency Committee deliberately stalled for several months, under the pretext of a “thorough” consideration of the matter of price control, prices rose substantially. This prompted the farm bloc to demand that the prevailing price level be changed from July 28 to October 1. Not satisfied with this, and being in the position to hold up indefinitely any legislation at all unless its demands were granted, the farm bloc then raised the ante on the alternative parity ceiling from 100 per cent of parity to 110 per cent.
This means an additional 10 per cent increase for many basic farm prices.
The Third Wrinkle
Intoxicated with their easy success, the farm bloc introduced a third wrinkle. For some farm products, the average price from 1919 to 1929 was much higher than either 110 per pent of parity or the price on October 1. This is particularly true in the case of cotton. Where a ceiling based on the 1919–1929 average would mean an additional increase of some 30 per cent. The representatives from the cotton states demanded that this be included as a third alternative and the demand was granted.
As a result, the provision of the House Price Control Bill in regard to farm prices, far from preventing prices rises, actually guarantees tremendous price increases, amounting to a wage cut for the workers of at least 20 per cent.
As for prices of industrial products, the price administrator (it is assumed by everyone that Roosevelt will appoint Leon Henderson to this position) is permitted to set a ceiling, or a top price, on any commodity threatening to reach the “inflation point.” The effectiveness of this measure, in preventing inflation is exceedingly dubious. First of all an awful lot will depend on the judgment of one man, Leon Henderson. Even if he should be motivated by a sincere desire to prevent inflation, he still has virtually no power to do this, for the House bill establishes a five man board of review with broad power to overrule decisions by the price administrator. Moreover, a manufacturer or profiteer can appeal any case to the courts, where it could undoubtedly be dragged out for months or years. The provision giving the price administrator power to license business men and to revoke their licenses if they violated the price ceilings was defeated by the House. Thus, there is no effective means of enforcing any of these maximum prices.
Another Administration Defeat
The Administration suffered another, defeat on the proposal to give the government power to buy and sell any product in any market for the purpose of stabilizing its price. This provision was changed so that the government only has the power to buy and sell in the DOMESTIC market to stimulate production of HIGH-COST producers. This power cannot thus be used to lower prices. If used, it will only raise prices further.
A final provision of the bill permits the establishment of ceilings on rents in defense areas and gives such tenants the right of appeal if they think their rents are too high. This in no way will stop the rent gouge now going on in defense areas in view of the fact that the rents are already sky high. Nor will it help prevent a general rise in rents throughout the country, which is clearly indicated as a next step in the developing inflationary process.
About all that can be said in favor of the action of the House of Representatives is that the House recognizes the danger of inflation and is on record as being in favor, presumably, of doing something to prevent it.
Politics Behind the Bill
As important as the Price Control Bill itself is the politics which surrounded its passage by the House. It is clear that the question of inflation, which, of course, means the living standards of the masses, is to be the political football in the 1941 congressional elections. The Republicans hope to make a political comeback by accusing the Administration of being responsible for the failure to prevent inflation. They expect to escape the counter-charge that they sabotaged the Price Control Bill by claiming that they were for a “real” price control bill as introduced by Representative Gore. Gore’s bill, following the ideas of Bernard Baruch, called for an overall price ceiling on everything, including wages. This would be an exceptionally reactionary measure. The House had, at least, the political sense to defeat this proposal, for they knew how opposed the workers are to any attempt to control wages.
Now Before Senate
The Senate now become the next stage where the battle of inflation is to be fought. The workers, particularly the organized workers, must pay very close attention to the deliberations of the Senate. The representatives of the bosses will make every attempt to unload the tremendous cost of the war onto the workers. It is the desire of the bosses to maintain and increase profits that is the main driving force in bringing about rising prices and inflation. Every worker must see to it that his union takes action on this question.
The first demand of the unions must be for a 100 per cent excess profits tax. The second demand must be to limit all profits to a maximum of 6 per cent. The third demand must be for the establishment of workers’ control of prices!
Unless the workers take action along these lines, the fight to maintain living standards through wage increases will become a steadily losing fight.
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<h2 class="western">Frank Demby</h2>
<h1>Gloom in Wall Street</h1>
<h3>(August 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue2.htm#ni41_08" target="new">Vol. VII No. 7 (Whole No. 56)</a>, August 1941, pp. 174–5.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">WALL STREET EXPERIENCES several million share days. Does this mean a revival, which will parallel the tremendous rise in the stock market that occurred during World War I? One of the mysteries of World War II has been the continuance of the stock market in a state of unprecedented lethargy. The stock market, where the capitalists trade in certificates of ownership, claims to dividends and interest that the manufacturing bosses extract from the toil and sweat of their workers, is supposed to be a barometer of business conditions. Business has been booming; production has reached all-time highs due to the developing war economy; profits in many cases exceed the 1929 highs – and yet Wall Street has been in the doldrums. Prices are very low; business has been so poor that the brokers cannot, in many cases, even cover overhead expenses, resulting in forced mergers and consolidations. The best index of Wall Street depression in the midst of a business boom has been the decline in the price o£ seats on the Stock Exchange – the exclusive country club of the big financiers and speculators. Seats, which not so long ago used to sell for well over $100,000, are now in the twenty thousand dollar levels. Almost anyone – that is, for a small fee – con now buy the privilege of trading in stocks and bonds.</p>
<p>Interest is running very high among the capitalists concerning whether a real revival in the stock market is actually under way at last. While the workers don’t own any stocks and bonds, the advanced workers will follow this development with almost as much interest as the capitalists, for it is always important to know what the class enemy is thinking and doing. Moreover, a stock market boom, if it follows previous experience, always ends in a crash which makes the ensuing depression that much worse. The after-effects of the boom during World War I were not felt until late 1920 and culminated in the 1921 crash, which was resumed after the temporary prosperity of the 1920s in 1929.</p>
<p>Opinion in Wall Street is divided on the question of why the sudden increase in business, and whether a revival is really under way. Some claim that the continued resistance of the Russian armies is chiefly responsible for the rise in Wall Street. They interpret this as meaning a more favorable military outlook for the Allies (that is, for American imperialism) , which it surely is if Hitler is really bogged down on two fronts. American capitalist property and investments are in a sounder position – worth more – hence the rise in Wall Street and the increased volume of business.</p>
<p>Others say that some of the increased purchasing power being pumped into the hands of the public by increased government expenditures is finally finding its natural outlet – the stock market. In support of this contention, they cite the recent report of the Department of Commerce to the effect that income payments to individuals in the month of May reached a rate of $86 billion annually. This is the highest on record and compares with an estimated national income of some $75 billion in 1940 and the previous high in 1929 of some $82 billion. Increasing public confidence – that is, surplus incomes in the hands of the big capitalists and the upper middle class – means increasing support of the stock market.</p>
<p>Still others base their optimistic forecasts on the increasingly high profits being made by practically all sections of American business and the “realistic” tax proposals now being considered by the House Ways and Means Committee. They find especially heartening the apparent tendency of Congress to keep the excess profits tax at ridiculously low levels. Altogether, they find no tendency on the part of Congress to pass taxes which will discourage private initiative! Hence, Wall Street should reflect these increasing profits and the market should go up.</p>
<p>Undoubtedly there is some truth in all of the contentions. However, in estimating the prospects of capital’s colossal legalized gambling institution, known as the New York Stock Exchange and allied exchanges throughout the country, it is first necessary to understand why the stock market has not paralleled the rise in business during the past two years. Only then are we in a position to estimate whether the new forces, mentioned above, appear to be sufficiently powerful to offset the old forces that have kept Wall Street in a state of continued depression.</p>
<p>Here we are confronted with a powerful tendency, which appears to mark an entirely new technical stage in the process of accumulating capital. Hitherto, the chief legitimate function of the stock market in the capitalist economic system has been as a means of raising capital for corporations either for the purpose of floating new enterprises or adding capital to existing corporations, or replacing capital that has been used up by existing corporations. This function, beginning in the middle of the nineteenth century with the financing of the railroads, was made necessary by the increasing size of capital accumulations required to launch a capitalist enterprise. More capital was needed than could possibly be furnished by one man, or by small groups (partnerships). Through the device of the stock market, capital could easily and quickly be raised from all sections of the capitalist class and concentrated in the hands of a few finance capitalists, or their agents, who would direct it where it would do them the most good – that is, earn the highest rate of profit.</p>
<p>For some time, and with increasing frequency in the past few years, there has appeared a tendency for existing corporations to raise all the additional capital they have required, either to take care of depreciation or expansion or both through their own accumulated reserves of surplus capital and undivided profits. This is particularly true of the very large corporations. The very statistics of the Department of Commerce, referred to above, bear this out. Dividend payments have risen 5 per cent over last year, but entrepreneurial returns are up 9 per cent. Putting the matter very simply, almost one-half of the profits of corporations are not being paid out in the form of dividends to the stockholders but are being put aside in surplus and undivided profits accounts. These, can be used at the discretion of the management and board of directors for whatever purpose they wish. Most managements explain these steps by the necessity of piling up reserves for a “rainy day” in these uncertain times. But time and again, the large corporations use these reserves for routine capital financing.</p>
<p>This is having a noticeable effect on the structure of the capitalist class. It means the further concentration of control of huge enterprises in fewer and fewer hands – particularly in the hands of the management. The officers and directors of the large corporations become increasingly conservative as they rely more and more on these new methods of self-financing. The expansion of existing enterprises and, above all, the building of new enterprises, is resisted more and more by this newly-elevated capitalist bureaucracy. It becomes the most conservative section of society and acts, in the struggle for its increasing independence and enhancement and preservation of its own power, as a complete brake on the development of the productive forces. Even the imperialist war economy suffers as a result of this innate conservatism of the capitalist managers. The full implications of this trend are only in the process of being observed. They will require a separate theoretical analysis.</p>
<p>Meanwhile, Wall Street and those capitalists who operate on the exchanges have been suffering. I£ a number of big corporations can finance themselves completely or partially through their own accumulated reserves of surplus capital, this means less business for Wall Street. If less dividends are being paid out, there is less reason for the public, that is, the small capitalists, who had their fingers burnt badly in the 1929 crash, to invest their small, individual savings in the stock market. This factor has been the main one in explaining the depressed state of Wall Street. Wall Street has been further undermined by the liquidation of a large portion of British-held American securities through private deals, without benefit of the stock exchange mechanism. In addition, of course, the war has not been going too favorably for American imperialism. Also, many capitalists are genuinely frightened by the increasing tendency toward government control of industry that is an inevitable part of the process of developing a total war economy.</p>
<p>Wall Street, in one of the most widely-advertised publicity campaigns that it has ever put on, has tried to offset these unfavorable factors, as well as the strongly developed public trait of blaming all economic ills on Wall Street, by electing as its new president of the New York Stock Exchange Mr. Emil Schram, head of the RFC. Mr. Schram’s duties will be those of a public relations counselor. It will be his task to establish “better relations” with the government and to increase public confidence in Wall Street, to the end that more suckers can be induced to part with their savings.</p>
<p>It is always difficult to estimate the immediate prospects of Wall Street. But its long-term prospects are indeed gloomy. The tendency for corporations to depend increasingly on self-financing and thus cut themselves loose from Wall Street will mean that Wall Street’s main function will be more and more limited to the financing of new enterprises – and there cannot be too many of these in the general period of capitalist decline. The government will be forced to siphon more and more of the excess savings of the middle class into government channels through increased taxation and, eventually, compulsory savings for the purpose of maintaining government borrowing of a non-inflationary character. Moreover, the defeat of German imperialism looms as an increasingly long and costly undertaking.</p>
<p>These unhappy prospects for Wall Street over a long period of time seem to find reinforcement in the announcement of a sharp increase in the “short” position in Wall Street. The shorts are the speculators who operate in the hope that prices will go down. Wall Street rarely permits sentiment to interfere with its cold-blooded business calculations. In spite of all the ballyhoo, then, there is increasing opinion within Wall Street that there will be no immediate boom in the stock market. In any case, it appears quite safe to predict that this time there will be no run-away boom on the 1916-1920 or 1926-1929 models. Any rise that does take place will be of a temporary and limited character, depending largely on temporary conjunctural factors.</p>
<p>All of which helps to point to the inescapable conclusion that capitalism is getting old – in fact, old to the point of senility. No rational economic order requires such an archaic and bloodthirsty institution as the stock market. The financing of new enterprises, as well as the expansion and maintenance of old ones, today requires the establishment of a planned economy. The trend toward the establishment of planned economy is an irresistible one; moreover, it appears on a world scale. The question is merely whether it will be the totalitarian, bureaucratic and reactionary planning of the capitalist or Stalinist variety, or whether it will be the democratic and progressive planning of socialism. In the last analysis, it is the workers, particularly the American workers, who will have the final say on this historically decisive question.</p>
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Frank Demby
Gloom in Wall Street
(August 1941)
From The New International, Vol. VII No. 7 (Whole No. 56), August 1941, pp. 174–5.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
WALL STREET EXPERIENCES several million share days. Does this mean a revival, which will parallel the tremendous rise in the stock market that occurred during World War I? One of the mysteries of World War II has been the continuance of the stock market in a state of unprecedented lethargy. The stock market, where the capitalists trade in certificates of ownership, claims to dividends and interest that the manufacturing bosses extract from the toil and sweat of their workers, is supposed to be a barometer of business conditions. Business has been booming; production has reached all-time highs due to the developing war economy; profits in many cases exceed the 1929 highs – and yet Wall Street has been in the doldrums. Prices are very low; business has been so poor that the brokers cannot, in many cases, even cover overhead expenses, resulting in forced mergers and consolidations. The best index of Wall Street depression in the midst of a business boom has been the decline in the price o£ seats on the Stock Exchange – the exclusive country club of the big financiers and speculators. Seats, which not so long ago used to sell for well over $100,000, are now in the twenty thousand dollar levels. Almost anyone – that is, for a small fee – con now buy the privilege of trading in stocks and bonds.
Interest is running very high among the capitalists concerning whether a real revival in the stock market is actually under way at last. While the workers don’t own any stocks and bonds, the advanced workers will follow this development with almost as much interest as the capitalists, for it is always important to know what the class enemy is thinking and doing. Moreover, a stock market boom, if it follows previous experience, always ends in a crash which makes the ensuing depression that much worse. The after-effects of the boom during World War I were not felt until late 1920 and culminated in the 1921 crash, which was resumed after the temporary prosperity of the 1920s in 1929.
Opinion in Wall Street is divided on the question of why the sudden increase in business, and whether a revival is really under way. Some claim that the continued resistance of the Russian armies is chiefly responsible for the rise in Wall Street. They interpret this as meaning a more favorable military outlook for the Allies (that is, for American imperialism) , which it surely is if Hitler is really bogged down on two fronts. American capitalist property and investments are in a sounder position – worth more – hence the rise in Wall Street and the increased volume of business.
Others say that some of the increased purchasing power being pumped into the hands of the public by increased government expenditures is finally finding its natural outlet – the stock market. In support of this contention, they cite the recent report of the Department of Commerce to the effect that income payments to individuals in the month of May reached a rate of $86 billion annually. This is the highest on record and compares with an estimated national income of some $75 billion in 1940 and the previous high in 1929 of some $82 billion. Increasing public confidence – that is, surplus incomes in the hands of the big capitalists and the upper middle class – means increasing support of the stock market.
Still others base their optimistic forecasts on the increasingly high profits being made by practically all sections of American business and the “realistic” tax proposals now being considered by the House Ways and Means Committee. They find especially heartening the apparent tendency of Congress to keep the excess profits tax at ridiculously low levels. Altogether, they find no tendency on the part of Congress to pass taxes which will discourage private initiative! Hence, Wall Street should reflect these increasing profits and the market should go up.
Undoubtedly there is some truth in all of the contentions. However, in estimating the prospects of capital’s colossal legalized gambling institution, known as the New York Stock Exchange and allied exchanges throughout the country, it is first necessary to understand why the stock market has not paralleled the rise in business during the past two years. Only then are we in a position to estimate whether the new forces, mentioned above, appear to be sufficiently powerful to offset the old forces that have kept Wall Street in a state of continued depression.
Here we are confronted with a powerful tendency, which appears to mark an entirely new technical stage in the process of accumulating capital. Hitherto, the chief legitimate function of the stock market in the capitalist economic system has been as a means of raising capital for corporations either for the purpose of floating new enterprises or adding capital to existing corporations, or replacing capital that has been used up by existing corporations. This function, beginning in the middle of the nineteenth century with the financing of the railroads, was made necessary by the increasing size of capital accumulations required to launch a capitalist enterprise. More capital was needed than could possibly be furnished by one man, or by small groups (partnerships). Through the device of the stock market, capital could easily and quickly be raised from all sections of the capitalist class and concentrated in the hands of a few finance capitalists, or their agents, who would direct it where it would do them the most good – that is, earn the highest rate of profit.
For some time, and with increasing frequency in the past few years, there has appeared a tendency for existing corporations to raise all the additional capital they have required, either to take care of depreciation or expansion or both through their own accumulated reserves of surplus capital and undivided profits. This is particularly true of the very large corporations. The very statistics of the Department of Commerce, referred to above, bear this out. Dividend payments have risen 5 per cent over last year, but entrepreneurial returns are up 9 per cent. Putting the matter very simply, almost one-half of the profits of corporations are not being paid out in the form of dividends to the stockholders but are being put aside in surplus and undivided profits accounts. These, can be used at the discretion of the management and board of directors for whatever purpose they wish. Most managements explain these steps by the necessity of piling up reserves for a “rainy day” in these uncertain times. But time and again, the large corporations use these reserves for routine capital financing.
This is having a noticeable effect on the structure of the capitalist class. It means the further concentration of control of huge enterprises in fewer and fewer hands – particularly in the hands of the management. The officers and directors of the large corporations become increasingly conservative as they rely more and more on these new methods of self-financing. The expansion of existing enterprises and, above all, the building of new enterprises, is resisted more and more by this newly-elevated capitalist bureaucracy. It becomes the most conservative section of society and acts, in the struggle for its increasing independence and enhancement and preservation of its own power, as a complete brake on the development of the productive forces. Even the imperialist war economy suffers as a result of this innate conservatism of the capitalist managers. The full implications of this trend are only in the process of being observed. They will require a separate theoretical analysis.
Meanwhile, Wall Street and those capitalists who operate on the exchanges have been suffering. I£ a number of big corporations can finance themselves completely or partially through their own accumulated reserves of surplus capital, this means less business for Wall Street. If less dividends are being paid out, there is less reason for the public, that is, the small capitalists, who had their fingers burnt badly in the 1929 crash, to invest their small, individual savings in the stock market. This factor has been the main one in explaining the depressed state of Wall Street. Wall Street has been further undermined by the liquidation of a large portion of British-held American securities through private deals, without benefit of the stock exchange mechanism. In addition, of course, the war has not been going too favorably for American imperialism. Also, many capitalists are genuinely frightened by the increasing tendency toward government control of industry that is an inevitable part of the process of developing a total war economy.
Wall Street, in one of the most widely-advertised publicity campaigns that it has ever put on, has tried to offset these unfavorable factors, as well as the strongly developed public trait of blaming all economic ills on Wall Street, by electing as its new president of the New York Stock Exchange Mr. Emil Schram, head of the RFC. Mr. Schram’s duties will be those of a public relations counselor. It will be his task to establish “better relations” with the government and to increase public confidence in Wall Street, to the end that more suckers can be induced to part with their savings.
It is always difficult to estimate the immediate prospects of Wall Street. But its long-term prospects are indeed gloomy. The tendency for corporations to depend increasingly on self-financing and thus cut themselves loose from Wall Street will mean that Wall Street’s main function will be more and more limited to the financing of new enterprises – and there cannot be too many of these in the general period of capitalist decline. The government will be forced to siphon more and more of the excess savings of the middle class into government channels through increased taxation and, eventually, compulsory savings for the purpose of maintaining government borrowing of a non-inflationary character. Moreover, the defeat of German imperialism looms as an increasingly long and costly undertaking.
These unhappy prospects for Wall Street over a long period of time seem to find reinforcement in the announcement of a sharp increase in the “short” position in Wall Street. The shorts are the speculators who operate in the hope that prices will go down. Wall Street rarely permits sentiment to interfere with its cold-blooded business calculations. In spite of all the ballyhoo, then, there is increasing opinion within Wall Street that there will be no immediate boom in the stock market. In any case, it appears quite safe to predict that this time there will be no run-away boom on the 1916-1920 or 1926-1929 models. Any rise that does take place will be of a temporary and limited character, depending largely on temporary conjunctural factors.
All of which helps to point to the inescapable conclusion that capitalism is getting old – in fact, old to the point of senility. No rational economic order requires such an archaic and bloodthirsty institution as the stock market. The financing of new enterprises, as well as the expansion and maintenance of old ones, today requires the establishment of a planned economy. The trend toward the establishment of planned economy is an irresistible one; moreover, it appears on a world scale. The question is merely whether it will be the totalitarian, bureaucratic and reactionary planning of the capitalist or Stalinist variety, or whether it will be the democratic and progressive planning of socialism. In the last analysis, it is the workers, particularly the American workers, who will have the final say on this historically decisive question.
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<h2>Frank Demby</h2>
<h1>Does Inflation Threaten?</h1>
<h4>There’s More Than One Way of Cutting Wages;<br>
Sometimes It’s Done By Inflating the Currency</h4>
<h3>(September 1940)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1940/index.htm#la04_25" target="new">Vol. 4 No. 25</a>, 30 September 1940, p. 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">The recent sudden rise in food prices, particularly meat prices, raises for every worker the question of whether the United States stands on the threshold of an inflationary period. The sharp price rise that occurred after the outbreak of the war in Europe in September 1939 gave way at the beginning of 1940 to a steady decline, which lasted until this summer. Since that time the trend has been in the direction of rising prices. All wholesale prices, for example have risen more than four points during the last month. Retail prices, of course, have gone up even more sharply.</p>
<p>So pronounced has the rise in some food prices been that Miss Harriet Elliott, consumer adviser to the National Defense Commission, has acknowledged a steady increase in complaints since the beginning of September. A similar situation is reported by the Bureau of Consumer Service of New York City’s Department of Markets. Prices of steaks have gone up five to eight cents a pound. Beef, pork and lamb are also special objects of complaint. Even the butchers are complaining as the price rise is depriving them of customers. Various government bureaus are now investigating the situation. So, don’t</p>
<p>A spokesman for the packing industry in Chicago, who refused to allow his name to be used, stated to the press that “the situation was partly seasonal, partly due to higher payrolls and partly attributable to the fact that the old livestock crop year was ending and the new crop year about to begin.”<br>
</p>
<h4>More Than One Way of Cutting Wages</h4>
<p class="fst">If the factors that have caused this price rise are merely temporary and accidental, then we don’t have to worry about inflation. But if they are more or less a permanent part of our general economic situation, then every worker and every trade unionist must give the problem his closest attention. For there is more than one way of cutting wages, as has been demonstrated time and again during the tortured history of capitalism. Every worker knows and understands the simple and direct method of cutting wages. The boss simply reduces the wage. Even such indirect methods of wage-cutting as lengthening working hours or the use of the speed-up are familiar enough to the average worker. Fighting against these things are part of his daily struggle for existence.</p>
<p>The cleverest method of cutting wages, because the worker doesn’t experience it on his job, is the inflationary method. A period of generally and rapidly rising prices is considered inflationary. The worker might even receive an increase in the amount of money he receives every week. But before he knows it, he and his wife discover that his wage buys less food and other necessities than before. What has happened, of course, is that prices of things the worker and his family must buy have gone up much more than any possible raise in his wages. The economist sums this process up by saying that purchasing power has decreased. In a period of inflation, the decline in ability to buy and the rise in prices is most marked.</p>
<p>It would be interesting to ask the representative of the meat packers just exactly what he means by saying that higher payrolls are part of the explanation of the recent rise in meat prices. He would probably answer that wage costs in the meat packing industry have gone up. Consequently, in order to maintain profits, prices have to be raised. But we have the faint suspicion that the workers in the packing houses would have something to say about that. It is also not impossible that the real meaning is that there has been a certain amount of re-employment in some communities due to the “defense” program. This increase in payrolls provides the meat packers with an opportunity to raise their prices and make greater profits. The workers, they figure, can “afford” to pay higher prices.<br>
</p>
<h4>Various Indications of Inflation</h4>
<p class="fst">It is still too early to state definitely whether the country is entering a period of inflation, but there are already unmistakeable signs pointing in that direction in the not-too-distant future. One indication is the fact that the total money in circulation is now well over 8 billion dollars. This is the highest figure in American history. Much of this may be attributed to hoarding, especially by foreigners. Nevertheless, a large amount of money in circulation is always one of the characteristics of inflation. If not at present, then some time in the future, this can easily help along an inflationary process.</p>
<p>Another indication is the fact that bank deposits are also at record highs. The Federal Reserve Board’s most recent figures show the total of bank deposits and money in the hands of the public at a record high of $67,000,000,000. This fact must be coupled with another very important fact – namely, that excess reserves of the Federal Reserve System are now over 6½ billion dollars, almost the all-time peak. This means that the banks have this huge sum around just lying idle. The way the banking system operates, this money can be used to lend anywheres from 30 to 60 billion dollars. Both facts taken together mean that the base for a most colossal credit inflation has already been laid.<br>
</p>
<h4>Because of the War Trend Is World-Wide</h4>
<p class="fst">Still, something is required to set off the inflationary process, if it is to occur in the near future. Historically, that something has usually been war. This war is proving no exception. In England, for example, the country whose economy most closely resembles that of the U.S., all wholesale prices increased an average of 37.2 per cent from June 1939 to June 1940. The cost of living advanced 16 per cent during this period. In Russia, which experienced just a minor war with Finland so far, Mr. Gedye of the <strong>New York Times</strong>, stated that there has been a particularly sharp rise in prices (between January and April of this year, butter increased in price by 45 per cent, cheese by 20 per cent, sausages, bacon and ham by 25 per cent; gas, water and electricity from 50 to 100 per cent) while incomes have remained stationary and hours of work have been lengthened.</p>
<p>Even in Germany, the country with the most rigidly controlled price system in the world, while wages have remained absolutely fixed and hours of work have lengthened to from 10 to 14 hours per day, there have been some very pronounced price rises (from 10 to 40 per cent in many cases) especially in such staple items of the German diet as potatoes and sausages. The same experience is to be noted in Japan and Italy. What is taking place is clearly a world-wide inflationary trend. It is just a faint indication of how the entire world situation is loaded with dynamite.<br>
</p>
<h4>A Question for the Union Agenda</h4>
<p class="fst">Even should the U.S. not enter the war in the near future, the cost of the “defense” program threatens a runaway inflation. This is clearly recognized in a study just completed by the National Industrial Conference Board. The huge cost of this program all of which is just so much waste so far as the satisfaction of human wants is concerned, indicates that only a small portion will be covered through increased taxation. The capitalists are certainly going to oppose any increased taxation on the rich and there is a limit to the burden of taxation that can be placed on the workers without producing unrest and rebellion. The most “painless” method of meeting the huge cost of this program is, therefore, largely through increased Government borrowing. No matter what price controls are introduced – and there will be many – a rapidly rising Federal Debt is bound to give a strong impulse to the inflationary process.</p>
<p>In summary, therefore: The bases for a vast inflation already exist in the United States. The next months should witness further advances in prices. Every trade unionist, as a matter of self-protection, must immediately demand that this question. along with the worker’s natural answer to the problem – a rising scale of wages – be placed on the agenda of his next union meeting.</p>
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Frank Demby
Does Inflation Threaten?
There’s More Than One Way of Cutting Wages;
Sometimes It’s Done By Inflating the Currency
(September 1940)
From Labor Action, Vol. 4 No. 25, 30 September 1940, p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The recent sudden rise in food prices, particularly meat prices, raises for every worker the question of whether the United States stands on the threshold of an inflationary period. The sharp price rise that occurred after the outbreak of the war in Europe in September 1939 gave way at the beginning of 1940 to a steady decline, which lasted until this summer. Since that time the trend has been in the direction of rising prices. All wholesale prices, for example have risen more than four points during the last month. Retail prices, of course, have gone up even more sharply.
So pronounced has the rise in some food prices been that Miss Harriet Elliott, consumer adviser to the National Defense Commission, has acknowledged a steady increase in complaints since the beginning of September. A similar situation is reported by the Bureau of Consumer Service of New York City’s Department of Markets. Prices of steaks have gone up five to eight cents a pound. Beef, pork and lamb are also special objects of complaint. Even the butchers are complaining as the price rise is depriving them of customers. Various government bureaus are now investigating the situation. So, don’t
A spokesman for the packing industry in Chicago, who refused to allow his name to be used, stated to the press that “the situation was partly seasonal, partly due to higher payrolls and partly attributable to the fact that the old livestock crop year was ending and the new crop year about to begin.”
More Than One Way of Cutting Wages
If the factors that have caused this price rise are merely temporary and accidental, then we don’t have to worry about inflation. But if they are more or less a permanent part of our general economic situation, then every worker and every trade unionist must give the problem his closest attention. For there is more than one way of cutting wages, as has been demonstrated time and again during the tortured history of capitalism. Every worker knows and understands the simple and direct method of cutting wages. The boss simply reduces the wage. Even such indirect methods of wage-cutting as lengthening working hours or the use of the speed-up are familiar enough to the average worker. Fighting against these things are part of his daily struggle for existence.
The cleverest method of cutting wages, because the worker doesn’t experience it on his job, is the inflationary method. A period of generally and rapidly rising prices is considered inflationary. The worker might even receive an increase in the amount of money he receives every week. But before he knows it, he and his wife discover that his wage buys less food and other necessities than before. What has happened, of course, is that prices of things the worker and his family must buy have gone up much more than any possible raise in his wages. The economist sums this process up by saying that purchasing power has decreased. In a period of inflation, the decline in ability to buy and the rise in prices is most marked.
It would be interesting to ask the representative of the meat packers just exactly what he means by saying that higher payrolls are part of the explanation of the recent rise in meat prices. He would probably answer that wage costs in the meat packing industry have gone up. Consequently, in order to maintain profits, prices have to be raised. But we have the faint suspicion that the workers in the packing houses would have something to say about that. It is also not impossible that the real meaning is that there has been a certain amount of re-employment in some communities due to the “defense” program. This increase in payrolls provides the meat packers with an opportunity to raise their prices and make greater profits. The workers, they figure, can “afford” to pay higher prices.
Various Indications of Inflation
It is still too early to state definitely whether the country is entering a period of inflation, but there are already unmistakeable signs pointing in that direction in the not-too-distant future. One indication is the fact that the total money in circulation is now well over 8 billion dollars. This is the highest figure in American history. Much of this may be attributed to hoarding, especially by foreigners. Nevertheless, a large amount of money in circulation is always one of the characteristics of inflation. If not at present, then some time in the future, this can easily help along an inflationary process.
Another indication is the fact that bank deposits are also at record highs. The Federal Reserve Board’s most recent figures show the total of bank deposits and money in the hands of the public at a record high of $67,000,000,000. This fact must be coupled with another very important fact – namely, that excess reserves of the Federal Reserve System are now over 6½ billion dollars, almost the all-time peak. This means that the banks have this huge sum around just lying idle. The way the banking system operates, this money can be used to lend anywheres from 30 to 60 billion dollars. Both facts taken together mean that the base for a most colossal credit inflation has already been laid.
Because of the War Trend Is World-Wide
Still, something is required to set off the inflationary process, if it is to occur in the near future. Historically, that something has usually been war. This war is proving no exception. In England, for example, the country whose economy most closely resembles that of the U.S., all wholesale prices increased an average of 37.2 per cent from June 1939 to June 1940. The cost of living advanced 16 per cent during this period. In Russia, which experienced just a minor war with Finland so far, Mr. Gedye of the New York Times, stated that there has been a particularly sharp rise in prices (between January and April of this year, butter increased in price by 45 per cent, cheese by 20 per cent, sausages, bacon and ham by 25 per cent; gas, water and electricity from 50 to 100 per cent) while incomes have remained stationary and hours of work have been lengthened.
Even in Germany, the country with the most rigidly controlled price system in the world, while wages have remained absolutely fixed and hours of work have lengthened to from 10 to 14 hours per day, there have been some very pronounced price rises (from 10 to 40 per cent in many cases) especially in such staple items of the German diet as potatoes and sausages. The same experience is to be noted in Japan and Italy. What is taking place is clearly a world-wide inflationary trend. It is just a faint indication of how the entire world situation is loaded with dynamite.
A Question for the Union Agenda
Even should the U.S. not enter the war in the near future, the cost of the “defense” program threatens a runaway inflation. This is clearly recognized in a study just completed by the National Industrial Conference Board. The huge cost of this program all of which is just so much waste so far as the satisfaction of human wants is concerned, indicates that only a small portion will be covered through increased taxation. The capitalists are certainly going to oppose any increased taxation on the rich and there is a limit to the burden of taxation that can be placed on the workers without producing unrest and rebellion. The most “painless” method of meeting the huge cost of this program is, therefore, largely through increased Government borrowing. No matter what price controls are introduced – and there will be many – a rapidly rising Federal Debt is bound to give a strong impulse to the inflationary process.
In summary, therefore: The bases for a vast inflation already exist in the United States. The next months should witness further advances in prices. Every trade unionist, as a matter of self-protection, must immediately demand that this question. along with the worker’s natural answer to the problem – a rising scale of wages – be placed on the agenda of his next union meeting.
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<h2>Frank Demby</h2>
<h1>Mr. Willkie Pulls a “Boner”</h1>
<h4>All of This Goes to Prove That, as Between Tweedledee and Tweedledum,<br>
the Bosses May Have a Choice, But We Have None at All</h4>
<h3>(September 1940)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1940/index.htm#la04_23" target="new">Vol. 4 No. 23</a>, 16 September 1940. p. 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">When Wall Street’s white hope, Republican presidential nominee Wendell L. Willkie, rushed into print a few weeks ago to denounce the Overton-Russell amendment to the conscription bill, which provides for the conscription of industry, betting commissioners in Wall Street announced that the odds favoring Roosevelt’s re-election had shifted from 6 to 5 to 9 to 5. Soon thereafter, Mr. Luce, boss of <strong>Time</strong> and <strong>Fortune</strong> magazines, (personal friend of J.P. Morgan), whose publications started the original Willkie boom, began to wonder whether Willkie wasn’t another “Fat Alf”. Even Walter Lippman has questioned the advisability of Willkie’s candidacy. Truly, politics is an unkind game, as Mr. Willkie is fast learning.</p>
<p>Since we were confident a long time ago that Mr. Roosevelt was the best man for the job of preserving American capitalism and preparing American imperialism for war, we cannot register any surprise now that his re-election for a third term seems more or less certain. But two questions continue to puzzle us. The first is: Why are Willkie’s backers greasing the skids for his downfall, thus facilitating Roosevelt’s victory? And the second, and by far the more important question is: What is the real meaning and significance of the Overton-Russell amendment?<br>
</p>
<h4>It Takes a Really Skilled Hand</h4>
<p class="fst">A superficial answer to the first question is easy. Conscription of manpower is none too popular with the American masses. Conscription of men without conscription of industry smacks too much of rank class discrimination. Not even Willkie’s subsequent “clarification” of his position to the effect that he is not against conscription of. industry on principle, but only wanted “adequate safeguards.” following the lead of a <strong>New York Times</strong> editorial to that effect, can remedy the effects of that rash moment when Willkie allowed his real sentiments and attachment for property interests to push him into one of the most colossal boners any presidential aspirant has ever made. Willkie is, therefore, a losing proposition. His backers, you may say, don’t want to back a loser. Hence, they are withdrawing their support while there is still time to withdraw. Simple? A little too simple.</p>
<p>Our own speculations run along the following lines. Both Willkie and Roosevelt, as we shall have occasion to prove in detail later on, are candidates of the House of Morgan in a most direct way. The knifing of Willkie is merely evidence of the fact that the Morgan interests prefer the victory of Roosevelt. This decision, in turn, is based on the strengthening of England’s resistance to Hitler. Prolonged British resistance, say into the spring of 1941, increases the probability of immediate American entry into the war. To facilitate this delicate job requires the touch and guidance of a master hand in fooling the workers. Who can do this job better, or as well as, Roosevelt? Wall Street may be for Willkie. But a very important section of the American ruling class is working in such a way as to increase the prospects of a Roosevelt victory.<br>
</p>
<h4>A Very Clever Maneuver</h4>
<p class="fst">When Willkie denounced the Overton-Russell amendment as “socialistic,” and threatening to “sovietize American industry,” he also denounced those who favored the amendment as sponsors of “a cheap political trick.” There is good reason for believing that the timing of the Overton-Russell amendment was a very clever political maneuver. Indeed, Mr. Arthur Krock, of the <strong>New York Times</strong>, claims that it was designed as a political trap to catch Willkie and the Republican senators. Be that as it may, Willkie was certainly caught, but a majority of the GOP senators voted for it! The question is clearly not a party issue. If there were any doubts about this, the overwhelming vote in the House for the Smith amendment (which corresponds to the Senate’s Overton-Russell amendment) should have dispelled them. Since all the members of the House are up for re-election this year, we can safely conclude that all but 31 members of the House want to be re-elected and don’t come from blue-stocking districts.</p>
<p>It is well to point out that the Smith amendment is more precise and not so sweeping as the Overton-Russell amendment although both are substantially the same – they both give the President the power to commandeer plants if the employer proves recalcitrant; that is, should the Secretary of War or of the Navy be unable to arrive at an agreement. In particular, it does not authorize permanent possession by the government, but merely the <em>leasing</em> of the plant by the Government during the period of emergency.</p>
<p>Obviously, the conscription of industry (as proposed in either amendment or in whatever compromise is finally adopted) will not sovietize American industry. So far as this aspect of the question is concerned, the measure is simply another step – and a long one, at that – towards the establishment of a totalitarian state in this country. Far from meaning any tendency towards socialism it will mean the exact opposite – a step towards capitalist totalitarianism.<br>
</p>
<h4>Part and Parcel of the War Drive</h4>
<p class="fst">Why, one is required to ask, is this amendment tacked on to the Burke-Wadsworth conscription bill? Here, the obvious answer is the only one. It makes a good political appeal (especially for votes) to point out to the workers that only only are they being conscripted but so is industry. As such, it is clearly “fairer.” And we are certainly in favor of drafting wealth. The workers, however, must understand that <em>the entire conscription bill, including the amendment to conscript industry, is part of the general drive towards war and the establishment of a totalitarian regime in this country</em>.</p>
<p>Moreover, it gives Roosevelt a chance to pose as the champion of the masses by favoring the conscription of wealth. To be sure, Roosevelt has so far allowed Wallace to do his talking for him. Nevertheless, the whole business, greatly aided by Willkie’s boner has strengthened the Roosevelt Administration. It should be obvious to everyone that Roosevelt’s fundamental ideas on property are basically the same as Willkie’s. Both are wedded to capitalism and the preservation of property rights.</p>
<p>The idea that industry is being conscripted is a pure fake. If that were the case, it would hardly be necessary to spend so much time discussing the excess profits bill. Industry which is conscripted, wealth which is drafted, won’t have to haggle about profit. <em>IT WILL BE OWNED AND OPERATED BY THE GOVERNMENT. THAT IS REAL CONSCRIPTION OF INDUSTRY.</em> To be effective, however, <em>it must be under the control of the workers</em>. As long as the capitalists own the means of production, and J.P. Morgan can make and unmake Presidents, any conscription of industry will safeguard property rights.</p>
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Frank Demby
Mr. Willkie Pulls a “Boner”
All of This Goes to Prove That, as Between Tweedledee and Tweedledum,
the Bosses May Have a Choice, But We Have None at All
(September 1940)
From Labor Action, Vol. 4 No. 23, 16 September 1940. p. 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
When Wall Street’s white hope, Republican presidential nominee Wendell L. Willkie, rushed into print a few weeks ago to denounce the Overton-Russell amendment to the conscription bill, which provides for the conscription of industry, betting commissioners in Wall Street announced that the odds favoring Roosevelt’s re-election had shifted from 6 to 5 to 9 to 5. Soon thereafter, Mr. Luce, boss of Time and Fortune magazines, (personal friend of J.P. Morgan), whose publications started the original Willkie boom, began to wonder whether Willkie wasn’t another “Fat Alf”. Even Walter Lippman has questioned the advisability of Willkie’s candidacy. Truly, politics is an unkind game, as Mr. Willkie is fast learning.
Since we were confident a long time ago that Mr. Roosevelt was the best man for the job of preserving American capitalism and preparing American imperialism for war, we cannot register any surprise now that his re-election for a third term seems more or less certain. But two questions continue to puzzle us. The first is: Why are Willkie’s backers greasing the skids for his downfall, thus facilitating Roosevelt’s victory? And the second, and by far the more important question is: What is the real meaning and significance of the Overton-Russell amendment?
It Takes a Really Skilled Hand
A superficial answer to the first question is easy. Conscription of manpower is none too popular with the American masses. Conscription of men without conscription of industry smacks too much of rank class discrimination. Not even Willkie’s subsequent “clarification” of his position to the effect that he is not against conscription of. industry on principle, but only wanted “adequate safeguards.” following the lead of a New York Times editorial to that effect, can remedy the effects of that rash moment when Willkie allowed his real sentiments and attachment for property interests to push him into one of the most colossal boners any presidential aspirant has ever made. Willkie is, therefore, a losing proposition. His backers, you may say, don’t want to back a loser. Hence, they are withdrawing their support while there is still time to withdraw. Simple? A little too simple.
Our own speculations run along the following lines. Both Willkie and Roosevelt, as we shall have occasion to prove in detail later on, are candidates of the House of Morgan in a most direct way. The knifing of Willkie is merely evidence of the fact that the Morgan interests prefer the victory of Roosevelt. This decision, in turn, is based on the strengthening of England’s resistance to Hitler. Prolonged British resistance, say into the spring of 1941, increases the probability of immediate American entry into the war. To facilitate this delicate job requires the touch and guidance of a master hand in fooling the workers. Who can do this job better, or as well as, Roosevelt? Wall Street may be for Willkie. But a very important section of the American ruling class is working in such a way as to increase the prospects of a Roosevelt victory.
A Very Clever Maneuver
When Willkie denounced the Overton-Russell amendment as “socialistic,” and threatening to “sovietize American industry,” he also denounced those who favored the amendment as sponsors of “a cheap political trick.” There is good reason for believing that the timing of the Overton-Russell amendment was a very clever political maneuver. Indeed, Mr. Arthur Krock, of the New York Times, claims that it was designed as a political trap to catch Willkie and the Republican senators. Be that as it may, Willkie was certainly caught, but a majority of the GOP senators voted for it! The question is clearly not a party issue. If there were any doubts about this, the overwhelming vote in the House for the Smith amendment (which corresponds to the Senate’s Overton-Russell amendment) should have dispelled them. Since all the members of the House are up for re-election this year, we can safely conclude that all but 31 members of the House want to be re-elected and don’t come from blue-stocking districts.
It is well to point out that the Smith amendment is more precise and not so sweeping as the Overton-Russell amendment although both are substantially the same – they both give the President the power to commandeer plants if the employer proves recalcitrant; that is, should the Secretary of War or of the Navy be unable to arrive at an agreement. In particular, it does not authorize permanent possession by the government, but merely the leasing of the plant by the Government during the period of emergency.
Obviously, the conscription of industry (as proposed in either amendment or in whatever compromise is finally adopted) will not sovietize American industry. So far as this aspect of the question is concerned, the measure is simply another step – and a long one, at that – towards the establishment of a totalitarian state in this country. Far from meaning any tendency towards socialism it will mean the exact opposite – a step towards capitalist totalitarianism.
Part and Parcel of the War Drive
Why, one is required to ask, is this amendment tacked on to the Burke-Wadsworth conscription bill? Here, the obvious answer is the only one. It makes a good political appeal (especially for votes) to point out to the workers that only only are they being conscripted but so is industry. As such, it is clearly “fairer.” And we are certainly in favor of drafting wealth. The workers, however, must understand that the entire conscription bill, including the amendment to conscript industry, is part of the general drive towards war and the establishment of a totalitarian regime in this country.
Moreover, it gives Roosevelt a chance to pose as the champion of the masses by favoring the conscription of wealth. To be sure, Roosevelt has so far allowed Wallace to do his talking for him. Nevertheless, the whole business, greatly aided by Willkie’s boner has strengthened the Roosevelt Administration. It should be obvious to everyone that Roosevelt’s fundamental ideas on property are basically the same as Willkie’s. Both are wedded to capitalism and the preservation of property rights.
The idea that industry is being conscripted is a pure fake. If that were the case, it would hardly be necessary to spend so much time discussing the excess profits bill. Industry which is conscripted, wealth which is drafted, won’t have to haggle about profit. IT WILL BE OWNED AND OPERATED BY THE GOVERNMENT. THAT IS REAL CONSCRIPTION OF INDUSTRY. To be effective, however, it must be under the control of the workers. As long as the capitalists own the means of production, and J.P. Morgan can make and unmake Presidents, any conscription of industry will safeguard property rights.
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<h2>Frank Demby</h2>
<h1>War Taxes Mount</h1>
<h3>(August 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_32" target="new">Vol. 5 No. 32</a>, 11 August 1941, p. 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">After three months of consideration the House Ways and Means Committee brought in a proposal to raise $3,529,200,000 in new taxes. It is expected that the federal government will raise between nine and ten billion dollars from existing taxes. The additional revenue, provided there is no increase in expenditures, will be covered by taxes. The remainder will be raised through borrowing. It also means that this is the largest tax bill in the history of the country. Just a reminder that war costs money.</p>
<p>The bill is really a case of the mountain laboring and bringing forth a mouse. None of the basic issues are tackled. Recognizing that this is decidedly a compromise measure. Representative Doughton, chairman of the Ways and Means Committee, following the lead of President Roosevelt, announced, in pleading for a “gag” rule to speed the debate, that the committee would have to consider a new tax bill for next year which would probably broaden the income tax base and levy a federal sales tax. These have been the basic demands of the bosses, who, as usual, try to throw the main burden of taxation onto the backs of the masses. On the other hand, the bill sidesteps the issue of imposing a genuine excess profits tax by merely increasing the excess profits rates a piddling 10 per cent.<br>
</p>
<h4>Joint Returns</h4>
<p class="fst">The most highly publicized feature of the new tax bill – the only part of the bill open to debate in the House of Representatives – is the proposal to compel married couples to file a joint tax return. A storm of protest has risen from press and pulpit against this measure on the ground that it penalizes marriage, will encourage divorce and immorality, and breaks down the sanctity of the home. At this writing it appears that the joint return, designed to raise more than $300 million, will be eliminated.</p>
<p>However, the joint return doesn’t mean higher taxes for the wealthy, for the wives of the rich don’t work. It is true that they may have separate incomes in the form of inheritance or property gifts from their husbands; but the main burden of the joint return would fall on those middle class and working class families where both husband and wife work, with combined incomes ranging from $4,000 to $10,000. Since the greatest number of working women come from the ranks of the working class, a broadening of the income tax base and a lowering of exemptions – as is proposed for next year – would result in the joint return affecting the upper strata of the workers more than any other group. This is one of the main dangers inherent in the proposal. On this practical ground alone, leaving aside the fundamental questions of the family and the institution of marriage, the joint return should be opposed.</p>
<p>The bulk of the new tax revenue is to be raised from corporate and individual taxpayers – nearly two and a half billion dollars. In comparing the additional amounts to be raised from corporations and individuals, we see the manner in which the refusal to levy a 100 per cent excess profits tax and substantially higher corporation taxes, is allowing the big bosses to escape at the expense of the middle and working classes. New taxes from corporations are expected to raise $935,000,000. New taxes from individuals will raise an expected $1,521,000,000 (the big increase in the surtax rates falling on those making from $2,000 net income to $10,000 net income). This means an increase of 72.7 per cent in the taxes paid by individuals as against an increase of only 35.8 per cent in the taxes paid by corporations. In the words of Godfrey N. Nelson, tax expert of the <strong>New York Times</strong>: “Charging themselves with the duty of raising an enormous additional amount of revenue, the Congress has made the burden of such load to fall disproportionately upon the individual taxpayer. It has been said that we shall pay the additional taxes even if we have to borrow on do so.” To enable the middle class to pay these new taxes, the Treasury is obligingly selling “tax anticipation” notes.<br>
</p>
<h4>Power to Destroy</h4>
<p class="fst">”The power to tax,”’ goes the well known saying, “is the power to destroy.” In this case, what is involved is the beginning of the destruction of the middle class, the traditional bulwark of American capitalism. The far-reaching social implication of burden of the middle class will only be seen in the years to come, but in its own way it is already an indication of the approaching revolutionary crisis in the United States. One of the most penetrating predictions of Marx was that in which he predicted the gradual disappearance of the middle class as capitalism matured and began to decay. This prediction has often been attacked as incorrect, and the United States, with its vast middle class, cited as proof of Marx’s error. But, even if somewhat belated, the middle class IS being wiped out (by the big capitalists). The process, which began with the onset of the great depression of 1929, – particularly on the tax front.</p>
<p>The impression has been carefully cultivated by the boss press that the workers have escaped “paying their share of the new taxes.” The Republican minority of the Ways and Means Committee, while it couldn’t agree on any specific measures, submitted a minority report attacking the New Deal spending and calling virtually for the elimination of WPA, NYA and CCC appropriations. To them, of course, the existence of 5,000,000 and more unemployed is of no importance. But the workers have not escaped. They will not be taxed directly, rather they will be made to suffer the most vicious forms of taxation – excise or indirect taxes. An additional $900,000,000 is to be raised in excise taxes. These taxes on various commodities and services (mostly necessities) are, of course, passed on to the consumer in the form of higher prices. It means that those who can least afford to pay them will bear the overwhelming burden of these new taxes. It also means that at the same time that the government is supposed to be taking action to prevent rising prices, it introduces a tax bill which must result in higher prices! However, we should not expect logic from capitalist politicians.</p>
<p>Some of the increases in existing excise taxes as well as some of the new excise taxes are as follows: distilled spirits, an increase of $1.00 a gallon to yield $122,300,000; wines, increased rates to yield $5,000,000; automobiles, tax increased from 3½ to 7 per cent, to yield $74,900,000; tires and tubes, increased rates to yield $44,600,000; matches, a tax of 2 cents per 1,000, to yield $21,000,000; playing cards, rate increased from 11 to 13 cents, to yield $1,000,000; radios and receiving sets, rate increased from 5½ to 10 per cent, to yield $9,400,000; telephone bills, a tax of 5 per cent, to yield $43,600.000; transportation of persons, which excludes tickets for 30 days or less, a tax of 5 per cent, to yield $36,500,000; a “use” tax on automobiles, yachts and airplanes of $5.00 each per year, to yield $180,200,000 (imagine placing yachts and airplanes in the same class as second-hand automobiles!); bowling alley, pool or billiard table tax, $15 each, to yield $3,400.000; soft drinks, a tax of one-sixth cent per bottle or its equivalent, to yield $22,600,000; also a 10 per cent tax on the following items: phonographs and records, musical instruments, sporting goods, luggage, electrical appliances, photographic apparatus, electric signs, business and store machines, rubber articles, washing machines for commercial laundries, jewelry, furs and toilet preparations.</p>
<p>For those making under $2,000 a year – that is, 70 per cent of the nation – these excise taxes alone (not counting the state taxes and “voluntary” contributions of various types) will mean a greater increase in their already high taxes than is the case with the wealthy. The writing of a real tax bill – <em>one which would raise the money from those who can afford it by a capital levy on all those with incomes over $10,000 a year</em> – that, of course, is too much to expect from those docile representatives of big business in Congress. But we should at least expect the honorable congressmen to read their own tax bill – even if they don’t debate it. That is most unlikely since only three days have been allowed to consider a bill which is 95 pages in length!</p>
<p>Thus does the Congress, by its very actions, reveal the fakery and hypocrisy which is involved in every tax bill.</p>
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Frank Demby
War Taxes Mount
(August 1941)
From Labor Action, Vol. 5 No. 32, 11 August 1941, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
After three months of consideration the House Ways and Means Committee brought in a proposal to raise $3,529,200,000 in new taxes. It is expected that the federal government will raise between nine and ten billion dollars from existing taxes. The additional revenue, provided there is no increase in expenditures, will be covered by taxes. The remainder will be raised through borrowing. It also means that this is the largest tax bill in the history of the country. Just a reminder that war costs money.
The bill is really a case of the mountain laboring and bringing forth a mouse. None of the basic issues are tackled. Recognizing that this is decidedly a compromise measure. Representative Doughton, chairman of the Ways and Means Committee, following the lead of President Roosevelt, announced, in pleading for a “gag” rule to speed the debate, that the committee would have to consider a new tax bill for next year which would probably broaden the income tax base and levy a federal sales tax. These have been the basic demands of the bosses, who, as usual, try to throw the main burden of taxation onto the backs of the masses. On the other hand, the bill sidesteps the issue of imposing a genuine excess profits tax by merely increasing the excess profits rates a piddling 10 per cent.
Joint Returns
The most highly publicized feature of the new tax bill – the only part of the bill open to debate in the House of Representatives – is the proposal to compel married couples to file a joint tax return. A storm of protest has risen from press and pulpit against this measure on the ground that it penalizes marriage, will encourage divorce and immorality, and breaks down the sanctity of the home. At this writing it appears that the joint return, designed to raise more than $300 million, will be eliminated.
However, the joint return doesn’t mean higher taxes for the wealthy, for the wives of the rich don’t work. It is true that they may have separate incomes in the form of inheritance or property gifts from their husbands; but the main burden of the joint return would fall on those middle class and working class families where both husband and wife work, with combined incomes ranging from $4,000 to $10,000. Since the greatest number of working women come from the ranks of the working class, a broadening of the income tax base and a lowering of exemptions – as is proposed for next year – would result in the joint return affecting the upper strata of the workers more than any other group. This is one of the main dangers inherent in the proposal. On this practical ground alone, leaving aside the fundamental questions of the family and the institution of marriage, the joint return should be opposed.
The bulk of the new tax revenue is to be raised from corporate and individual taxpayers – nearly two and a half billion dollars. In comparing the additional amounts to be raised from corporations and individuals, we see the manner in which the refusal to levy a 100 per cent excess profits tax and substantially higher corporation taxes, is allowing the big bosses to escape at the expense of the middle and working classes. New taxes from corporations are expected to raise $935,000,000. New taxes from individuals will raise an expected $1,521,000,000 (the big increase in the surtax rates falling on those making from $2,000 net income to $10,000 net income). This means an increase of 72.7 per cent in the taxes paid by individuals as against an increase of only 35.8 per cent in the taxes paid by corporations. In the words of Godfrey N. Nelson, tax expert of the New York Times: “Charging themselves with the duty of raising an enormous additional amount of revenue, the Congress has made the burden of such load to fall disproportionately upon the individual taxpayer. It has been said that we shall pay the additional taxes even if we have to borrow on do so.” To enable the middle class to pay these new taxes, the Treasury is obligingly selling “tax anticipation” notes.
Power to Destroy
”The power to tax,”’ goes the well known saying, “is the power to destroy.” In this case, what is involved is the beginning of the destruction of the middle class, the traditional bulwark of American capitalism. The far-reaching social implication of burden of the middle class will only be seen in the years to come, but in its own way it is already an indication of the approaching revolutionary crisis in the United States. One of the most penetrating predictions of Marx was that in which he predicted the gradual disappearance of the middle class as capitalism matured and began to decay. This prediction has often been attacked as incorrect, and the United States, with its vast middle class, cited as proof of Marx’s error. But, even if somewhat belated, the middle class IS being wiped out (by the big capitalists). The process, which began with the onset of the great depression of 1929, – particularly on the tax front.
The impression has been carefully cultivated by the boss press that the workers have escaped “paying their share of the new taxes.” The Republican minority of the Ways and Means Committee, while it couldn’t agree on any specific measures, submitted a minority report attacking the New Deal spending and calling virtually for the elimination of WPA, NYA and CCC appropriations. To them, of course, the existence of 5,000,000 and more unemployed is of no importance. But the workers have not escaped. They will not be taxed directly, rather they will be made to suffer the most vicious forms of taxation – excise or indirect taxes. An additional $900,000,000 is to be raised in excise taxes. These taxes on various commodities and services (mostly necessities) are, of course, passed on to the consumer in the form of higher prices. It means that those who can least afford to pay them will bear the overwhelming burden of these new taxes. It also means that at the same time that the government is supposed to be taking action to prevent rising prices, it introduces a tax bill which must result in higher prices! However, we should not expect logic from capitalist politicians.
Some of the increases in existing excise taxes as well as some of the new excise taxes are as follows: distilled spirits, an increase of $1.00 a gallon to yield $122,300,000; wines, increased rates to yield $5,000,000; automobiles, tax increased from 3½ to 7 per cent, to yield $74,900,000; tires and tubes, increased rates to yield $44,600,000; matches, a tax of 2 cents per 1,000, to yield $21,000,000; playing cards, rate increased from 11 to 13 cents, to yield $1,000,000; radios and receiving sets, rate increased from 5½ to 10 per cent, to yield $9,400,000; telephone bills, a tax of 5 per cent, to yield $43,600.000; transportation of persons, which excludes tickets for 30 days or less, a tax of 5 per cent, to yield $36,500,000; a “use” tax on automobiles, yachts and airplanes of $5.00 each per year, to yield $180,200,000 (imagine placing yachts and airplanes in the same class as second-hand automobiles!); bowling alley, pool or billiard table tax, $15 each, to yield $3,400.000; soft drinks, a tax of one-sixth cent per bottle or its equivalent, to yield $22,600,000; also a 10 per cent tax on the following items: phonographs and records, musical instruments, sporting goods, luggage, electrical appliances, photographic apparatus, electric signs, business and store machines, rubber articles, washing machines for commercial laundries, jewelry, furs and toilet preparations.
For those making under $2,000 a year – that is, 70 per cent of the nation – these excise taxes alone (not counting the state taxes and “voluntary” contributions of various types) will mean a greater increase in their already high taxes than is the case with the wealthy. The writing of a real tax bill – one which would raise the money from those who can afford it by a capital levy on all those with incomes over $10,000 a year – that, of course, is too much to expect from those docile representatives of big business in Congress. But we should at least expect the honorable congressmen to read their own tax bill – even if they don’t debate it. That is most unlikely since only three days have been allowed to consider a bill which is 95 pages in length!
Thus does the Congress, by its very actions, reveal the fakery and hypocrisy which is involved in every tax bill.
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<h2>Frank Demby</h2>
<h1>After the War, What?</h1>
<h3>(September 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_35" target="new">Vol. 5 No. 35</a>, 1 September 1941, p. 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">One of the most significant of recent developments is the publication by the National Resources Planning Board of a pamphlet entitled <strong>After Defense, What?</strong> Its contents are summarized in the <strong>New York Times</strong> of August 13.</p>
<p>The board, in outlining its post-war economic program, based itself on the assumption that World War II will end in 1944, at which time it estimated that the U.S. will be using 23,000,000 workers in war industries, plus 3,500,000 men in the armed services. As an indication of what is in store for us for the next three years, the report is very interesting. Its real value lies, however, in two extremely important things:</p>
<ul>
<li>First, there is the recognition on the part of a semi-official government agency that we must plan NOW to prepare for the “colossal undertaking” of transferring these millions of men to peacetime activities, if complete economic breakdown and utter chaos are to be avoided.<br>
</li>
<li><em>Second, and most important, is the complete inadequacy of the program proposed by the National Resources Planning Board to accomplish this aim. It reveals, as clearly as anything can, the bankruptcy of capitalism.</em></li>
</ul>
<p class="fst">It does not require much imagination to picture what will happen if the usual post-war depression is allowed to develop. Whether it be in 1944 or later, the questions asked by the board are of fundamental importance and are in the mind of every thinking person today: “<em>What happens to the demobilized workers and veterans and their families? Will they be without work? Will they stop producing? Will the national income drop fifteen billion dollars or so as soon as the pent-Up demands are met? Will the succeeding drop in consumption throw others out of work and reduce national production and income another ten to twenty billion dollars?”</em></p>
<p class="quoteb">“If so,” says the board, “we shall be back again in the valley of the depression and a terrific new strain will be thrown on our whole system of political, social and economic life. The American people will never stand for this. Sooner or later they will step in and refuse to let matters work themselves out.”</p>
<p class="fst"><em>In plain English, then, these learned intellects are telling the bosses: “If you don’t want a revolution after the war, you’ve got to take steps to prevent it now; continuing your usual policy of doing nothing will prove fatal.”</em></p>
<p>Let me put the matter another way. The era of free, competitive capitalism is over. It is not merely dying. It is dead. It cannot be resurrected, no matter how many pious declarations Messrs. Roosevelt and Churchill issue. The National Resources Planning Board – let credit be given where credit is due – at least recognizes this incontestable fact. But the real problem is HOW TO PLAN for maintaining maximum production, full employment and rising standards of living in peacetime. Here the capitalist statesmen and economists, when they don’t show annoyance at the posing of such far-off problems (peace aims), are hopelessly confused and bewildered. And no wonder! They sense only too well the terrible longing of the masses for peace, security and freedom. But all they can offer the people under an outworn capitalist system is the peace of the graveyard, the security of regimentation and the freedom of the concentration camp. <em>The difficulty lies in the fact that the only type of planning possible under capitalism is the fascist type, which inevitably means more wars and widespread misery and starvation.</em></p>
<p>How to plan the abolition of poverty in the midst of plenty – that is the question. The National Resources Planning Board would have government, business, workers and farmers cooperate now in the establishment of a planned transition to peacetime activity. Among their suggested plans are: a dismissal allowance for all demobilized men; gradual liquidation of government contracts, priorities and price controls; public works projects, particularly transportation and housing; research to develop new industrial products; plans to expand the service industries – more medical care, education and entertainment; new forms of social security and work relief; new financial plans for covering the costs of these projects; and lease-lend aid for the peoples of Europe until they can get on their feet.</p>
<p><em>Let us grant that all of these are worthwhile aims. Can they be achieved under capitalism? Not in any genuine manner, such as will guarantee full employment and a rising standard of living. Why haven’t we had genuine slum-clearance and low-cost housing projects prior to the war? Why, in spite of all the New Deal reforms, does one-third of the nation remain ill-fed, ill-housed and ill-clothed? As soon as the government tries to respond to the pressure exerted by masses of discontented people by instituting a few reforms, what happens? Big business, through its control of all the avenues of propaganda, turns loose its high-paid publicists, who unleash clever campaigns to show that such reforms are too costly and will bankrupt the government, or that they are illegal and unconstitutional, or that they undermine the system of free, private enterprise.</em></p>
<p>If the government sells electricity at cost, which can easily be done, as demonstrated by the TVA, this is government competition with private business. Private business must operate at a profit. To get its profits it must sell things at two or three times the rates charged by government-owned enterprise. Further, monopolies have arisen in every industry for the simple reason that, through monopolies, production can be restricted, prices can be raised, wages can be lowered – and thus profits can be maintained at a high level.</p>
<p>Unfortunately for the National Resources Planning Board, the problem begins where they end. The wheels of industry will not turn, under capitalism, unless the manufacturers, bankers and landlords can get their profits. Is there any reason why manufacturers who refused to manufacture war materials under the “defense” program until their profits were guaranteed by the government, should suddenly manufacture the necessities of life once the war is over – unless they can likewise get their profits? Countless inventions have long been suppressed by big corporations because releasing them would interfere with their profits on existing investments. Why should they now develop new industries on a large scale so as to give employment to everyone?</p>
<p>There was a time when the capitalists, in their pursuit of profits, did bring about a general improvement in living conditions – although millions still lived in poverty. But, as the saying goes, “Them days are gone forever.” Profits can be maintained today only by having the masses suffer a steadily declining standard of living. This soon makers all reforms a luxury and an expense that the capitalists cannot afford. <em>Once the monopoly capitalists are confronted with such a situation, they finance the fascist gangsters to power. The recent history of Europe leaves no doubt on this score.</em></p>
<p>But even if a schoolchild could propose more concrete and realistic plans than those of the National Resources Planning Board, this does not mean that the workers must give up all hope of a decent life. The Brookings Institute, a very conservative institution, long ago estimated that the U.S., with its abundant resources and technical skills, can give everyone the equivalent of a $5,000 a year income.</p>
<p>The trade unions must take up the problem and the suggestions of the National Resources Planning Board. They must establish their own planning boards. They must bombard Washington with concrete, realistic plans for producing enough food, clothing, shelter and other things for everyone. They must educate the country so that the masses understand how the good things of life can be distributed to everybody. And if profits have to be sacrificed (AS THEY MUST) in order to achieve a decent, rational and democratic existence – well, then let profits be sacrificed. Why should the selfish interests and privileges of a mere handful of people condemn the overwhelming majority of the population to perpetual hunger and misery?</p>
<p><em>And we are confident that once the workers start thinking about these problems – which are immediate and practical problems – they will find that only a workers’ government, democratically organized and controlled, producing for the use and needs of the population, can solve the manifold problems that confront us today.</em></p>
<p class="link"> <br>
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Frank Demby
After the War, What?
(September 1941)
From Labor Action, Vol. 5 No. 35, 1 September 1941, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
One of the most significant of recent developments is the publication by the National Resources Planning Board of a pamphlet entitled After Defense, What? Its contents are summarized in the New York Times of August 13.
The board, in outlining its post-war economic program, based itself on the assumption that World War II will end in 1944, at which time it estimated that the U.S. will be using 23,000,000 workers in war industries, plus 3,500,000 men in the armed services. As an indication of what is in store for us for the next three years, the report is very interesting. Its real value lies, however, in two extremely important things:
First, there is the recognition on the part of a semi-official government agency that we must plan NOW to prepare for the “colossal undertaking” of transferring these millions of men to peacetime activities, if complete economic breakdown and utter chaos are to be avoided.
Second, and most important, is the complete inadequacy of the program proposed by the National Resources Planning Board to accomplish this aim. It reveals, as clearly as anything can, the bankruptcy of capitalism.
It does not require much imagination to picture what will happen if the usual post-war depression is allowed to develop. Whether it be in 1944 or later, the questions asked by the board are of fundamental importance and are in the mind of every thinking person today: “What happens to the demobilized workers and veterans and their families? Will they be without work? Will they stop producing? Will the national income drop fifteen billion dollars or so as soon as the pent-Up demands are met? Will the succeeding drop in consumption throw others out of work and reduce national production and income another ten to twenty billion dollars?”
“If so,” says the board, “we shall be back again in the valley of the depression and a terrific new strain will be thrown on our whole system of political, social and economic life. The American people will never stand for this. Sooner or later they will step in and refuse to let matters work themselves out.”
In plain English, then, these learned intellects are telling the bosses: “If you don’t want a revolution after the war, you’ve got to take steps to prevent it now; continuing your usual policy of doing nothing will prove fatal.”
Let me put the matter another way. The era of free, competitive capitalism is over. It is not merely dying. It is dead. It cannot be resurrected, no matter how many pious declarations Messrs. Roosevelt and Churchill issue. The National Resources Planning Board – let credit be given where credit is due – at least recognizes this incontestable fact. But the real problem is HOW TO PLAN for maintaining maximum production, full employment and rising standards of living in peacetime. Here the capitalist statesmen and economists, when they don’t show annoyance at the posing of such far-off problems (peace aims), are hopelessly confused and bewildered. And no wonder! They sense only too well the terrible longing of the masses for peace, security and freedom. But all they can offer the people under an outworn capitalist system is the peace of the graveyard, the security of regimentation and the freedom of the concentration camp. The difficulty lies in the fact that the only type of planning possible under capitalism is the fascist type, which inevitably means more wars and widespread misery and starvation.
How to plan the abolition of poverty in the midst of plenty – that is the question. The National Resources Planning Board would have government, business, workers and farmers cooperate now in the establishment of a planned transition to peacetime activity. Among their suggested plans are: a dismissal allowance for all demobilized men; gradual liquidation of government contracts, priorities and price controls; public works projects, particularly transportation and housing; research to develop new industrial products; plans to expand the service industries – more medical care, education and entertainment; new forms of social security and work relief; new financial plans for covering the costs of these projects; and lease-lend aid for the peoples of Europe until they can get on their feet.
Let us grant that all of these are worthwhile aims. Can they be achieved under capitalism? Not in any genuine manner, such as will guarantee full employment and a rising standard of living. Why haven’t we had genuine slum-clearance and low-cost housing projects prior to the war? Why, in spite of all the New Deal reforms, does one-third of the nation remain ill-fed, ill-housed and ill-clothed? As soon as the government tries to respond to the pressure exerted by masses of discontented people by instituting a few reforms, what happens? Big business, through its control of all the avenues of propaganda, turns loose its high-paid publicists, who unleash clever campaigns to show that such reforms are too costly and will bankrupt the government, or that they are illegal and unconstitutional, or that they undermine the system of free, private enterprise.
If the government sells electricity at cost, which can easily be done, as demonstrated by the TVA, this is government competition with private business. Private business must operate at a profit. To get its profits it must sell things at two or three times the rates charged by government-owned enterprise. Further, monopolies have arisen in every industry for the simple reason that, through monopolies, production can be restricted, prices can be raised, wages can be lowered – and thus profits can be maintained at a high level.
Unfortunately for the National Resources Planning Board, the problem begins where they end. The wheels of industry will not turn, under capitalism, unless the manufacturers, bankers and landlords can get their profits. Is there any reason why manufacturers who refused to manufacture war materials under the “defense” program until their profits were guaranteed by the government, should suddenly manufacture the necessities of life once the war is over – unless they can likewise get their profits? Countless inventions have long been suppressed by big corporations because releasing them would interfere with their profits on existing investments. Why should they now develop new industries on a large scale so as to give employment to everyone?
There was a time when the capitalists, in their pursuit of profits, did bring about a general improvement in living conditions – although millions still lived in poverty. But, as the saying goes, “Them days are gone forever.” Profits can be maintained today only by having the masses suffer a steadily declining standard of living. This soon makers all reforms a luxury and an expense that the capitalists cannot afford. Once the monopoly capitalists are confronted with such a situation, they finance the fascist gangsters to power. The recent history of Europe leaves no doubt on this score.
But even if a schoolchild could propose more concrete and realistic plans than those of the National Resources Planning Board, this does not mean that the workers must give up all hope of a decent life. The Brookings Institute, a very conservative institution, long ago estimated that the U.S., with its abundant resources and technical skills, can give everyone the equivalent of a $5,000 a year income.
The trade unions must take up the problem and the suggestions of the National Resources Planning Board. They must establish their own planning boards. They must bombard Washington with concrete, realistic plans for producing enough food, clothing, shelter and other things for everyone. They must educate the country so that the masses understand how the good things of life can be distributed to everybody. And if profits have to be sacrificed (AS THEY MUST) in order to achieve a decent, rational and democratic existence – well, then let profits be sacrificed. Why should the selfish interests and privileges of a mere handful of people condemn the overwhelming majority of the population to perpetual hunger and misery?
And we are confident that once the workers start thinking about these problems – which are immediate and practical problems – they will find that only a workers’ government, democratically organized and controlled, producing for the use and needs of the population, can solve the manifold problems that confront us today.
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<h2>Frank Demby</h2>
<h1>Treasury Plans War Cut in Wages!</h1>
<h4>Wants Labor To Pay for Boss War by ‘Savings’</h4>
<h3>(November 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_35" target="new">Vol. 5 No. 45</a>, 10 November 1941, pp. 1 & 4.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst"><strong>The Treasury Department has announced that before the end of the year a comprehensive plan will be introduced into Congress for cutting down the “excess” purchasing power of the American masses. The central feature of this “anti-inflationary” program will be a tremendous increase in social security payroll taxes. The figure of 5 per cent has been publicly mentioned.</strong></p>
<p><strong>At present, employee members of the old age pension system automatically have 1 per cent of their wage deducted from their pay envelopes. This sum, together with the employer’s contribution an equal sum for each worker, goes toward the creation of a survivor’s insurance fund. When a worker reaches the age of 65 he is then entitled to certain benefit payments for the rest of his life.</strong></p>
<p><em>This system, known as social security, was originally designed to solve the problem of old age insecurity.</em> It is not to be confused with another aspect of the same law – unemployment insurance – which operates through the states. In spite of numerous flaws and injustices, social security was generally accepted as a step in the right direction. Now, however, under the pressure of tremendous war expenditures, <em>this system is to be perverted into a means for making the masses pay for the boss war, lowering the standard of living of the average worker and, ultimately, destroying the old age pension system</em>.</p>
<p>Just exactly what changes are being discussed by those entrusted with the safeguarding of our money is difficult to say, as it doesn’t seem to occur to Mr. Morgenthau and Mr. Roosevelt that the workers ARE interested in the fate of their own pension system, and would like to have a public discussion of any proposals that are being made. It has been rumored, for example, that the social security system is to be broadened to include many not now covered, as farmers and government employees. If the “contribution” of the worker is to be increased to 5 per cent (and this apparently is the smallest figure under consideration), will the contribution of the employer also be increased to 5 per cent? <em>Absolute silence from Treasury officials!</em> If the workers contribute five times as much as previously, will their benefits increase by five times? <em>No answer!</em> Will the benefits increase at all? Still no answer, but one detects an embarrassed silence such as is usually present when you apprehend a person in the act of doing something wrong.</p>
<p>Above all, what relevance has it to the needs of the working class? There are now millions upon millions of dollars in the social security fund, of which about 90 per cent has been “borrowed” by the government for war purposes. The new proposal is therefore obviously designed not to safeguard the security of the worker but to get more money for the bosses’ war!</p>
<p>The bosses undoubtedly figure that this subject is too “complicated” for the average worker to understand. It involves such matters as inflation, taxation and finance. The worker, in the mind of the boss, is too dumb to discuss these matters; he should merely concern himself with sweating, toiling and bleeding so that the bosses can make more profits, and he should leave these mysterious matters to the representatives of the bosses, like Mr. Morgenthau, who will take care of everything.</p>
<p><em>Suppose, however, that somebody proposed that you take a 5 per cent wage cut. You would want to discuss it, wouldn’t you, especially with the wife complaining that the cost of everything is going sky-high? And even if you were told that by taking a 5 per cent wage cut, you would be stopping prices from going up, we are absolutely confident that the workers would want to discuss such a proposal. And yet, this, in reality, is what is being proposed. Of course, the bosses don’t say that this is a wage cut. They will tell you that you will be saving your money and that you will get it back when the “emergency” is over, when you’ll need it.</em><br>
</p>
<h4>The Keynes Plan</h4>
<p class="fst">This is the line that the bosses of England are handing out to the British workers. There, a famous economist by the name of John Maynard Keynes, who is concerned with the problem of making capitalism work, proposed at the beginning of the war his “deferred savings” plan. The trouble, says Mr. Keynes, is that under a war economy less and less of the necessities of life are produced. The war needs the factories and the machines, the raw materials and the labor. So we are forced to cut down on production of consumer goods. At the same time, more workers are being employed in the war industries. This means more money in the hands of the workers. In other words, the demand for consumer goods is, increasing at the same time that the supply is being reduced. Such a situation must result in rising prices – that is, in inflation.</p>
<p><em>This is bad, so the only solution, according to Mr. Keynes, is to reduce the demand of the workers for the necessities of life. Let 5 per cent of the worker’s wage be deducted from his payroll. This will be a sort of forced savings. The government can use this money to finance the cost of the war. Then, when the war is over, the money which the worker loaned the government will be returned to him, and there will be a big demand so that manufacturers will find it profitable to produce consumer goods once again. England has adopted the Keynes “deferred savings” plan. As a reward, Mr. Keynes was just elected as one of the directors of the Bank of England.</em></p>
<p>Mr. Keynes made a trip to the United States earlier this year. At that time, it was reported that he had discussed his plan with Treasury officials. Apparently, we are now to receive the fruits of this visit. For, it should be obvious that an increase of the social security tax to 5 per cent is merely a different form of carrying out the same basic idea.</p>
<p>At the same time that Mr. Morgenthau made his announcement in Washington, a small item in the financial section of the newspapers announced that Dr. Fritz Reinhardt, assistant Finance Minister of Germany, had proposed to the German workers the development of “iron savings accounts.” These accounts cannot be touched until one year after the war is over. The amount that an individual worker can save is limited and is tax exempt. We do not know if Mr. Keynes made a trip to Berlin in order to expound his theories to the Nazis, but we do know that the Nazis have adopted and perfected his theories. We also know that if the German system is compulsory savings, as the American press was quick to point out, then Mr. Morgenthau’s proposal is also compulsory savings, in spite of his denial.<br>
</p>
<h4>Lowers Living Standard</h4>
<p class="fst"><em>We object to the proposal of increased social security taxes because it is unnecessary, because it will not prevent inflation and because, ultimately, it will wreck the social security system. It is unnecessary because a genuine, democratic approach to the problem of preventing inflation would start with a real 100 PER CENT EXCESS PROFITS TAX. If it is not profitable to raise prices (because the extra profits will be taken away through taxes), the biggest incentive that the bosses have to raise prices will be destroyed.</em> Further, this American adaptation of the Keynes scheme will not prevent inflation, <em>unless at the same time, rigid totalitarian controls are introduced</em>. By themselves, <em>forced savings can only mean a LOWER STANDARD OF LIVING and will throw the main burden of financing the war onto the backs of the masses</em>.</p>
<p>Finally, the question must be asked: where will the government get the money to pay back these forced savings, once the war is over? The answer is that it can’t unless it pays back in inflated dollars, which would mean a worthless currency. We shall return again to this question. Meanwhile let’s hear from our readers and let every worker raise the problem in his trade union!</p>
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Frank Demby
Treasury Plans War Cut in Wages!
Wants Labor To Pay for Boss War by ‘Savings’
(November 1941)
From Labor Action, Vol. 5 No. 45, 10 November 1941, pp. 1 & 4.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Treasury Department has announced that before the end of the year a comprehensive plan will be introduced into Congress for cutting down the “excess” purchasing power of the American masses. The central feature of this “anti-inflationary” program will be a tremendous increase in social security payroll taxes. The figure of 5 per cent has been publicly mentioned.
At present, employee members of the old age pension system automatically have 1 per cent of their wage deducted from their pay envelopes. This sum, together with the employer’s contribution an equal sum for each worker, goes toward the creation of a survivor’s insurance fund. When a worker reaches the age of 65 he is then entitled to certain benefit payments for the rest of his life.
This system, known as social security, was originally designed to solve the problem of old age insecurity. It is not to be confused with another aspect of the same law – unemployment insurance – which operates through the states. In spite of numerous flaws and injustices, social security was generally accepted as a step in the right direction. Now, however, under the pressure of tremendous war expenditures, this system is to be perverted into a means for making the masses pay for the boss war, lowering the standard of living of the average worker and, ultimately, destroying the old age pension system.
Just exactly what changes are being discussed by those entrusted with the safeguarding of our money is difficult to say, as it doesn’t seem to occur to Mr. Morgenthau and Mr. Roosevelt that the workers ARE interested in the fate of their own pension system, and would like to have a public discussion of any proposals that are being made. It has been rumored, for example, that the social security system is to be broadened to include many not now covered, as farmers and government employees. If the “contribution” of the worker is to be increased to 5 per cent (and this apparently is the smallest figure under consideration), will the contribution of the employer also be increased to 5 per cent? Absolute silence from Treasury officials! If the workers contribute five times as much as previously, will their benefits increase by five times? No answer! Will the benefits increase at all? Still no answer, but one detects an embarrassed silence such as is usually present when you apprehend a person in the act of doing something wrong.
Above all, what relevance has it to the needs of the working class? There are now millions upon millions of dollars in the social security fund, of which about 90 per cent has been “borrowed” by the government for war purposes. The new proposal is therefore obviously designed not to safeguard the security of the worker but to get more money for the bosses’ war!
The bosses undoubtedly figure that this subject is too “complicated” for the average worker to understand. It involves such matters as inflation, taxation and finance. The worker, in the mind of the boss, is too dumb to discuss these matters; he should merely concern himself with sweating, toiling and bleeding so that the bosses can make more profits, and he should leave these mysterious matters to the representatives of the bosses, like Mr. Morgenthau, who will take care of everything.
Suppose, however, that somebody proposed that you take a 5 per cent wage cut. You would want to discuss it, wouldn’t you, especially with the wife complaining that the cost of everything is going sky-high? And even if you were told that by taking a 5 per cent wage cut, you would be stopping prices from going up, we are absolutely confident that the workers would want to discuss such a proposal. And yet, this, in reality, is what is being proposed. Of course, the bosses don’t say that this is a wage cut. They will tell you that you will be saving your money and that you will get it back when the “emergency” is over, when you’ll need it.
The Keynes Plan
This is the line that the bosses of England are handing out to the British workers. There, a famous economist by the name of John Maynard Keynes, who is concerned with the problem of making capitalism work, proposed at the beginning of the war his “deferred savings” plan. The trouble, says Mr. Keynes, is that under a war economy less and less of the necessities of life are produced. The war needs the factories and the machines, the raw materials and the labor. So we are forced to cut down on production of consumer goods. At the same time, more workers are being employed in the war industries. This means more money in the hands of the workers. In other words, the demand for consumer goods is, increasing at the same time that the supply is being reduced. Such a situation must result in rising prices – that is, in inflation.
This is bad, so the only solution, according to Mr. Keynes, is to reduce the demand of the workers for the necessities of life. Let 5 per cent of the worker’s wage be deducted from his payroll. This will be a sort of forced savings. The government can use this money to finance the cost of the war. Then, when the war is over, the money which the worker loaned the government will be returned to him, and there will be a big demand so that manufacturers will find it profitable to produce consumer goods once again. England has adopted the Keynes “deferred savings” plan. As a reward, Mr. Keynes was just elected as one of the directors of the Bank of England.
Mr. Keynes made a trip to the United States earlier this year. At that time, it was reported that he had discussed his plan with Treasury officials. Apparently, we are now to receive the fruits of this visit. For, it should be obvious that an increase of the social security tax to 5 per cent is merely a different form of carrying out the same basic idea.
At the same time that Mr. Morgenthau made his announcement in Washington, a small item in the financial section of the newspapers announced that Dr. Fritz Reinhardt, assistant Finance Minister of Germany, had proposed to the German workers the development of “iron savings accounts.” These accounts cannot be touched until one year after the war is over. The amount that an individual worker can save is limited and is tax exempt. We do not know if Mr. Keynes made a trip to Berlin in order to expound his theories to the Nazis, but we do know that the Nazis have adopted and perfected his theories. We also know that if the German system is compulsory savings, as the American press was quick to point out, then Mr. Morgenthau’s proposal is also compulsory savings, in spite of his denial.
Lowers Living Standard
We object to the proposal of increased social security taxes because it is unnecessary, because it will not prevent inflation and because, ultimately, it will wreck the social security system. It is unnecessary because a genuine, democratic approach to the problem of preventing inflation would start with a real 100 PER CENT EXCESS PROFITS TAX. If it is not profitable to raise prices (because the extra profits will be taken away through taxes), the biggest incentive that the bosses have to raise prices will be destroyed. Further, this American adaptation of the Keynes scheme will not prevent inflation, unless at the same time, rigid totalitarian controls are introduced. By themselves, forced savings can only mean a LOWER STANDARD OF LIVING and will throw the main burden of financing the war onto the backs of the masses.
Finally, the question must be asked: where will the government get the money to pay back these forced savings, once the war is over? The answer is that it can’t unless it pays back in inflated dollars, which would mean a worthless currency. We shall return again to this question. Meanwhile let’s hear from our readers and let every worker raise the problem in his trade union!
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<h2>Frank Demby</h2>
<h1>New Tax Proposals Hit Those<br>
Who Can Least Afford Them</h1>
<h3>(May 1941)</h3>
<hr width="100%" noshade="noshade" size="1">
<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1941/index.htm#la05_18" target="new">Vol. 5 No. 18</a>, 5 May 1941, p. 2.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">The Treasury Department has recommended to Congress the adoption of new taxes designed to raise slightly more than three and a half billion dollars – about half of the cost of the Lease-Lend program. While it is too early to say definitely what the final bill will be, as the various big business groups are now engaged in the highly edifying American pastime of passing the buck – on to consumers and other business groups – through their powerful lobbies in Washington, all the proposals made point to the strengthening of the already reactionary tax structure of the country.</p>
<p>While the capitalist press has headlined the scheduled increases in the income tax rates, the really significant aspect of the Treasury’s proposals are the additional $1,233,600,000 of indirect taxes. These are the taxes which are passed on to the consumer in the form of higher prices. The workers, those who can least afford it, will foot the largest portion of the bill designed to make the world safe for American imperialism. The middle class (those with incomes between $2,500 and $10,000) will pay the next largest share. And, as usual, the big capitalists will pay the smallest portion of the cost of their war.</p>
<p>Over $200,000,000 will be raised through additional tobacco taxes. This means that cigarettes will go up another two cents a pack. Almost the same sum is expected through a higher liquor tax. This means much higher prices for beer, wines, whiskey, etc. Over $842,000,000 will be obtained through excise taxes on some 25 items; some representing additional taxes on those already in existence, like another cent on each gallon of gasoline (expected to bring in $255,000,000); others representing entirely new taxes, like the proposed one cent a bottle on all soft drinks (expected to bring in $133,500,000). One and a half billion dollars is to be raised through additional income taxes by higher surtax rates on the middle income groups. For example, under the Treasury’s program a married couple with no children who have a net income of $2,500 a year would pay an income tax of $72 instead of the present $11. A single person with a net income of $1,000 who now pays an income tax of $4 would pay $29! Many of those in the middle class (around $5,000) will pay six to seven times their present income taxes.</p>
<p>Compare these proposals witt the measly additional $400,000,000 to be collected in excess profits taxes and you have a true picture of how the capitalists are trying to unload the cost of the war onto the backs of the workers and other people who work for a living. <em>Especially, when it is recalled that the present excess profits lax, which was supposed to bring in close to a billion dollars in 1940 is now estimated as having brought in only $100,000,000!</em></p>
<p>While you are mulling over these typical illustrations of capitalist “justice,” let me spoil your appetite further with these additional items as food for thought:</p>
<ol>
<li>Representative Doughton, chairman of the House Ways and Means Committee, which has charge of the bill, said he expected that “every conceivable tax” might be offered in the committee when it starts to “mark up” the bill within two or three weeks.<br>
</li>
<li>Under present tax schedules, those in the lowest income groups (representing two-thirds of the population) pay 20 per cent of their incomes to the government in taxes (most of them being hidden or indirect taxes) while those in the highest income group (representing one-tenth of one per cent of the population) pay only 38 per cent of their incomes to the government in taxes.<br>
</li>
<li>The new and increased excise taxes will have a cumulative effect in helping to bring about higher prices.</li>
</ol>
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Frank Demby
New Tax Proposals Hit Those
Who Can Least Afford Them
(May 1941)
From Labor Action, Vol. 5 No. 18, 5 May 1941, p. 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Treasury Department has recommended to Congress the adoption of new taxes designed to raise slightly more than three and a half billion dollars – about half of the cost of the Lease-Lend program. While it is too early to say definitely what the final bill will be, as the various big business groups are now engaged in the highly edifying American pastime of passing the buck – on to consumers and other business groups – through their powerful lobbies in Washington, all the proposals made point to the strengthening of the already reactionary tax structure of the country.
While the capitalist press has headlined the scheduled increases in the income tax rates, the really significant aspect of the Treasury’s proposals are the additional $1,233,600,000 of indirect taxes. These are the taxes which are passed on to the consumer in the form of higher prices. The workers, those who can least afford it, will foot the largest portion of the bill designed to make the world safe for American imperialism. The middle class (those with incomes between $2,500 and $10,000) will pay the next largest share. And, as usual, the big capitalists will pay the smallest portion of the cost of their war.
Over $200,000,000 will be raised through additional tobacco taxes. This means that cigarettes will go up another two cents a pack. Almost the same sum is expected through a higher liquor tax. This means much higher prices for beer, wines, whiskey, etc. Over $842,000,000 will be obtained through excise taxes on some 25 items; some representing additional taxes on those already in existence, like another cent on each gallon of gasoline (expected to bring in $255,000,000); others representing entirely new taxes, like the proposed one cent a bottle on all soft drinks (expected to bring in $133,500,000). One and a half billion dollars is to be raised through additional income taxes by higher surtax rates on the middle income groups. For example, under the Treasury’s program a married couple with no children who have a net income of $2,500 a year would pay an income tax of $72 instead of the present $11. A single person with a net income of $1,000 who now pays an income tax of $4 would pay $29! Many of those in the middle class (around $5,000) will pay six to seven times their present income taxes.
Compare these proposals witt the measly additional $400,000,000 to be collected in excess profits taxes and you have a true picture of how the capitalists are trying to unload the cost of the war onto the backs of the workers and other people who work for a living. Especially, when it is recalled that the present excess profits lax, which was supposed to bring in close to a billion dollars in 1940 is now estimated as having brought in only $100,000,000!
While you are mulling over these typical illustrations of capitalist “justice,” let me spoil your appetite further with these additional items as food for thought:
Representative Doughton, chairman of the House Ways and Means Committee, which has charge of the bill, said he expected that “every conceivable tax” might be offered in the committee when it starts to “mark up” the bill within two or three weeks.
Under present tax schedules, those in the lowest income groups (representing two-thirds of the population) pay 20 per cent of their incomes to the government in taxes (most of them being hidden or indirect taxes) while those in the highest income group (representing one-tenth of one per cent of the population) pay only 38 per cent of their incomes to the government in taxes.
The new and increased excise taxes will have a cumulative effect in helping to bring about higher prices.
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<h2>T.N. Vance</h2>
<h1>The Counterfeit Concept of<br>
Countervailing Power</h1>
<h3>(May 1954)</h3>
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<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni54_03" target="new">Vol. XX No. 3</a>, May–June 1954, pp. 99–113.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<p class="fst">The key to the psychology of mid-twentieth century capitalism is the fear of depression. This fear, or sense of insecurity, has been a basic fact of political and social life since the crisis of 1929. Any economist who has any claim whatsoever to being a theorist has been forced to attempt an explanation of the reasons for depressions and, above all, to reassure himself and society at large that there is no need to fear a recurrence of severe depression.</p>
<p>John Kenneth Galbraith – currently Professor of Economics at Harvard University and author of <strong>American Capitalism: The Concept of Countervailing Power</strong> <a href="#n1" name="f1">[1]</a> – is no exception. As a matter of fact, he begins by stating:</p>
<p class="quoteb">The present organization and management of the American economy are also in defiance of the rules – rules that derive their ultimate authority from men of such Newtonian stature as Bentham, Ricardo and Adam Smith. <em>Nevertheless it works, and in the years since World War II quite brilliantly.</em> The fact that it does so, in disregard of precept, has caused men to suppose that all must end in a terrible smash ... It is with this insecurity, in face of success, that this book, in the most general sense, is concerned. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The reason, consequently, that Galbraith’s concept of countervailing power has created somewhat of a stir in certain academic and liberal circles is that he has written a book aimed at reassuring the bourgeoisie and its supporters that there is really nothing much to worry about, that capitalism is functioning on the whole quite well, and that this is almost if not quite the best possible of all possible worlds. The difficulty, according to Galbraith, is that all classes in society have been victims of false or outmoded economic theories. All that is necessary is to change the theory, accept the validity of countervailing power, and <em>presto chango</em> the fear of depression will disappear.</p>
<p>While this represents a rather touching tribute to the power of ideas in molding men’s lives, it constitutes a real distortion of how ideas develop and how they influence the evolution of society. The entire presuppositions of Galbraith’s theory are laid bare by the following extensive quotation from the end of his first chapter:</p>
<p class="quoteb">Here then is the remarkable problem of our time. We find ourselves in these strange days with an economy which, on grounds of sheer physical performance, few are inclined to criticize. Even allowing for the conformist tradition in American social thought, the agreement on the quality of the performance of American capitalism is remarkable. The absence of any plausibly enunciated alternative to the present system is equally remarkable. Yet almost no one feels secure in the present. The conservative sees an omnipotent government busy altering capitalism to some new, unspecified but wholly unpalatable design. Even allowing for the exaggeration which is the common denominator of our political comment and of conservative fears in particular, he apparently feels the danger to be real and imminent. At any given time we are but one session of Congress or one bill removed from a cold revolution. The liberal contemplates with alarm the great corporations which cannot be accommodated to his faith. And, with the conservative, he shares the belief that, whatever the quality of current performance, it is certain not to last. Yet in the present we survive. With the present, given peace, no one is intolerably unhappy.</p>
<p class="quote">It can only be that there is something wrong with the current or accepted interpretation of American capitalism. This, indeed, is the case. Conservatives and liberals, both, are the captives of ideas which cause them to view the world with misgivings or alarm. Neither the structure of the economy nor the role of government conforms to the pattern specified, even demanded, by the ideas they hold. The American government and the American economy are both behaving in brazen defiance of their rules. If their rules were binding, they would already be suffering. The conservative, who has already had two decades of New and Fair Deals would already be dispossessed. The liberal, who has already lived his entire life in an economy of vast corporations, would already be their puppet. Little would be produced; we should all be suffering under the exploitation and struggling to pay for the inefficiency of monopoly. The fact that we have escaped so far means that the trouble lies not with the world but with the ideas by which it is interpreted. It is the ideas which are the source of the insecurity – the insecurity of illusion.</p>
<p class="fst">Whether the average individual is as worried as Galbraith thinks he is about the possibility or imminence of depression, is difficult to ascertain. Galbraith’s worry, however, is genuine. It stems from the destruction of the economic foundations of American liberalism. Capitalist liberalism historically was a nineteenth century phenomenon. With the growth of state monopoly capitalism and of monopoly in general the base of liberalism narrowed until it has reached the point where it has virtually disappeared and genuine liberals are as scarce as hen’s teeth. Sooner or later economic theory must correspond to the facts of economic life. In other words, the superstructure, <em>i.e.</em>, the world of ideas, flows from the foundation, <em>i.e.</em>, the reality.</p>
<p>Liberalism is the child of competitive capitalism, of free enterprise in the true sense of the term. As competition decreased and monopoly grew, it became increasingly difficult for liberals to maintain a theory of liberalism.</p>
<p>Such a theory was badly in need once capitalism entered the stage of permanent crisis following the first world war – and once the authoritarian theories of fascism and Stalinism became fashionable. In the 1930’s the man who saved the day for the liberals was John Maynard Keynes – an English banker who became <em>the</em> bourgeois theorist of the depression era. For it was Keynes who provided the rationale, the justification for state intervention which was absolutely indispensable for the survival of capitalism. In the process, Keynes demolished his predecessors, the classicists and neo- classicists alike.</p>
<p>In an interesting chapter, entitled <em>The Depression Psychosis</em>, Galbraith displays a rather penetrating understanding of Keynes’ rôle. He states:</p>
<p class="quoteb">The ideas which interpreted the depression, and which warned that depression or inflation might be as much a part of the free-enterprise destiny as stable full employment, were those of John Maynard Keynes. A case could easily be made by those who make such cases, that his were the most influential social ideas of the first half of the century. A proper distribution of emphasis as between the role of ideas and the role of action might attribute more influence on modern economic history to Keynes than to Roosevelt. Certainly his final book, <strong>The General Theory of Employment, Interest and Money</strong>, shaped the course of events as only the books of three earlier economists – Smith’s <strong>Wealth of Nations</strong>, Ricardo’s <strong>Principles of Political Economy</strong> and Marx’s <strong>Capital</strong> – have done.</p>
<p class="fst">The development of mass unemployment during the Great Depression of the 30’s not only demanded state intervention to preserve capitalism, but demolished the classical theories of free competition that had presumably guided the actions of the American bourgeoisie until that time. Keynes’ system permitted acknowledgment of the existence of unemployment, predicted its development, and appeared to provide a solution to the problem. To quote Galbraith:</p>
<p class="quoteb">The major conclusion of Keynes’ argument – the one of greatest general importance and the one that is relevant here – is that depression and unemployment are in no sense abnormal. (Neither, although the point is made less explicitly, is inflation.) On the contrary, the economy can find its equilibrium at any level of performance. The chance that production in the United States will be at that level where all, or nearly all, willing workers can find jobs is no greater than the chance that four, six, eight or ten million workers will be unemployed. Alternatively the demand for goods may exceed what the economy can supply even when everyone is employed. Accordingly there can be, even under peacetime conditions, a persistent upward pressure on prices, <em>i.e.</em>, more or less serious inflation.</p>
<p class="fst">Full employment, which the classicists assumed, did not exist. It was so remote that Keynes relegated it to the status of a special and rare case in equilibrium analysis. More often than not, asserted Keynes, the economy would achieve an equilibrium below the level of full employment. This, of course, was heresy to the conventional “vulgar” economists who promptly denounced Keynes. It was, however, rather difficult to ignore the political potential of millions of unemployed. The state had to intervene to try to bolster demand by various pump-priming processes. In the course of providing theoretical justification for state intervention, Keynes had to demolish what was known as Say’s Law – an ancient shibboleth according to which each commodity produced automatically generated the purchasing power required to take that commodity off the market. Keynes discovered something that had been more accurately described by Marx and many others; namely, that a portion of the value of a finished commodity went to the owner of capital and that this value (or, more accurately surplus value in the form of profit, interest or rent) did not necessarily have to be invested in new production. The resultant increase in savings could and periodically did “result in a shortage of purchasing power for buying the volume of goods currently being produced. In that case the volume of goods would not continue to be produced. Production and prices would fall; unemployment would increase ... And this equilibrium with extensive unemployment might be quite stable.”</p>
<p>Once Keynes had established that depressions could and did exist, and that investment did not automatically provide the necessary offsets to savings, the remedy in the form of public spending was clear. As Galbraith puts it:</p>
<p class="quoteb">“Insufficient investment has become the shorthand Keynesian explanation of low production and high unemployment. The obvious remedy is more investment and, in principle, it is not important whether this be from private or public funds. But the expenditure of public funds is subject to central determination by government, as that of private funds is not, so the Keynesian remedy leads directly to public expenditure as a depression remedy.”</p>
<p class="fst">The Great Depression has been succeeded by the Permanent War Economy. In this development is rooted the ultimate crisis of liberalism. Neither war nor a war economy is conceivable without rigorous, large-scale state intervention in the economy. The Keynesian theories, as Galbraith is at pains to point out, lose their attractiveness. That is why, in many respects, Galbraith’s <strong>American Capitalism</strong> reads like the confessions of a liberal. The old theories have been demolished twice over by remorseless reality. A new theory is needed: one that will explain what is apparently transpiring and one which justifies the <em>status quo</em>. Galbraith is attempting to fill the void left by the decline of Keynesianism.</p>
<p>The first point in establishing the nature of the void is to show that the climate is, indeed, different. This is not difficult to do, of course, although Galbraith fails to draw the necessary conclusions. It is only in passing that he reveals any understanding of what has happened, when he states that: “The Great Depression of the Thirties never came to an end. It merely disappeared in the great mobilization of the Forties. For a whole generation it became the normal aspect of peacetime life in the United States – the thing to be both feared and expected.” What is this if not an unconscious reference to the Permanent War Economy?</p>
<p>Even though depressions (and Keynes) are <em>passé</em>,</p>
<p class="quoteb">The depression psychosis not only contributed deeply to the uncertainty and insecurity of Americans in the years following World War II, it also deeply influenced economic behavior ... nearly every major business enterprise in the United States has been operated in the last five years in the expectation that sooner or later there would be a major slump. In late 1946, some 15,000 leading business executives were asked by <strong>Fortune</strong> magazine if they expected an “extended major depression with large-scale unemployment in the next ten years.” Fifty-eight per cent of those replying (in confidence) said they did. Of the remainder, only twenty-eight per cent said no. Organized labor’s preoccupation with measures to maintain employment and the farmers’ preoccupation with support prices have both reflected the search for shelter from depression. During the last fifteen years, the American radical has ceased to talk about inequality or exploitation under capitalism or even its “inherent contradictions.” He has stressed, instead, the unreliability of its performance.</p>
<p class="fst">Keynes provided a theory of depressions and a remedy therefore. Depression, however, is no longer the real danger; in fact, depression – according to Galbraith – is virtually an impossibility.</p>
<p class="quoteb">Given peace, and also freedom from the <em>force majeure</em> of large expenditures for armed forces, considerable confidence could be placed in the Keynesian formula. We could expect it to work [states Galbraith] because we could look forward to the kind of economy in which it is capable of working. Unhappily the prospect is not so favorable. [The PWE dominates the scene.] Although Keynes provided a plausible solution to the problem of deflation and depression, the application of his formula to the economy is not symmetrical. It does not deal equally well with the problem of inflation ... And unfortunately, inflation, not depression, is the greatest present and well may be the most persistent future tendency of the American economy.</p>
<p class="fst">Fiscal policy (tax rate manipulation, etc.) and built-in stabilizers (social security, etc.) have done away with depressions and thereby with Keynes. This is a pity, according to Galbraith, as depressions can always be controlled, but then Keynes would still reign supreme and there would be no need for Galbraith to develop his fraudulent concept of countervailing power. Lest we be accused of doing an injustice to Galbraith on this important point, let us quote two more passages. First he states:</p>
<p class="quoteb">Speaking with all the caution that broad generalization requires [<em>sic!</em>], the experience of these years [post-World War II] suggests that <em>there are no problems on the side of depression or deflation with which the American economy and polity cannot</em>, if it must, <em>contend</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Then, in the next breath:</p>
<p class="quoteb">A reading of recent experience has suggested that the American economy is unlikely soon to find, on the side of depression and deflation, any problems with which it cannot contend and none which would require an extension of the scope of centralized decision beyond the impersonal guidance provided by the Keynesian formula. Moreover the same experience of the years between 1945 and 1950 would lead one to expect that it would be against deflation that, most probably, the Keynesian formula would have to be invoked. <em>There are some hitherto unsuspected virtues in deflation. We know it can be countered; it provides the context in which the internal regulators work best. Thus we have a formula which insures a favorable over-all performance of the economy; that formula involves no revolutionary or even very drastic change in the economy or the relation of government thereto; the outlook is for the moderate deflationary tendencies in which both the economy and the formula can be expected to function well.</em> (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Unfortunately, Galbraith finished his book after the Korean war had broken out. He was consequently forced to recognize that</p>
<p class="quoteb">military expenditures are increasing rapidly. There has also been a considerable modification of the depression psychosis ... Accordingly, <em>inflation must now be considered not a possibility but a probability</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">These rather lengthy quotations from Galbraith’s economic outlook have been necessary to provide the proper setting for analyzing the concept of countervailing power. First, however, it is necessary to explore what Galbraith means by the term, countervailing power.</p>
<p>Market power has been a central feature of capitalism and competition has been the regulator of markets. These pivotal characteristics of capitalism have been recognized by all economic theories. Classical and neo-classical bourgeois theorists, in fact, centered all attention on market price, its causes, fluctuations and its impact (through the benign regulatory force of competition) on economic equilibrium and growth. The supply-demand equation governed price, and competition among sellers or among buyers (each of whom exercised no effective control over total output or market price) produced the “right” price that assured efficient allocation of resources, full employment and the best possible society. Galbraith succinctly expresses the traditional theory as follows:</p>
<p class="quoteb">In all cases the incentive to socially desirable behavior was provided by the competitor. <em>It was to the same side of the market and thus to competition that economists came to look for the self-regulatory mechanism of the economy.</em> (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">But competition was noticeably weakening throughout the twentieth century. By the time of the Great Depression, the presence of monopoly as an important, if not crucial, characteristic of the economy was most difficult to ignore. Theories were being developed on “imperfect” and “monopolistic” competition. In any event, competitive theory as an interpreter of what was happening and as a guide to action was losing adherents with each passing day. This was the climate that nourished the growth of Keynesianism. But Galbraith, from the vantage point of the Permanent War Economy (although, without beginning to realize its implications), seeks a new explanation – one that not only explains what happened in the 1930’s and 1940’s, but one that justifies the <em>status quo</em> of the 1950’s.</p>
<p>The following extensive excerpt from Galbraith’s <strong>American Capitalism</strong> provides us with the author’s understanding of the background leading to, as well as his definition of, countervailing power:</p>
<p class="quoteb">They [economists] also came to look to competition exclusively and in formal theory still do. The notion that there might be another regulatory mechanism in the economy has been almost completely excluded from economic thought. Thus, <em>with the widespread disappearance of competition in its classical form and its replacement by the small group of firms if not in overt, at least in conventional or tacit collusion, it was easy to suppose that since competition had disappeared, all effective restraint on private power had disappeared</em>. Indeed this conclusion was all but inevitable if no search was made for other restraints and so complete was the preoccupation with competition that none was made.</p>
<p class="quote"><em>In fact, new restraints on private power did appear to replace competition. They were nurtured by the same process of concentration which impaired or destroyed competition. But they appeared not on the same side of the market but on the opposite side, not with competitors but with customers or suppliers. It will be convenient to have a name for this counterpart of competition and I shall call it countervailing power.</em> (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Before continuing with Galbraith’s exposition of the concept of countervailing power, it is worth digressing to examine the dictionary meaning of the term. Countervail, it seems, can be traced back through old French to Latin, from which it is derived literally as “to be strong against.” The idea of compensation or balance is clearly at the heart of the meaning of countervail and the dictionary defines it as “to act against with equal force or power”; or “to act with equivalent effect against anything.” Note the stress on “equal” or “equivalent” power, as this is precisely what Galbraith has in mind.</p>
<p class="quoteb">To begin with a broad and somewhat too dogmatically stated proposition, <em>private economic power is held in check by the countervailing power of those who are subject to it. The first begets the second. The long trend toward concentration of industrial enterprise in the hands of a relatively few firms has brought into existence not only strong sellers, as economists have supposed, but also strong buyers as they have failed to see. The two develop together, not in precise step but in such manner that there can be no doubt that the one is in response to the other.</em></p>
<p class="quote">The fact that a seller enjoys a measure of monopoly power, and is reaping a measure of monopoly return as a result, means that there is an inducement to those firms from whom he buys or those to whom he sells to develop the power with which they can defend themselves against exploitation. It means also that there is a reward to them, in the form of a share of the gains of their opponents’ market power, if they are able to do so. In this way <em>the existence of market power creates an incentive to the organisation of another position of power that neutralizes it</em>.</p>
<p class="quote">The contention I am here making is a formidable one. It comes to this: <em>Competition which</em>, at least since the time of Adam Smith, <em>has been viewed as the autonomous regulator of economic activity and as the only available regulatory mechanism apart from the state, has, in fact, been superseded</em>. Not entirely to be sure. There are still important markets where the power of the firm as (say) a seller is checked or circumscribed by those who provide a similar or a substitute product or service. This, in the broadest sense that can be meaningful, is the meaning of competition. The role of the buyer on the other side of such markets is essentially a passive one. It consists in looking for, perhaps asking for, and responding to the best bargain. The active restraint is provided by the competitor who offers, or threatens to offer, a better bargain. By contrast, <em>in the typical modern market of few sellers, the active restraint is provided not by competitors but from the other side of the market by strong buyers. Given the convention against price competition, it is the role of the competitor that becomes passive</em> ... competition was regarded as a <em>self-generating</em> [italics in original] regulatory force. The doubt whether this was in fact so after a market had been pre-empted by a few large sellers, after entry of new firms had become difficult and after existing firms had accepted a convention against price competition, was what destroyed the faith in competition as a regulatory mechanism. <em>Countervailing power is also a self-generating force and this is a matter of great importance ... the regulatory role of the strong buyer, in relation to the market power of the strong seller, is also self-generating.</em> As noted, <em>power on one side of a market creates both the need for, and prospect of reward to, the exercise of countervailing power from the other side</em>. In the market of small numbers, the self-generating power of competition is a chimera. <em>That of countervailing power, by contrast, is readily assimilated to the common sense of the situation and its existence</em>, once we have learned to look for it, <em>is readily subject to empirical verification</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The monopolist, according to Galbraith, is held in check (and presumably no great degree of state intervention is required) not by his competing monopolist but by his monopolistic countervailing buyer or supplier. Economic (and political) balance is no longer mainly achieved by parallel competition among a great many (small) sellers or buyers but by relatively few huge supplying and buying organizations confronting each other across the supply-demand equation. Moreover, this exercise of what Galbraith describes as countervailing power is really automatic, <em>i.e.</em>, self-generating.</p>
<p>According to Galbraith, the importance of countervailing power can be empirically demonstrated in virtually every phase of economic activity where prices are a factor. In fact, he cites the labor market, agriculture and large-scale retailing organizations as the three prime examples of countervailing power. The powerful trade union, the large farmers’ cooperatives and the big chain stores and mail order houses constitute his best illustrations of countervailing power. They have arisen in response to a monopolistic position on the other side of the economic bargaining table. Labor, farmers and consumers (?) need these organizations partly as a matter of self-defense and partly to share the ill- gotten monopolistic gains of their monopolistic antagonists.</p>
<p class="quoteb">The operation of countervailing power is to be seen with the greatest clarity [states Galbraith] in the labor market where it is also most fully developed. [He then cites the case of the steel industry, observing:] As late as the early Twenties, the steel industry worked a twelve-hour day and seventy-two-hour week with an incredible twenty-four-hour stint every fortnight when the shift changed.</p>
<p class="quote">No such power is exercised today and for the reason that its earlier exercise stimulated the counteraction that brought it to an end. <em>In the ultimate sense it was the power of the steel industry, not the organizing abilities of John L. Lewis and Philip Murray, that brought the United Steel Workers into being.</em> The economic power that the worker faced in the sale of his labor – the competition of many sellers dealing with few buyers – made it necessary that he organize for his own protection. There were rewards to the power of the steel companies in which, when he had successfully developed countervailing power, he could share.</p>
<p class="quote"><em>As a general though not invariable rule there are strong unions in the United States only where markets are served by strong corporations.</em> And it is not an accident that the large automobile, steel, electrical, rubber, farm-machinery and non-ferrous metal-mining and smelting companies all bargain with powerful CIO unions. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">It is true that capitalism has organized the industrial proletariat in large factories and the class struggle has therefore more readily lead to the development of powerful trade unions. These, however, are terms and forces of which Galbraith is totally ignorant.</p>
<p>He is straining to make the facts of life fit his so-called theory of countervailing power. Yet he must recognize that strong unions exist in areas where powerful oligopolies are conspicuous by their absence. He is thus constrained to state:</p>
<p class="quoteb"><em>I do not advance the theory of countervailing power as a monolithic explanation of trade-union organization; in the case of bituminous-coal mining and the clothing industry, for example, the unions have emerged as a supplement to the weak market position of the operators and manufacturers.</em> They have assumed price- and market-regulating functions that are the normal functions of management. Nevertheless, <em>as an explanation of the incidence of trade-union strength in the American economy, the theory of countervailing power clearly fits the broad contours of experience</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Strong unions arise in response to the need of workers to defend themselves from the monopolistic power of large corporations and to obtain a share of the gains of monopoly power for the workers. The function of countervailing power in such instances, it is clear, is a healthy one. It achieves the type of balance of which Galbraith approves. At the same time, in other industries where powerful monopolistic corporations do not exist, strong unions arise “to supplement the weak market position of the operators and manufacturers.” Since the countervailing power of strong unions, however, can only operate against the monopoly power of large corporations, the UMW and the ILGWU must perform the “market functions that normally belong to management”; <em>i.e.</em>, they must develop monopolistic powers. It is not precisely clear, however, how a union can share the monopoly power of corporations when such power is non-existent. If Galbraith would study the history of the American labor movement, he might find other reasons for the growth of powerful unions in competitive industries and would thus not try to force his theory of countervailing power to fit facts for which it is patently not designed. It goes without saying that the history of the class struggle provides all the explanations that are necessary for the specific character and strength of the American trade-union movement.</p>
<p>The longest effort to develop countervailing power, according to Galbraith, has been made by the farmer.</p>
<p class="quoteb">In both the markets in which he sells and those in which he buys, the individual farmer’s market power in the typical case is intrinsically nil. In each case he is one among hundreds of thousands. As an individual he can withdraw from the market entirely, and there will be no effect on price – his action will, indeed, have no consequence for anyone but himself and his dependents.</p>
<p class="quote">Those from whom the farmer buys and those to whom he sells do, characteristically, have market power. The handful of manufacturers of farm machinery, of accessible fertilizer manufacturers or mixers, of petroleum suppliers, of insurance companies all exercise measurable control over the prices at which they sell. The farmer’s market for his products – the meat-packing industry, the tobacco companies, the canneries, the fluid-milk distributors – is typically, although not universally, divided between a relatively small number of large companies.</p>
<p class="fst">Many of the political activities of the farmers, such as the Granger movement, represent attempts to combat the monopolistic buying and selling power to which farmers are opposed in their market activities. The power of the farm bloc in Congress – it is implicit in Galbraith’s analysis flows from these antecedents. “Farmers have turned from the reduction of opposing market power,” according to Galbraith, “to the building of their own.” Here is the explanation of the rise of farm cooperatives.</p>
<p class="quoteb">In seeking to develop countervailing power it was natural that farmers would at some stage seek to imitate the market organization and strategy of those with whom they did business. For purchase or sale as individuals, they would seek to substitute purchase and sale as a group. Livestock or milk producers would combine in the sale of their livestock or milk. The market power of large meat packers and milk distributors would be matched by the market power of a large selling organization of livestock producers and dairymen. Similarly, if purchases of fertilizer, feed and oil were pooled, the prices of these products, hitherto named by the seller to the individual farmer, would become subject to negotiation.</p>
<p class="quote">The necessary instrument of organization was also available to the farmer in the form of the cooperative. The membership of the cooperative could include any number of farmers and it could be democratically controlled. All in all, the cooperative seemed an ideal device for exercising countervailing power ...</p>
<p class="quote">As a device for getting economies of large-scale operations in the handling of farm products or for providing and capitalizing such facilities as elevators, grain terminals, warehouses and creameries, cooperatives have enjoyed a considerable success. For exercising market power they have fatal structural weaknesses ... It cannot control the production of its members and, in practice, it has less than absolute control over their decision to sell ... A strong bargaining position requires ability to wait – to hold some or all of the product. [The selling cooperative has thus had limited success and required the intervention of the Federal government starting in the Hoover Administration.]</p>
<p class="quote">The farmer’s purchasing cooperative is free from the organic weaknesses of the marketing or bargaining cooperative. In the marketing cooperative the noncooperator ... gets a premium for his non-conformance. In the buying cooperative he can be denied the patronage dividends which reflect the economies of effective buying and bargaining. In the purchase of feed, chemicals for fertilizers, petroleum products and other farm supplies and insurance these cooperatives have enjoyed major success.</p>
<p class="fst">Galbraith has provided a justification for state intervention in behalf of the farmer that takes the curse off this type of activity and makes it inevitable.</p>
<p class="quoteb">The fact that the modern [farm] legislation is now of two decades’ standing, that behind it is a long history of equivalent aspiration, that there is not a developed country in the world where its counterpart does not exist, that no political party would think of attacking it are all worth pondering by those who regard such legislation as abnormal.</p>
<p class="fst">Countervailing power is most effective, it would seem, in the case of large retailing organizations that can exercise unusually strong buying power. States Galbraith:</p>
<p class="quoteb">As a regulatory device one of its [countervailing power] most important manifestations is in the relation of the large retailer to the firms from which it buys.</p>
<p class="fst">Again, it is the monopolistic power of the large corporations supplying retailers that provided the need and opportunity for the growth of the A&P, Sears, Roebuck & Co., Woolworth’s, etc. Or, as Galbraith puts it,</p>
<p class="quoteb">in precise parallel with the labor market, we find the retailer with both a protective and profit incentive to develop countervailing power whenever his supplier is in possession of market power. The practical manifestation of this, over the last half-century, has been the spectacular rise of the food chains, the variety chains, the mail-order houses (now graduated into chain stores), the departmentstore chains, and the cooperative buying organizations of the surviving independent department and food stores.</p>
<p class="fst">It is clear that Galbraith looks with favor upon the countervailing activities of such large retailing organizations as A&P and Sears, for he feels that it was a mistake even to attempt prosecution of the A&P under the anti-trust statutes, and he clearly lauds Sears for being able to purchase automobile tires at prices from 29 to 40 per cent lower than the market. Consequently, Galbraith is opposed to the Robinson-Patman Act for it fails to distinguish between original power and countervailing power and discriminates against the effective exercise of countervailing power.</p>
<p class="quoteb">When the comprehensive representation of large retailers in the various fields of consumers’ goods distribution is considered, it is reasonable to conclude – the reader is warned [by Galbraith] that this is an important generalization – that <em>most positions of market power in the production of consumers’ goods are covered by positions of countervailing power</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The countervailing power of the large retailing organizations, willy nilly, benefits consumers and eliminates the need of consumers organizing large-scale buying cooperatives similar to those in Scandinavia and England. Here is one of the more significant aspects of Galbraith’s concept of countervailing power, and one of the more facile justifications of the <em>status quo.</em></p>
<p>States Galbraith:</p>
<p class="quoteb">The development of countervailing power requires a certain minimum opportunity and capacity for organization, corporate or otherwise. <em>If the large retail buying organizations had not developed the countervailing power which they have used, by proxy, on behalf of the individual consumer, consumers would have been faced with the need to organize the equivalent of the retailer’s power.</em> This would be a formidable task but it has been accomplished in Scandinavia and, in lesser measure, in England where the consumer’s cooperative, instead of the chain store, is the dominant instrument of countervailing power in consumers’ goods markets ... <em>The fact that there are no consumer cooperatives of any importance in the United States is to be explained, not by any inherent incapacity of the American for such organization, but because the chain stores pre-empted the gains of countervailing power first.</em> The counterpart of the Swedish Kooperative Forbundet or the British Cooperative Wholesale Societies has not appeared in the United States simply because it could not compete with the A&P and the other large food chains. The meaning of this ... is that the chain stores are approximately as efficient in the exercise of countervailing power as a cooperative would be.</p>
<p class="fst">Comment on the above would be largely superfluous, particularly since Galbraith recognizes that, “While countervailing power is of decisive importance in regulating the exercise of private economic power, it is not universally effective.” And he cites the case of the residential-building industry. What Galbraith has failed to comprehend, however, is that consumers are not a class but an economic category cutting across all classes. Consumers cannot easily organize unless, as in England and Scandinavia, there is a strong political party of labor able to sustain an economic organization of consumers who are mainly workers. Here, and not in some mysterious countervailing benefits of monopolistic retail chains, lies the basic explanation of why consumers’ cooperatives have not flourished in the United States.</p>
<p>Labor and farmers, however, represent distinct economic classes. The course of the class struggle – not a fraudulent concept of countervailing power – has led to the development of trade unions and farmers’ buying cooperatives. The dialectic of the class struggle also helps to explain why farmers have achieved considerable political power in the United States, whereas the working class, as yet, has failed to achieve political power commensurate with its economic power. Of course, the struggle between a large-scale retail organization, such as Sears, and an oligopolist manufacturer, like the Goodyear Tire & Rubber Company, is a form of the class struggle. Only in this case it represents a struggle between segments of the capitalist class and not between different classes. No profound social consequences are really possible in a struggle within the capitalist class, as frequently occurs when the struggle is between the capitalist class and the working class.</p>
<p>Parenthetically, it is interesting to note that, with few exceptions, American bourgeois economics in the last two generations has been devoid of value theory. The concentration on so-called price theory, as separate and distinct from value theory, led ultimately to the enthronement of Wesley Mitchell and his followers at the National Bureau of Economic Research in the so-called Statistical School. Description – in many cases, interesting and unique descriptions – replaced theory. What exists flows from what was, but why is another question. Galbraith, too, is hardly a theorist. It does not even occur to him to question what is involved in the determination of price besides the superficial supply-demand relationships and the bargaining that occurs in the market place. The “theory” of countervailing power is as much a theory of prices and economic behavior as tides, by themselves, are an explanation of weather formation.</p>
<p>Galbraith, however, does have a sense of reality. He is not only aware of the fact that Keynesianism no longer holds sway and that the theories of monopolistic competition possess many inadequacies, but he is constrained to develop some plausible explanation of existing economic conditions that both justifies the <em>status quo</em> and provides a suitable guide to public policy. Giants on either side of the supply-demand equation play the decisive role in price determination, according to the concept of countervailing power, rather than “competition” amongst monopolies operating on the same side of the market. He provides a rationale for both private control of the means of production and limited state intervention to preserve that control. “The present analysis,” he states, “also legitimatizes government support to countervailing power.”</p>
<p>While state intervention has already been sanctioned by Keynesian theory in the need to create demand in a period of depression, Galbraith’s concept of countervailing power justifies state intervention in a somewhat negative way. The thought is rather fully developed in the following paragraph:</p>
<p class="quoteb">No case for an <em>ideal</em> distribution and employment of resources – for maximized social efficiency – can be made when countervailing power rather than competition is accepted as the basic regulator of the economy. Countervailing power does operate in the right direction. When a powerful retail buyer forces down the prices of an industry which had previously been enjoying monopoly returns, the result is larger sales of the product, a larger and broadly speaking a more desirable use of labor, materials and plant in production. But no one can suppose that this happens with precision. Thus a theoretical case exists for government intervention in private decision. It becomes strong where it can be shown that countervailing power is not fully operative.</p>
<p class="fst">The major argument against state intervention, in fact, becomes the old chestnut concerning the alleged impracticality and bureaucratic nature of state planning transformed into a wondrous argument about the administrative advantages of decentralized authority. Thus,</p>
<p class="quoteb">Although little cited, even by conservatives, administrative considerations now provide capitalism with by far its strongest defense against detailed interference with private business decision. To put the matter bluntly, in a parliamentary democracy with a high standard of living there is no administratively acceptable alternative to the decision-making mechanism of capitalism. No method of comparable effectiveness is available to decentralize authority over final decisions.</p>
<p class="fst">Countervailing power on Galbraith’s own testimony, however, cannot work in a period of inflation and inflation is the basic characteristic of our times. After developing his theory, he states:</p>
<p class="quoteb">I come now to the major limitation on the operation of countervailing power – a matter of much importance in our time. Countervailing power is not exercised uniformly under all conditions of demand. <em>It does not function at all as a restraint on market power when there is inflationary pressure on markets</em> ... Countervailing power, as a restraint on market power, <em>only</em> (Galbraith’s emphasis) operates when there is a relative scarcity of demand. Only then is the buyer important to the seller and this is an obvious prerequisite for his bringing his power to bear on the market power of the seller. If buyers are plentiful, that is, if supply is small in relation to current demand, the seller is under no compulsion to surrender to the bargaining power of any customer. The countervailing power of the buyer, however great, disappears with an excess of demand. With it goes the regulatory or restraining role of countervailing power in general. Indeed, the best hope of the buyer, under conditions of excess demand, may be to form a coalition with the seller to bring about an agreed division of returns ...</p>
<p class="quote">When demand is limited, we have ... an essentially healthy manifestation of countervailing power. The union opposes its power as a seller of labor to that of management as a buyer: At stake is the division of the returns. An occasional strike is an indication that countervailing power is being employed in a sound context where the costs of any wage increase cannot readily be passed along to someone else. It should be an occasion for mild rejoicing in the conservative press. <em>The </em><em><strong>Daily Worker</strong></em><em>, eagerly contemplating the downfall of capitalism, should regret this manifestation of the continued health of the system.</em></p>
<p class="quote">Under conditions of strong demand, however, collective bargaining takes on a radically different form ... Thus when demand is sufficiently strong to press upon the capacity of industry generally to supply it, there is no real conflict of interest between union and employer. It is to their mutual advantage to effect a coalition and to pass the costs of their agreement along in higher prices. Other buyers along the line, who under other circumstances might have exercised their countervailing power against the price increases, are similarly inhibited. Thus <em>under inflationary pressure of demand, the whole structure of countervailing power in the economy dissolves</em>. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Inflation, of course, has certain beneficiaries: “In the inflation years of the Forties, farmers and recipients of business profits did gain greatly in real income. It is not possible for any reputable American to be overtly in favor of inflation; it is a symbol of evil, like adultery, against which a stand must be taken in public however much it is enjoyed in private.” Inflation eliminates the slack in the economy and makes countervailing power virtually inoperative.</p>
<p>Inflation, moreover, is a characteristic of the Permanent War Economy and makes controls inevitable. This will have a permanent impact on the nature of capitalism, and it is on this rather lugubrious note that Galbraith concludes his book:</p>
<p class="quoteb">Given war or preparation for war – coupled with the effect of these on the public’s expectations as to prices – there is every likelihood that the scope for decentralized decision will be substantially narrowed. It is inflation, not deflation or depression, that will cause capitalism to be modified by extensive centralized decision. The position of capitalism in face of this threat is exceedingly vulnerable. This is not a matter of theory but of experience ... A few months of inflation [in 1950] accomplished what ten years of depression had not required.</p>
<p class="fst">The concept of countervailing power, consequently, is counterfeit on two grounds. Firstly, and mainly, it takes what are simple phenomena of the class struggle and erects them into a fraudulent theory that is supposed to explain and justify the <em>status quo</em>. Secondly, it admittedly cannot operate in a period of inflation, which means that its functions are necessarily extremely limited, being restricted to ever-narrowing periods of deflation (at least, according to Galbraith). Countervailing power exists, yes, in so far as it is a manifestation of the class struggle; but that is the only extent to which the concept is valid. The rest is a triumph of public relations and a fraud, although an interesting one, upon an unsuspecting intelligentsia.</p>
<p>The struggle across opposite sides of the marketplace is only one – and a minor phase at that – of the forms of the modern class struggle. As already mentioned, it is essentially a conflict within the capitalist class and, therefore, normally less intense and historically less significant than the class struggle in the factories between capital and labor. Preoccupation with mitigating all forms of the class struggle has become one of the hallmarks of American twentieth century liberalism; and, as a rule, no distinction is made among various types of class struggles. The important thing in the modern liberal lexicon is to have social peace – usually at any price.</p>
<p>Galbraith is no exception to this characteristic liberal approach. If he did not make his position entirely clear to everyone in <strong>American Capitalism</strong>, he is unambiguous in a paper on <em>Countervailing Power</em>, delivered before the December 1953 annual meeting of the American Economic Association. He states:</p>
<p class="quoteb">I fear I did not make as explicit as I should the welfare criteria I was employing. In partial equilibrium situations, economics has long made the maximization of consumer welfare a nearly absolute goal. Any type of economic behavior which lowered the prices of products to the consumer, quality of course being given, is good ...</p>
<p class="quote">In our own time, ... we regularly reject the particular equilibrium test of maximized consumer well-being. We regularly accept measures which raise product prices to ameliorate the grievances or alleviate the tensions of some social group. And it is well that we do. An opulent society can afford to sacrifice material well-being for social contentment. Higher prices of coal or clothing we regard as a small price for freedom from disorder in the coal fields or destitution in the sweatshops.</p>
<p class="quote"><em>I doubt whether, in entering a defense of the social utility of countervailing power, I made sufficiently clear whether my standard was the welfare of the consumer or the minimization of social tension.</em> It was natural that perceptive critics would take up the attack on the test of consumer welfare. Had I been less under the influence of this norm myself I would have invited the battle <em>in the area of social harmonies. This</em>, I submit, <em>is also the critical test.</em> American society has not recently been threatened in peacetime (or even in wartime) by a shortage of food. There have been times when the tensions of the farming community were a threat to orderly democratic process. The evolution of countervailing power in the labor market has similarly been a major solvent of tensions in the last half-century. Most would now agree, I think, that this has been worth a considerable price. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The concept of countervailing power – objectively in the view of its creator – has the dual purpose of softening the class struggle (reducing social tensions) and of creating the proper socio-economic climate for progressive economic development (dissipating the psychosis of depression and justifying state monopoly capitalism). In the course of developing his essay in social criticism, Galbraith, as we have pointed out, has had to do violence to many basic social phenomena, such as the nature of and reasons for the growth of the trade-union movement. He has also felt constrained to exhibit his ignorance of Marxism. He obviously believes he is making a telling point when he states: <em>“In the Marxian lexicon, capitalism and competition are mutually exclusive concepts; the Marxian attack has not been on capitalism but on monopoly capitalism.”</em> How one person can be so wrong in such a brief sentence is difficult to comprehend. Suffice it to say, that Marx always held competition to be a basic characteristic of capitalism, and the Marxian analysis of state monopoly capitalism constitutes a fundamental attack on capitalism as a social system that has outlived its historical usefulness.</p>
<p>In the same paper before the American Economic Association, Galbraith is forced to admit that one of his major points – the reduction of consumer prices by large retail chain operations – is not really due to countervailing power, but to competition. He states:</p>
<p class="quoteb">The gains from opposing mass retail buying to large-scale or oligopolistic production have, I think, been fairly generally conceded. The question has been asked, however, as to what eleemosynary instinct causes the gains that are won by the mass buyer to be passed along to the consumer. In my book I argued that it was the result of the shape of the production function in retailing. <em>My critics have suggested that it is because retailing, the mass buyers notwithstanding, is still a competitive industry.</em> (It is likely to remain one, for entry is almost inherently easy.) <em>I suspect they are right.</em> I am sure that I was more than a little reluctant, at this particular stage in my argument, to confess a reliance on competition. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">The self-generating character of countervailing power and its beneficent effects become just a series of unproved statements on the part of Galbraith – so much so, that the self-generating character of countervailing power may be labeled a self-generating fraud. This is pretty much the view of Galbraith’s professional critics. States Professor George J. Stigler (in a paper entitled, <em>The Economist Plays With Blocs</em>, delivered at the same session of the American Economic Association):</p>
<p class="quoteb">We must regret that at the very threshold of the doctrine of countervailing power, Galbraith eschews rational explanation. It is not as if one were asking, in the tones of a stuffy formalist, for explicit development of details of a theory whose general outline is familiar or which is a plausible extension of well-explored theories. The theory of bilateral oligopoly can hardly be said to exist, and the theory of bilateral monopoly – which Galbraith disposes of in a singularly high-handed manner – offers only contradictions to his theory ... Galbraith’s notion of countervailing power is a dogma, not a theory. It lacks a rational development and must be accepted or rejected without reference to its unstated logical antecedents ... Nor is there any explanation, in Galbraith’s book or elsewhere, why bilateral oligopoly should in general eliminate, and not merely redistribute, monopoly gains.</p>
<p class="fst">Stigler concludes his critique of Galbraith by stating:</p>
<p class="quoteb">I want to close with an apology for the consistently negative attitude I have felt compelled to take with respect to Galbraith’s theory. One would like to speak well of so urbane and witty a presentation. Especially at this season one would like to avoid expressing doubts that a mysterious, benevolent being will crawl down each and every chimney and leave a large income as well as directions to the nearest cut-rate outlet. Yet even at this season, Galbraith cannot persuade us that we should turn our economic problems over to Santa.</p>
<p class="fst">Another academic critic, John Perry Miller, in a paper at the same meeting, entitled <em>Competition and Countervailing Power: Their Rôles in the American Economy</em>, summarizes Galbraith’s theoretical approach by stating:</p>
<p class="quoteb">Here indeed is an optimistic doctrine of the dialectic suggesting that it is the search for power and countervailing power rather than self-interest in the search for gain which promotes economic progress. [Miller does not have much faith in countervailing power and expresses his basic attitude by declaring:] The further one burrows into the concept of countervailing power the clearer it becomes that a catchy phrase is being used to cover a variety of situations. It is doubtful whether so used it is a very useful tool of analysis. I doubt, also, that it is good history. And as an instrument of policy it is at best one in a crowded kit of tools along with the traditional tools of the policy of competition.</p>
<p class="fst">Nor were the discussants of the main papers at this session on <em>Countervailing Power</em> any kinder toward Galbraith than the official critics. David McCord Wright concludes his discussion with this trenchant blow: “I should judge Dr. Galbraith one of the most effective enemies of both capitalism and democracy.”</p>
<p>While Galbraith is to be commended for writing in non-technical language, and for attempting to relate economic theory to social reality (<em>i.e.</em>, for returning to the precepts of political economy), his humor smacks of smart-aleckism and is misplaced in a serious work. The popularity that Galbraith’s book has achieved, however, is not due to its style. And it is only partly due to excellent public relations in its promotion. Countervailing power appeals to a certain segment of intellectuals who are groping for doctrines that will reassure them that their world is not crumbling. This the theory of countervailing power attempts to do. Amidst the general bankruptcy of American bourgeois political economy, Galbraith is refreshing in his candor and style, but destined to a short life as the theorist of the day, for the simple reason that his theory is a fraud and will not even be accepted by the liberal bourgeoisie for whose benefit it was concocted.</p>
<h4>* * *</h4>
<h3>Footnote</h3>
<p class="note"><a href="#f1" name="n1">1.</a> Published by Houghton Mifflin Co., Boston 1952, 217 pp.</p>
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T.N. Vance
The Counterfeit Concept of
Countervailing Power
(May 1954)
From The New International, Vol. XX No. 3, May–June 1954, pp. 99–113.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The key to the psychology of mid-twentieth century capitalism is the fear of depression. This fear, or sense of insecurity, has been a basic fact of political and social life since the crisis of 1929. Any economist who has any claim whatsoever to being a theorist has been forced to attempt an explanation of the reasons for depressions and, above all, to reassure himself and society at large that there is no need to fear a recurrence of severe depression.
John Kenneth Galbraith – currently Professor of Economics at Harvard University and author of American Capitalism: The Concept of Countervailing Power [1] – is no exception. As a matter of fact, he begins by stating:
The present organization and management of the American economy are also in defiance of the rules – rules that derive their ultimate authority from men of such Newtonian stature as Bentham, Ricardo and Adam Smith. Nevertheless it works, and in the years since World War II quite brilliantly. The fact that it does so, in disregard of precept, has caused men to suppose that all must end in a terrible smash ... It is with this insecurity, in face of success, that this book, in the most general sense, is concerned. (Italics mine – T.N.V.)
The reason, consequently, that Galbraith’s concept of countervailing power has created somewhat of a stir in certain academic and liberal circles is that he has written a book aimed at reassuring the bourgeoisie and its supporters that there is really nothing much to worry about, that capitalism is functioning on the whole quite well, and that this is almost if not quite the best possible of all possible worlds. The difficulty, according to Galbraith, is that all classes in society have been victims of false or outmoded economic theories. All that is necessary is to change the theory, accept the validity of countervailing power, and presto chango the fear of depression will disappear.
While this represents a rather touching tribute to the power of ideas in molding men’s lives, it constitutes a real distortion of how ideas develop and how they influence the evolution of society. The entire presuppositions of Galbraith’s theory are laid bare by the following extensive quotation from the end of his first chapter:
Here then is the remarkable problem of our time. We find ourselves in these strange days with an economy which, on grounds of sheer physical performance, few are inclined to criticize. Even allowing for the conformist tradition in American social thought, the agreement on the quality of the performance of American capitalism is remarkable. The absence of any plausibly enunciated alternative to the present system is equally remarkable. Yet almost no one feels secure in the present. The conservative sees an omnipotent government busy altering capitalism to some new, unspecified but wholly unpalatable design. Even allowing for the exaggeration which is the common denominator of our political comment and of conservative fears in particular, he apparently feels the danger to be real and imminent. At any given time we are but one session of Congress or one bill removed from a cold revolution. The liberal contemplates with alarm the great corporations which cannot be accommodated to his faith. And, with the conservative, he shares the belief that, whatever the quality of current performance, it is certain not to last. Yet in the present we survive. With the present, given peace, no one is intolerably unhappy.
It can only be that there is something wrong with the current or accepted interpretation of American capitalism. This, indeed, is the case. Conservatives and liberals, both, are the captives of ideas which cause them to view the world with misgivings or alarm. Neither the structure of the economy nor the role of government conforms to the pattern specified, even demanded, by the ideas they hold. The American government and the American economy are both behaving in brazen defiance of their rules. If their rules were binding, they would already be suffering. The conservative, who has already had two decades of New and Fair Deals would already be dispossessed. The liberal, who has already lived his entire life in an economy of vast corporations, would already be their puppet. Little would be produced; we should all be suffering under the exploitation and struggling to pay for the inefficiency of monopoly. The fact that we have escaped so far means that the trouble lies not with the world but with the ideas by which it is interpreted. It is the ideas which are the source of the insecurity – the insecurity of illusion.
Whether the average individual is as worried as Galbraith thinks he is about the possibility or imminence of depression, is difficult to ascertain. Galbraith’s worry, however, is genuine. It stems from the destruction of the economic foundations of American liberalism. Capitalist liberalism historically was a nineteenth century phenomenon. With the growth of state monopoly capitalism and of monopoly in general the base of liberalism narrowed until it has reached the point where it has virtually disappeared and genuine liberals are as scarce as hen’s teeth. Sooner or later economic theory must correspond to the facts of economic life. In other words, the superstructure, i.e., the world of ideas, flows from the foundation, i.e., the reality.
Liberalism is the child of competitive capitalism, of free enterprise in the true sense of the term. As competition decreased and monopoly grew, it became increasingly difficult for liberals to maintain a theory of liberalism.
Such a theory was badly in need once capitalism entered the stage of permanent crisis following the first world war – and once the authoritarian theories of fascism and Stalinism became fashionable. In the 1930’s the man who saved the day for the liberals was John Maynard Keynes – an English banker who became the bourgeois theorist of the depression era. For it was Keynes who provided the rationale, the justification for state intervention which was absolutely indispensable for the survival of capitalism. In the process, Keynes demolished his predecessors, the classicists and neo- classicists alike.
In an interesting chapter, entitled The Depression Psychosis, Galbraith displays a rather penetrating understanding of Keynes’ rôle. He states:
The ideas which interpreted the depression, and which warned that depression or inflation might be as much a part of the free-enterprise destiny as stable full employment, were those of John Maynard Keynes. A case could easily be made by those who make such cases, that his were the most influential social ideas of the first half of the century. A proper distribution of emphasis as between the role of ideas and the role of action might attribute more influence on modern economic history to Keynes than to Roosevelt. Certainly his final book, The General Theory of Employment, Interest and Money, shaped the course of events as only the books of three earlier economists – Smith’s Wealth of Nations, Ricardo’s Principles of Political Economy and Marx’s Capital – have done.
The development of mass unemployment during the Great Depression of the 30’s not only demanded state intervention to preserve capitalism, but demolished the classical theories of free competition that had presumably guided the actions of the American bourgeoisie until that time. Keynes’ system permitted acknowledgment of the existence of unemployment, predicted its development, and appeared to provide a solution to the problem. To quote Galbraith:
The major conclusion of Keynes’ argument – the one of greatest general importance and the one that is relevant here – is that depression and unemployment are in no sense abnormal. (Neither, although the point is made less explicitly, is inflation.) On the contrary, the economy can find its equilibrium at any level of performance. The chance that production in the United States will be at that level where all, or nearly all, willing workers can find jobs is no greater than the chance that four, six, eight or ten million workers will be unemployed. Alternatively the demand for goods may exceed what the economy can supply even when everyone is employed. Accordingly there can be, even under peacetime conditions, a persistent upward pressure on prices, i.e., more or less serious inflation.
Full employment, which the classicists assumed, did not exist. It was so remote that Keynes relegated it to the status of a special and rare case in equilibrium analysis. More often than not, asserted Keynes, the economy would achieve an equilibrium below the level of full employment. This, of course, was heresy to the conventional “vulgar” economists who promptly denounced Keynes. It was, however, rather difficult to ignore the political potential of millions of unemployed. The state had to intervene to try to bolster demand by various pump-priming processes. In the course of providing theoretical justification for state intervention, Keynes had to demolish what was known as Say’s Law – an ancient shibboleth according to which each commodity produced automatically generated the purchasing power required to take that commodity off the market. Keynes discovered something that had been more accurately described by Marx and many others; namely, that a portion of the value of a finished commodity went to the owner of capital and that this value (or, more accurately surplus value in the form of profit, interest or rent) did not necessarily have to be invested in new production. The resultant increase in savings could and periodically did “result in a shortage of purchasing power for buying the volume of goods currently being produced. In that case the volume of goods would not continue to be produced. Production and prices would fall; unemployment would increase ... And this equilibrium with extensive unemployment might be quite stable.”
Once Keynes had established that depressions could and did exist, and that investment did not automatically provide the necessary offsets to savings, the remedy in the form of public spending was clear. As Galbraith puts it:
“Insufficient investment has become the shorthand Keynesian explanation of low production and high unemployment. The obvious remedy is more investment and, in principle, it is not important whether this be from private or public funds. But the expenditure of public funds is subject to central determination by government, as that of private funds is not, so the Keynesian remedy leads directly to public expenditure as a depression remedy.”
The Great Depression has been succeeded by the Permanent War Economy. In this development is rooted the ultimate crisis of liberalism. Neither war nor a war economy is conceivable without rigorous, large-scale state intervention in the economy. The Keynesian theories, as Galbraith is at pains to point out, lose their attractiveness. That is why, in many respects, Galbraith’s American Capitalism reads like the confessions of a liberal. The old theories have been demolished twice over by remorseless reality. A new theory is needed: one that will explain what is apparently transpiring and one which justifies the status quo. Galbraith is attempting to fill the void left by the decline of Keynesianism.
The first point in establishing the nature of the void is to show that the climate is, indeed, different. This is not difficult to do, of course, although Galbraith fails to draw the necessary conclusions. It is only in passing that he reveals any understanding of what has happened, when he states that: “The Great Depression of the Thirties never came to an end. It merely disappeared in the great mobilization of the Forties. For a whole generation it became the normal aspect of peacetime life in the United States – the thing to be both feared and expected.” What is this if not an unconscious reference to the Permanent War Economy?
Even though depressions (and Keynes) are passé,
The depression psychosis not only contributed deeply to the uncertainty and insecurity of Americans in the years following World War II, it also deeply influenced economic behavior ... nearly every major business enterprise in the United States has been operated in the last five years in the expectation that sooner or later there would be a major slump. In late 1946, some 15,000 leading business executives were asked by Fortune magazine if they expected an “extended major depression with large-scale unemployment in the next ten years.” Fifty-eight per cent of those replying (in confidence) said they did. Of the remainder, only twenty-eight per cent said no. Organized labor’s preoccupation with measures to maintain employment and the farmers’ preoccupation with support prices have both reflected the search for shelter from depression. During the last fifteen years, the American radical has ceased to talk about inequality or exploitation under capitalism or even its “inherent contradictions.” He has stressed, instead, the unreliability of its performance.
Keynes provided a theory of depressions and a remedy therefore. Depression, however, is no longer the real danger; in fact, depression – according to Galbraith – is virtually an impossibility.
Given peace, and also freedom from the force majeure of large expenditures for armed forces, considerable confidence could be placed in the Keynesian formula. We could expect it to work [states Galbraith] because we could look forward to the kind of economy in which it is capable of working. Unhappily the prospect is not so favorable. [The PWE dominates the scene.] Although Keynes provided a plausible solution to the problem of deflation and depression, the application of his formula to the economy is not symmetrical. It does not deal equally well with the problem of inflation ... And unfortunately, inflation, not depression, is the greatest present and well may be the most persistent future tendency of the American economy.
Fiscal policy (tax rate manipulation, etc.) and built-in stabilizers (social security, etc.) have done away with depressions and thereby with Keynes. This is a pity, according to Galbraith, as depressions can always be controlled, but then Keynes would still reign supreme and there would be no need for Galbraith to develop his fraudulent concept of countervailing power. Lest we be accused of doing an injustice to Galbraith on this important point, let us quote two more passages. First he states:
Speaking with all the caution that broad generalization requires [sic!], the experience of these years [post-World War II] suggests that there are no problems on the side of depression or deflation with which the American economy and polity cannot, if it must, contend. (Italics mine – T.N.V.)
Then, in the next breath:
A reading of recent experience has suggested that the American economy is unlikely soon to find, on the side of depression and deflation, any problems with which it cannot contend and none which would require an extension of the scope of centralized decision beyond the impersonal guidance provided by the Keynesian formula. Moreover the same experience of the years between 1945 and 1950 would lead one to expect that it would be against deflation that, most probably, the Keynesian formula would have to be invoked. There are some hitherto unsuspected virtues in deflation. We know it can be countered; it provides the context in which the internal regulators work best. Thus we have a formula which insures a favorable over-all performance of the economy; that formula involves no revolutionary or even very drastic change in the economy or the relation of government thereto; the outlook is for the moderate deflationary tendencies in which both the economy and the formula can be expected to function well. (Italics mine – T.N.V.)
Unfortunately, Galbraith finished his book after the Korean war had broken out. He was consequently forced to recognize that
military expenditures are increasing rapidly. There has also been a considerable modification of the depression psychosis ... Accordingly, inflation must now be considered not a possibility but a probability. (Italics mine – T.N.V.)
These rather lengthy quotations from Galbraith’s economic outlook have been necessary to provide the proper setting for analyzing the concept of countervailing power. First, however, it is necessary to explore what Galbraith means by the term, countervailing power.
Market power has been a central feature of capitalism and competition has been the regulator of markets. These pivotal characteristics of capitalism have been recognized by all economic theories. Classical and neo-classical bourgeois theorists, in fact, centered all attention on market price, its causes, fluctuations and its impact (through the benign regulatory force of competition) on economic equilibrium and growth. The supply-demand equation governed price, and competition among sellers or among buyers (each of whom exercised no effective control over total output or market price) produced the “right” price that assured efficient allocation of resources, full employment and the best possible society. Galbraith succinctly expresses the traditional theory as follows:
In all cases the incentive to socially desirable behavior was provided by the competitor. It was to the same side of the market and thus to competition that economists came to look for the self-regulatory mechanism of the economy. (Italics mine – T.N.V.)
But competition was noticeably weakening throughout the twentieth century. By the time of the Great Depression, the presence of monopoly as an important, if not crucial, characteristic of the economy was most difficult to ignore. Theories were being developed on “imperfect” and “monopolistic” competition. In any event, competitive theory as an interpreter of what was happening and as a guide to action was losing adherents with each passing day. This was the climate that nourished the growth of Keynesianism. But Galbraith, from the vantage point of the Permanent War Economy (although, without beginning to realize its implications), seeks a new explanation – one that not only explains what happened in the 1930’s and 1940’s, but one that justifies the status quo of the 1950’s.
The following extensive excerpt from Galbraith’s American Capitalism provides us with the author’s understanding of the background leading to, as well as his definition of, countervailing power:
They [economists] also came to look to competition exclusively and in formal theory still do. The notion that there might be another regulatory mechanism in the economy has been almost completely excluded from economic thought. Thus, with the widespread disappearance of competition in its classical form and its replacement by the small group of firms if not in overt, at least in conventional or tacit collusion, it was easy to suppose that since competition had disappeared, all effective restraint on private power had disappeared. Indeed this conclusion was all but inevitable if no search was made for other restraints and so complete was the preoccupation with competition that none was made.
In fact, new restraints on private power did appear to replace competition. They were nurtured by the same process of concentration which impaired or destroyed competition. But they appeared not on the same side of the market but on the opposite side, not with competitors but with customers or suppliers. It will be convenient to have a name for this counterpart of competition and I shall call it countervailing power. (Italics mine – T.N.V.)
Before continuing with Galbraith’s exposition of the concept of countervailing power, it is worth digressing to examine the dictionary meaning of the term. Countervail, it seems, can be traced back through old French to Latin, from which it is derived literally as “to be strong against.” The idea of compensation or balance is clearly at the heart of the meaning of countervail and the dictionary defines it as “to act against with equal force or power”; or “to act with equivalent effect against anything.” Note the stress on “equal” or “equivalent” power, as this is precisely what Galbraith has in mind.
To begin with a broad and somewhat too dogmatically stated proposition, private economic power is held in check by the countervailing power of those who are subject to it. The first begets the second. The long trend toward concentration of industrial enterprise in the hands of a relatively few firms has brought into existence not only strong sellers, as economists have supposed, but also strong buyers as they have failed to see. The two develop together, not in precise step but in such manner that there can be no doubt that the one is in response to the other.
The fact that a seller enjoys a measure of monopoly power, and is reaping a measure of monopoly return as a result, means that there is an inducement to those firms from whom he buys or those to whom he sells to develop the power with which they can defend themselves against exploitation. It means also that there is a reward to them, in the form of a share of the gains of their opponents’ market power, if they are able to do so. In this way the existence of market power creates an incentive to the organisation of another position of power that neutralizes it.
The contention I am here making is a formidable one. It comes to this: Competition which, at least since the time of Adam Smith, has been viewed as the autonomous regulator of economic activity and as the only available regulatory mechanism apart from the state, has, in fact, been superseded. Not entirely to be sure. There are still important markets where the power of the firm as (say) a seller is checked or circumscribed by those who provide a similar or a substitute product or service. This, in the broadest sense that can be meaningful, is the meaning of competition. The role of the buyer on the other side of such markets is essentially a passive one. It consists in looking for, perhaps asking for, and responding to the best bargain. The active restraint is provided by the competitor who offers, or threatens to offer, a better bargain. By contrast, in the typical modern market of few sellers, the active restraint is provided not by competitors but from the other side of the market by strong buyers. Given the convention against price competition, it is the role of the competitor that becomes passive ... competition was regarded as a self-generating [italics in original] regulatory force. The doubt whether this was in fact so after a market had been pre-empted by a few large sellers, after entry of new firms had become difficult and after existing firms had accepted a convention against price competition, was what destroyed the faith in competition as a regulatory mechanism. Countervailing power is also a self-generating force and this is a matter of great importance ... the regulatory role of the strong buyer, in relation to the market power of the strong seller, is also self-generating. As noted, power on one side of a market creates both the need for, and prospect of reward to, the exercise of countervailing power from the other side. In the market of small numbers, the self-generating power of competition is a chimera. That of countervailing power, by contrast, is readily assimilated to the common sense of the situation and its existence, once we have learned to look for it, is readily subject to empirical verification. (Italics mine – T.N.V.)
The monopolist, according to Galbraith, is held in check (and presumably no great degree of state intervention is required) not by his competing monopolist but by his monopolistic countervailing buyer or supplier. Economic (and political) balance is no longer mainly achieved by parallel competition among a great many (small) sellers or buyers but by relatively few huge supplying and buying organizations confronting each other across the supply-demand equation. Moreover, this exercise of what Galbraith describes as countervailing power is really automatic, i.e., self-generating.
According to Galbraith, the importance of countervailing power can be empirically demonstrated in virtually every phase of economic activity where prices are a factor. In fact, he cites the labor market, agriculture and large-scale retailing organizations as the three prime examples of countervailing power. The powerful trade union, the large farmers’ cooperatives and the big chain stores and mail order houses constitute his best illustrations of countervailing power. They have arisen in response to a monopolistic position on the other side of the economic bargaining table. Labor, farmers and consumers (?) need these organizations partly as a matter of self-defense and partly to share the ill- gotten monopolistic gains of their monopolistic antagonists.
The operation of countervailing power is to be seen with the greatest clarity [states Galbraith] in the labor market where it is also most fully developed. [He then cites the case of the steel industry, observing:] As late as the early Twenties, the steel industry worked a twelve-hour day and seventy-two-hour week with an incredible twenty-four-hour stint every fortnight when the shift changed.
No such power is exercised today and for the reason that its earlier exercise stimulated the counteraction that brought it to an end. In the ultimate sense it was the power of the steel industry, not the organizing abilities of John L. Lewis and Philip Murray, that brought the United Steel Workers into being. The economic power that the worker faced in the sale of his labor – the competition of many sellers dealing with few buyers – made it necessary that he organize for his own protection. There were rewards to the power of the steel companies in which, when he had successfully developed countervailing power, he could share.
As a general though not invariable rule there are strong unions in the United States only where markets are served by strong corporations. And it is not an accident that the large automobile, steel, electrical, rubber, farm-machinery and non-ferrous metal-mining and smelting companies all bargain with powerful CIO unions. (Italics mine – T.N.V.)
It is true that capitalism has organized the industrial proletariat in large factories and the class struggle has therefore more readily lead to the development of powerful trade unions. These, however, are terms and forces of which Galbraith is totally ignorant.
He is straining to make the facts of life fit his so-called theory of countervailing power. Yet he must recognize that strong unions exist in areas where powerful oligopolies are conspicuous by their absence. He is thus constrained to state:
I do not advance the theory of countervailing power as a monolithic explanation of trade-union organization; in the case of bituminous-coal mining and the clothing industry, for example, the unions have emerged as a supplement to the weak market position of the operators and manufacturers. They have assumed price- and market-regulating functions that are the normal functions of management. Nevertheless, as an explanation of the incidence of trade-union strength in the American economy, the theory of countervailing power clearly fits the broad contours of experience. (Italics mine – T.N.V.)
Strong unions arise in response to the need of workers to defend themselves from the monopolistic power of large corporations and to obtain a share of the gains of monopoly power for the workers. The function of countervailing power in such instances, it is clear, is a healthy one. It achieves the type of balance of which Galbraith approves. At the same time, in other industries where powerful monopolistic corporations do not exist, strong unions arise “to supplement the weak market position of the operators and manufacturers.” Since the countervailing power of strong unions, however, can only operate against the monopoly power of large corporations, the UMW and the ILGWU must perform the “market functions that normally belong to management”; i.e., they must develop monopolistic powers. It is not precisely clear, however, how a union can share the monopoly power of corporations when such power is non-existent. If Galbraith would study the history of the American labor movement, he might find other reasons for the growth of powerful unions in competitive industries and would thus not try to force his theory of countervailing power to fit facts for which it is patently not designed. It goes without saying that the history of the class struggle provides all the explanations that are necessary for the specific character and strength of the American trade-union movement.
The longest effort to develop countervailing power, according to Galbraith, has been made by the farmer.
In both the markets in which he sells and those in which he buys, the individual farmer’s market power in the typical case is intrinsically nil. In each case he is one among hundreds of thousands. As an individual he can withdraw from the market entirely, and there will be no effect on price – his action will, indeed, have no consequence for anyone but himself and his dependents.
Those from whom the farmer buys and those to whom he sells do, characteristically, have market power. The handful of manufacturers of farm machinery, of accessible fertilizer manufacturers or mixers, of petroleum suppliers, of insurance companies all exercise measurable control over the prices at which they sell. The farmer’s market for his products – the meat-packing industry, the tobacco companies, the canneries, the fluid-milk distributors – is typically, although not universally, divided between a relatively small number of large companies.
Many of the political activities of the farmers, such as the Granger movement, represent attempts to combat the monopolistic buying and selling power to which farmers are opposed in their market activities. The power of the farm bloc in Congress – it is implicit in Galbraith’s analysis flows from these antecedents. “Farmers have turned from the reduction of opposing market power,” according to Galbraith, “to the building of their own.” Here is the explanation of the rise of farm cooperatives.
In seeking to develop countervailing power it was natural that farmers would at some stage seek to imitate the market organization and strategy of those with whom they did business. For purchase or sale as individuals, they would seek to substitute purchase and sale as a group. Livestock or milk producers would combine in the sale of their livestock or milk. The market power of large meat packers and milk distributors would be matched by the market power of a large selling organization of livestock producers and dairymen. Similarly, if purchases of fertilizer, feed and oil were pooled, the prices of these products, hitherto named by the seller to the individual farmer, would become subject to negotiation.
The necessary instrument of organization was also available to the farmer in the form of the cooperative. The membership of the cooperative could include any number of farmers and it could be democratically controlled. All in all, the cooperative seemed an ideal device for exercising countervailing power ...
As a device for getting economies of large-scale operations in the handling of farm products or for providing and capitalizing such facilities as elevators, grain terminals, warehouses and creameries, cooperatives have enjoyed a considerable success. For exercising market power they have fatal structural weaknesses ... It cannot control the production of its members and, in practice, it has less than absolute control over their decision to sell ... A strong bargaining position requires ability to wait – to hold some or all of the product. [The selling cooperative has thus had limited success and required the intervention of the Federal government starting in the Hoover Administration.]
The farmer’s purchasing cooperative is free from the organic weaknesses of the marketing or bargaining cooperative. In the marketing cooperative the noncooperator ... gets a premium for his non-conformance. In the buying cooperative he can be denied the patronage dividends which reflect the economies of effective buying and bargaining. In the purchase of feed, chemicals for fertilizers, petroleum products and other farm supplies and insurance these cooperatives have enjoyed major success.
Galbraith has provided a justification for state intervention in behalf of the farmer that takes the curse off this type of activity and makes it inevitable.
The fact that the modern [farm] legislation is now of two decades’ standing, that behind it is a long history of equivalent aspiration, that there is not a developed country in the world where its counterpart does not exist, that no political party would think of attacking it are all worth pondering by those who regard such legislation as abnormal.
Countervailing power is most effective, it would seem, in the case of large retailing organizations that can exercise unusually strong buying power. States Galbraith:
As a regulatory device one of its [countervailing power] most important manifestations is in the relation of the large retailer to the firms from which it buys.
Again, it is the monopolistic power of the large corporations supplying retailers that provided the need and opportunity for the growth of the A&P, Sears, Roebuck & Co., Woolworth’s, etc. Or, as Galbraith puts it,
in precise parallel with the labor market, we find the retailer with both a protective and profit incentive to develop countervailing power whenever his supplier is in possession of market power. The practical manifestation of this, over the last half-century, has been the spectacular rise of the food chains, the variety chains, the mail-order houses (now graduated into chain stores), the departmentstore chains, and the cooperative buying organizations of the surviving independent department and food stores.
It is clear that Galbraith looks with favor upon the countervailing activities of such large retailing organizations as A&P and Sears, for he feels that it was a mistake even to attempt prosecution of the A&P under the anti-trust statutes, and he clearly lauds Sears for being able to purchase automobile tires at prices from 29 to 40 per cent lower than the market. Consequently, Galbraith is opposed to the Robinson-Patman Act for it fails to distinguish between original power and countervailing power and discriminates against the effective exercise of countervailing power.
When the comprehensive representation of large retailers in the various fields of consumers’ goods distribution is considered, it is reasonable to conclude – the reader is warned [by Galbraith] that this is an important generalization – that most positions of market power in the production of consumers’ goods are covered by positions of countervailing power. (Italics mine – T.N.V.)
The countervailing power of the large retailing organizations, willy nilly, benefits consumers and eliminates the need of consumers organizing large-scale buying cooperatives similar to those in Scandinavia and England. Here is one of the more significant aspects of Galbraith’s concept of countervailing power, and one of the more facile justifications of the status quo.
States Galbraith:
The development of countervailing power requires a certain minimum opportunity and capacity for organization, corporate or otherwise. If the large retail buying organizations had not developed the countervailing power which they have used, by proxy, on behalf of the individual consumer, consumers would have been faced with the need to organize the equivalent of the retailer’s power. This would be a formidable task but it has been accomplished in Scandinavia and, in lesser measure, in England where the consumer’s cooperative, instead of the chain store, is the dominant instrument of countervailing power in consumers’ goods markets ... The fact that there are no consumer cooperatives of any importance in the United States is to be explained, not by any inherent incapacity of the American for such organization, but because the chain stores pre-empted the gains of countervailing power first. The counterpart of the Swedish Kooperative Forbundet or the British Cooperative Wholesale Societies has not appeared in the United States simply because it could not compete with the A&P and the other large food chains. The meaning of this ... is that the chain stores are approximately as efficient in the exercise of countervailing power as a cooperative would be.
Comment on the above would be largely superfluous, particularly since Galbraith recognizes that, “While countervailing power is of decisive importance in regulating the exercise of private economic power, it is not universally effective.” And he cites the case of the residential-building industry. What Galbraith has failed to comprehend, however, is that consumers are not a class but an economic category cutting across all classes. Consumers cannot easily organize unless, as in England and Scandinavia, there is a strong political party of labor able to sustain an economic organization of consumers who are mainly workers. Here, and not in some mysterious countervailing benefits of monopolistic retail chains, lies the basic explanation of why consumers’ cooperatives have not flourished in the United States.
Labor and farmers, however, represent distinct economic classes. The course of the class struggle – not a fraudulent concept of countervailing power – has led to the development of trade unions and farmers’ buying cooperatives. The dialectic of the class struggle also helps to explain why farmers have achieved considerable political power in the United States, whereas the working class, as yet, has failed to achieve political power commensurate with its economic power. Of course, the struggle between a large-scale retail organization, such as Sears, and an oligopolist manufacturer, like the Goodyear Tire & Rubber Company, is a form of the class struggle. Only in this case it represents a struggle between segments of the capitalist class and not between different classes. No profound social consequences are really possible in a struggle within the capitalist class, as frequently occurs when the struggle is between the capitalist class and the working class.
Parenthetically, it is interesting to note that, with few exceptions, American bourgeois economics in the last two generations has been devoid of value theory. The concentration on so-called price theory, as separate and distinct from value theory, led ultimately to the enthronement of Wesley Mitchell and his followers at the National Bureau of Economic Research in the so-called Statistical School. Description – in many cases, interesting and unique descriptions – replaced theory. What exists flows from what was, but why is another question. Galbraith, too, is hardly a theorist. It does not even occur to him to question what is involved in the determination of price besides the superficial supply-demand relationships and the bargaining that occurs in the market place. The “theory” of countervailing power is as much a theory of prices and economic behavior as tides, by themselves, are an explanation of weather formation.
Galbraith, however, does have a sense of reality. He is not only aware of the fact that Keynesianism no longer holds sway and that the theories of monopolistic competition possess many inadequacies, but he is constrained to develop some plausible explanation of existing economic conditions that both justifies the status quo and provides a suitable guide to public policy. Giants on either side of the supply-demand equation play the decisive role in price determination, according to the concept of countervailing power, rather than “competition” amongst monopolies operating on the same side of the market. He provides a rationale for both private control of the means of production and limited state intervention to preserve that control. “The present analysis,” he states, “also legitimatizes government support to countervailing power.”
While state intervention has already been sanctioned by Keynesian theory in the need to create demand in a period of depression, Galbraith’s concept of countervailing power justifies state intervention in a somewhat negative way. The thought is rather fully developed in the following paragraph:
No case for an ideal distribution and employment of resources – for maximized social efficiency – can be made when countervailing power rather than competition is accepted as the basic regulator of the economy. Countervailing power does operate in the right direction. When a powerful retail buyer forces down the prices of an industry which had previously been enjoying monopoly returns, the result is larger sales of the product, a larger and broadly speaking a more desirable use of labor, materials and plant in production. But no one can suppose that this happens with precision. Thus a theoretical case exists for government intervention in private decision. It becomes strong where it can be shown that countervailing power is not fully operative.
The major argument against state intervention, in fact, becomes the old chestnut concerning the alleged impracticality and bureaucratic nature of state planning transformed into a wondrous argument about the administrative advantages of decentralized authority. Thus,
Although little cited, even by conservatives, administrative considerations now provide capitalism with by far its strongest defense against detailed interference with private business decision. To put the matter bluntly, in a parliamentary democracy with a high standard of living there is no administratively acceptable alternative to the decision-making mechanism of capitalism. No method of comparable effectiveness is available to decentralize authority over final decisions.
Countervailing power on Galbraith’s own testimony, however, cannot work in a period of inflation and inflation is the basic characteristic of our times. After developing his theory, he states:
I come now to the major limitation on the operation of countervailing power – a matter of much importance in our time. Countervailing power is not exercised uniformly under all conditions of demand. It does not function at all as a restraint on market power when there is inflationary pressure on markets ... Countervailing power, as a restraint on market power, only (Galbraith’s emphasis) operates when there is a relative scarcity of demand. Only then is the buyer important to the seller and this is an obvious prerequisite for his bringing his power to bear on the market power of the seller. If buyers are plentiful, that is, if supply is small in relation to current demand, the seller is under no compulsion to surrender to the bargaining power of any customer. The countervailing power of the buyer, however great, disappears with an excess of demand. With it goes the regulatory or restraining role of countervailing power in general. Indeed, the best hope of the buyer, under conditions of excess demand, may be to form a coalition with the seller to bring about an agreed division of returns ...
When demand is limited, we have ... an essentially healthy manifestation of countervailing power. The union opposes its power as a seller of labor to that of management as a buyer: At stake is the division of the returns. An occasional strike is an indication that countervailing power is being employed in a sound context where the costs of any wage increase cannot readily be passed along to someone else. It should be an occasion for mild rejoicing in the conservative press. The Daily Worker, eagerly contemplating the downfall of capitalism, should regret this manifestation of the continued health of the system.
Under conditions of strong demand, however, collective bargaining takes on a radically different form ... Thus when demand is sufficiently strong to press upon the capacity of industry generally to supply it, there is no real conflict of interest between union and employer. It is to their mutual advantage to effect a coalition and to pass the costs of their agreement along in higher prices. Other buyers along the line, who under other circumstances might have exercised their countervailing power against the price increases, are similarly inhibited. Thus under inflationary pressure of demand, the whole structure of countervailing power in the economy dissolves. (Italics mine – T.N.V.)
Inflation, of course, has certain beneficiaries: “In the inflation years of the Forties, farmers and recipients of business profits did gain greatly in real income. It is not possible for any reputable American to be overtly in favor of inflation; it is a symbol of evil, like adultery, against which a stand must be taken in public however much it is enjoyed in private.” Inflation eliminates the slack in the economy and makes countervailing power virtually inoperative.
Inflation, moreover, is a characteristic of the Permanent War Economy and makes controls inevitable. This will have a permanent impact on the nature of capitalism, and it is on this rather lugubrious note that Galbraith concludes his book:
Given war or preparation for war – coupled with the effect of these on the public’s expectations as to prices – there is every likelihood that the scope for decentralized decision will be substantially narrowed. It is inflation, not deflation or depression, that will cause capitalism to be modified by extensive centralized decision. The position of capitalism in face of this threat is exceedingly vulnerable. This is not a matter of theory but of experience ... A few months of inflation [in 1950] accomplished what ten years of depression had not required.
The concept of countervailing power, consequently, is counterfeit on two grounds. Firstly, and mainly, it takes what are simple phenomena of the class struggle and erects them into a fraudulent theory that is supposed to explain and justify the status quo. Secondly, it admittedly cannot operate in a period of inflation, which means that its functions are necessarily extremely limited, being restricted to ever-narrowing periods of deflation (at least, according to Galbraith). Countervailing power exists, yes, in so far as it is a manifestation of the class struggle; but that is the only extent to which the concept is valid. The rest is a triumph of public relations and a fraud, although an interesting one, upon an unsuspecting intelligentsia.
The struggle across opposite sides of the marketplace is only one – and a minor phase at that – of the forms of the modern class struggle. As already mentioned, it is essentially a conflict within the capitalist class and, therefore, normally less intense and historically less significant than the class struggle in the factories between capital and labor. Preoccupation with mitigating all forms of the class struggle has become one of the hallmarks of American twentieth century liberalism; and, as a rule, no distinction is made among various types of class struggles. The important thing in the modern liberal lexicon is to have social peace – usually at any price.
Galbraith is no exception to this characteristic liberal approach. If he did not make his position entirely clear to everyone in American Capitalism, he is unambiguous in a paper on Countervailing Power, delivered before the December 1953 annual meeting of the American Economic Association. He states:
I fear I did not make as explicit as I should the welfare criteria I was employing. In partial equilibrium situations, economics has long made the maximization of consumer welfare a nearly absolute goal. Any type of economic behavior which lowered the prices of products to the consumer, quality of course being given, is good ...
In our own time, ... we regularly reject the particular equilibrium test of maximized consumer well-being. We regularly accept measures which raise product prices to ameliorate the grievances or alleviate the tensions of some social group. And it is well that we do. An opulent society can afford to sacrifice material well-being for social contentment. Higher prices of coal or clothing we regard as a small price for freedom from disorder in the coal fields or destitution in the sweatshops.
I doubt whether, in entering a defense of the social utility of countervailing power, I made sufficiently clear whether my standard was the welfare of the consumer or the minimization of social tension. It was natural that perceptive critics would take up the attack on the test of consumer welfare. Had I been less under the influence of this norm myself I would have invited the battle in the area of social harmonies. This, I submit, is also the critical test. American society has not recently been threatened in peacetime (or even in wartime) by a shortage of food. There have been times when the tensions of the farming community were a threat to orderly democratic process. The evolution of countervailing power in the labor market has similarly been a major solvent of tensions in the last half-century. Most would now agree, I think, that this has been worth a considerable price. (Italics mine – T.N.V.)
The concept of countervailing power – objectively in the view of its creator – has the dual purpose of softening the class struggle (reducing social tensions) and of creating the proper socio-economic climate for progressive economic development (dissipating the psychosis of depression and justifying state monopoly capitalism). In the course of developing his essay in social criticism, Galbraith, as we have pointed out, has had to do violence to many basic social phenomena, such as the nature of and reasons for the growth of the trade-union movement. He has also felt constrained to exhibit his ignorance of Marxism. He obviously believes he is making a telling point when he states: “In the Marxian lexicon, capitalism and competition are mutually exclusive concepts; the Marxian attack has not been on capitalism but on monopoly capitalism.” How one person can be so wrong in such a brief sentence is difficult to comprehend. Suffice it to say, that Marx always held competition to be a basic characteristic of capitalism, and the Marxian analysis of state monopoly capitalism constitutes a fundamental attack on capitalism as a social system that has outlived its historical usefulness.
In the same paper before the American Economic Association, Galbraith is forced to admit that one of his major points – the reduction of consumer prices by large retail chain operations – is not really due to countervailing power, but to competition. He states:
The gains from opposing mass retail buying to large-scale or oligopolistic production have, I think, been fairly generally conceded. The question has been asked, however, as to what eleemosynary instinct causes the gains that are won by the mass buyer to be passed along to the consumer. In my book I argued that it was the result of the shape of the production function in retailing. My critics have suggested that it is because retailing, the mass buyers notwithstanding, is still a competitive industry. (It is likely to remain one, for entry is almost inherently easy.) I suspect they are right. I am sure that I was more than a little reluctant, at this particular stage in my argument, to confess a reliance on competition. (Italics mine – T.N.V.)
The self-generating character of countervailing power and its beneficent effects become just a series of unproved statements on the part of Galbraith – so much so, that the self-generating character of countervailing power may be labeled a self-generating fraud. This is pretty much the view of Galbraith’s professional critics. States Professor George J. Stigler (in a paper entitled, The Economist Plays With Blocs, delivered at the same session of the American Economic Association):
We must regret that at the very threshold of the doctrine of countervailing power, Galbraith eschews rational explanation. It is not as if one were asking, in the tones of a stuffy formalist, for explicit development of details of a theory whose general outline is familiar or which is a plausible extension of well-explored theories. The theory of bilateral oligopoly can hardly be said to exist, and the theory of bilateral monopoly – which Galbraith disposes of in a singularly high-handed manner – offers only contradictions to his theory ... Galbraith’s notion of countervailing power is a dogma, not a theory. It lacks a rational development and must be accepted or rejected without reference to its unstated logical antecedents ... Nor is there any explanation, in Galbraith’s book or elsewhere, why bilateral oligopoly should in general eliminate, and not merely redistribute, monopoly gains.
Stigler concludes his critique of Galbraith by stating:
I want to close with an apology for the consistently negative attitude I have felt compelled to take with respect to Galbraith’s theory. One would like to speak well of so urbane and witty a presentation. Especially at this season one would like to avoid expressing doubts that a mysterious, benevolent being will crawl down each and every chimney and leave a large income as well as directions to the nearest cut-rate outlet. Yet even at this season, Galbraith cannot persuade us that we should turn our economic problems over to Santa.
Another academic critic, John Perry Miller, in a paper at the same meeting, entitled Competition and Countervailing Power: Their Rôles in the American Economy, summarizes Galbraith’s theoretical approach by stating:
Here indeed is an optimistic doctrine of the dialectic suggesting that it is the search for power and countervailing power rather than self-interest in the search for gain which promotes economic progress. [Miller does not have much faith in countervailing power and expresses his basic attitude by declaring:] The further one burrows into the concept of countervailing power the clearer it becomes that a catchy phrase is being used to cover a variety of situations. It is doubtful whether so used it is a very useful tool of analysis. I doubt, also, that it is good history. And as an instrument of policy it is at best one in a crowded kit of tools along with the traditional tools of the policy of competition.
Nor were the discussants of the main papers at this session on Countervailing Power any kinder toward Galbraith than the official critics. David McCord Wright concludes his discussion with this trenchant blow: “I should judge Dr. Galbraith one of the most effective enemies of both capitalism and democracy.”
While Galbraith is to be commended for writing in non-technical language, and for attempting to relate economic theory to social reality (i.e., for returning to the precepts of political economy), his humor smacks of smart-aleckism and is misplaced in a serious work. The popularity that Galbraith’s book has achieved, however, is not due to its style. And it is only partly due to excellent public relations in its promotion. Countervailing power appeals to a certain segment of intellectuals who are groping for doctrines that will reassure them that their world is not crumbling. This the theory of countervailing power attempts to do. Amidst the general bankruptcy of American bourgeois political economy, Galbraith is refreshing in his candor and style, but destined to a short life as the theorist of the day, for the simple reason that his theory is a fraud and will not even be accepted by the liberal bourgeoisie for whose benefit it was concocted.
* * *
Footnote
1. Published by Houghton Mifflin Co., Boston 1952, 217 pp.
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<h2>Frank Demby</h2>
<h1>What Are the Facts on the Gov’t<br>
Excess Profits Swindle?</h1>
<h3>(September 1940)</h3>
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<p class="info">From <strong>Labor Action</strong>, <a href="../../../../newspape/laboraction-ny/1940/index.htm#la04_22" target="new">Vol. 4 No. 22</a>, 9 September 1940, p. 3.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
<hr width="100%" noshade="noshade" size="1">
<p class="fst">While the final text of the proposed excess profits and amortization bill is still to be prepared, the Bill as passed in the house indicates that one of the most gigantic swindles in the history of the country is now being prepared in Washington. In order to offset the growing clamor from labor unions, some sections of the press and public sentiment, that if the workers are to be conscripted, and offered to the sacrifice, the only fair thing to do is to conscript capital as well, the ROOSEVELT ADMINISTRATION IS PREPARING AN EXCESS PROFITS AND AMORTIZATION BILL THAT WILL SEEMINGLY REQUIRE SACRIFICES OF CAPITAL, BUT WHICH WILL, IN REALITY, GUARANTEE THE CAPITALISTS HIGHER PROFITS THAN THEY HAVE MADE IN MANY A LONG YEAR.</p>
<p>Manufacturers are holding up hundreds of millions of dollars worth of army, navy and air contracts because, as they say, “We don’t trust the government; we must have absolute guarantees (of our profits) before a wheel turns.” Just imagine what a hue and cry would arise from the paid propagandists of the capitalist press if the workers, after the conscription bill is passed, said, “We refuse to allow ourselves to be conscripted until we receive absolute guarantees that any war this country engages in will not be for imperialist purposes but in the interests of the working masses of this country!” Cries of “traitor,” “red,” “fifth columnists,” etc. would be hurled at the workers. But when a manufacturer refuses to sign a “defense” contract until his profits are guaranteed, that is true patriotism.<br>
</p>
<h4>Millions for the Millionaires</h4>
<p class="fst">The President has already said “there will be no new millionaires as a result of the armaments program. However, the tax bill in preparation, gives the lie to this high-sounding phrase. Not only will there be new millionaires, but the present millionaires (according to a recently issued statement of the Treasury, 50 individuals filed income taxes for 1939 showing incomes of a million dollars and more in 1938) will make even more millions than they have in the past.</p>
<p>What worries our patriotic manufacturers most appears to be the amortization measure. Their argument runs something like this: “These new contracts require us to erect new plants. These new factories will cost huge sums of money and they will be practically worthless once the war is over. Unless we are allowed to write-off (amortize) the cost of the new factories in a ‘reasonable’ period of time (five years or less), we will lose our shirts.” Normally, a manufacturer writes-off the cost of new plant equipment (capital investment) in a period of 20 years by setting up a sinking fund. In other words, if a five year period is decided upon, approximately 20% of the cost of new plant equipment will be added to expenses. Since in this modern day of mass production, fixed capital (machines, etc.) constitutes an ever-increasing proportion of the total capital accumulation of the modern corporation, this means that sums running into the millions and millions will be deducted from profits AND THEREFORE NOT ELIGIBLE TO THE EXCESS PROFITS TAX.</p>
<p>In addition to this gravy which will be secured to the capitalist, there are any number of other considerations which are positively fascinating in their appeal to the manufacturer’s patriotism. Suppose, for example, the war and/or the “defense” program lasts more than five years; having already written-off the cost of the new factories, profits will be absolutely fantastic. Even should the war period end in the next five years, an airplane manufacturer, to take just one example, will certainly be able to use his new factories in peacetime pursuits.</p>
<p>Finally, in many cases, it will undoubtedly be found that these new factories erected for “defense” purposes will not fill only government orders. Many of them will be able to fill private contracts for England. In such cases, a manufacturer may well decide to use his new plants to fill U.S. Government orders, since these may be subject to various restrictions (Walsh-Healy Bill, for example) and his old plants to fill other contracts. Truly, the prospects of coining huge profits are so good that it actually staggers the imagination. AND SINCE ROOSEVELT AND ALL CONGRESSIONAL LEADERS HAVE ALREADY STATED THEIR WILLINGNESS TO GUARANTEE THE PASSAGE OF AN AMORTIZATION MEASURE PROVIDING FOR EVERYTHING THE MANUFACTURERS WANT. WHAT IS REALLY DISTURBING OUR PATRIOTIC MANUFACTURERS?<br>
</p>
<h4>Just a Tiny Fly in the Ointment</h4>
<p class="fst">It is simply the insistence of the Administration, fully aware that an election is coming up in November, in coupling the amortization measure with an excess profits tax. The politicians know that if they give the capitalists everything they want in regard to the amortization measure, mass resentment will be extremely high (and will cost votes) unless this is compensated for by placing a ceiling on profits. That is why Roosevelt has turned a deaf ear to the pleas of the <strong>New York Times</strong> to pass only an amortization bill now and spend the rest of the year studying the problem of excess profits very carefully since “it is so complicated and can’t go into effect until the 1941 income tax returns are made.” Excess profits, of course, are a “complicated” question, but not conscription. Present signs, however, indicate that an excess profits tax will be passed. But what kind? – that is another question. Without going into the technical complications, and the various alternatives, which require a Philadelphia lawyer to disentangle, the basis of the proposed bill is TO EXEMPT FROM AN EXCESS PROFITS TAX, PROFITS AMOUNTING TO A SUM EQUAL TO THE AVERAGE NET PROFIT MADE DURING 1930–1939. For most of the large corporations, this is a pretty favorable period. It has only one bad year included – 1938. It includes two fairly good years, 1936 and 1939 – and one exceptionally good year, 1937. In addition, the average earnings during this base-period will be increased by 8% of new capital invested. This means that large corporations (say General Motors or U.S. Steel, who will certainly get their .share of the contracts) will make from 8 to 10% and more profits, without having to pay an excess profits tax.</p>
<p>There may not be many new millionaires, but a lot of the old ones are going to increase their fortunes sizeably. Moreover, should profits now run so phenomenally high, it doesn’t follow that the portion of profits which is subject to the excess profits tax will be confiscated by the government. So far, the highest excess profits tax proposed is 50%. The average rate aimed at is apparently 25%. Thus, the manufacturer will be allowed to keep a goodly portion of the excess profits. Certainly, no restraints on “private initiative” here!</p>
<p>The sacrifices that capital will be required to make “in the interests of national defense” will, consequently, be largely on paper. They will be useful for bamboozling the workers, but they will not interfere with the patriotism of the bosses – which, as always, centers around their pocket-books.</p>
<p>Just in case the above analysis has been a bit too difficult for you to follow in detail. THE SINGLE FACT WHICH EXPOSES THE EXCESS PROFITS SWINDLE MORE THAN ANYTHING ELSE IS THAT THE ESTIMATED YIELD OF THE PROPOSED EXCESS PROFITS TAX FOR 1940 IS $300,000,000. This, of course, is mere chicken-feed. It is a drop in the bucket when compared with the billions and billions of dollars now being spent on armaments. It is even less when compared with the billions of dollars that corporations will make. It clearly shows that the Government does not expect very much help in meeting the costs of “defense” from the excess profits tax. As always, the costs of war will be borne by the masses – not by the bosses.</p>
<p>One immediate conclusion that every worker must draw from this situation is to raise in his union the demand for NATIONALIZATION OF ALL WAR INDUSTRIES. THIS IS ONE WAY OF STOPPING THE PROPOSED EXCESS PROFITS SWINDLE.</p>
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Frank Demby
What Are the Facts on the Gov’t
Excess Profits Swindle?
(September 1940)
From Labor Action, Vol. 4 No. 22, 9 September 1940, p. 3.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
While the final text of the proposed excess profits and amortization bill is still to be prepared, the Bill as passed in the house indicates that one of the most gigantic swindles in the history of the country is now being prepared in Washington. In order to offset the growing clamor from labor unions, some sections of the press and public sentiment, that if the workers are to be conscripted, and offered to the sacrifice, the only fair thing to do is to conscript capital as well, the ROOSEVELT ADMINISTRATION IS PREPARING AN EXCESS PROFITS AND AMORTIZATION BILL THAT WILL SEEMINGLY REQUIRE SACRIFICES OF CAPITAL, BUT WHICH WILL, IN REALITY, GUARANTEE THE CAPITALISTS HIGHER PROFITS THAN THEY HAVE MADE IN MANY A LONG YEAR.
Manufacturers are holding up hundreds of millions of dollars worth of army, navy and air contracts because, as they say, “We don’t trust the government; we must have absolute guarantees (of our profits) before a wheel turns.” Just imagine what a hue and cry would arise from the paid propagandists of the capitalist press if the workers, after the conscription bill is passed, said, “We refuse to allow ourselves to be conscripted until we receive absolute guarantees that any war this country engages in will not be for imperialist purposes but in the interests of the working masses of this country!” Cries of “traitor,” “red,” “fifth columnists,” etc. would be hurled at the workers. But when a manufacturer refuses to sign a “defense” contract until his profits are guaranteed, that is true patriotism.
Millions for the Millionaires
The President has already said “there will be no new millionaires as a result of the armaments program. However, the tax bill in preparation, gives the lie to this high-sounding phrase. Not only will there be new millionaires, but the present millionaires (according to a recently issued statement of the Treasury, 50 individuals filed income taxes for 1939 showing incomes of a million dollars and more in 1938) will make even more millions than they have in the past.
What worries our patriotic manufacturers most appears to be the amortization measure. Their argument runs something like this: “These new contracts require us to erect new plants. These new factories will cost huge sums of money and they will be practically worthless once the war is over. Unless we are allowed to write-off (amortize) the cost of the new factories in a ‘reasonable’ period of time (five years or less), we will lose our shirts.” Normally, a manufacturer writes-off the cost of new plant equipment (capital investment) in a period of 20 years by setting up a sinking fund. In other words, if a five year period is decided upon, approximately 20% of the cost of new plant equipment will be added to expenses. Since in this modern day of mass production, fixed capital (machines, etc.) constitutes an ever-increasing proportion of the total capital accumulation of the modern corporation, this means that sums running into the millions and millions will be deducted from profits AND THEREFORE NOT ELIGIBLE TO THE EXCESS PROFITS TAX.
In addition to this gravy which will be secured to the capitalist, there are any number of other considerations which are positively fascinating in their appeal to the manufacturer’s patriotism. Suppose, for example, the war and/or the “defense” program lasts more than five years; having already written-off the cost of the new factories, profits will be absolutely fantastic. Even should the war period end in the next five years, an airplane manufacturer, to take just one example, will certainly be able to use his new factories in peacetime pursuits.
Finally, in many cases, it will undoubtedly be found that these new factories erected for “defense” purposes will not fill only government orders. Many of them will be able to fill private contracts for England. In such cases, a manufacturer may well decide to use his new plants to fill U.S. Government orders, since these may be subject to various restrictions (Walsh-Healy Bill, for example) and his old plants to fill other contracts. Truly, the prospects of coining huge profits are so good that it actually staggers the imagination. AND SINCE ROOSEVELT AND ALL CONGRESSIONAL LEADERS HAVE ALREADY STATED THEIR WILLINGNESS TO GUARANTEE THE PASSAGE OF AN AMORTIZATION MEASURE PROVIDING FOR EVERYTHING THE MANUFACTURERS WANT. WHAT IS REALLY DISTURBING OUR PATRIOTIC MANUFACTURERS?
Just a Tiny Fly in the Ointment
It is simply the insistence of the Administration, fully aware that an election is coming up in November, in coupling the amortization measure with an excess profits tax. The politicians know that if they give the capitalists everything they want in regard to the amortization measure, mass resentment will be extremely high (and will cost votes) unless this is compensated for by placing a ceiling on profits. That is why Roosevelt has turned a deaf ear to the pleas of the New York Times to pass only an amortization bill now and spend the rest of the year studying the problem of excess profits very carefully since “it is so complicated and can’t go into effect until the 1941 income tax returns are made.” Excess profits, of course, are a “complicated” question, but not conscription. Present signs, however, indicate that an excess profits tax will be passed. But what kind? – that is another question. Without going into the technical complications, and the various alternatives, which require a Philadelphia lawyer to disentangle, the basis of the proposed bill is TO EXEMPT FROM AN EXCESS PROFITS TAX, PROFITS AMOUNTING TO A SUM EQUAL TO THE AVERAGE NET PROFIT MADE DURING 1930–1939. For most of the large corporations, this is a pretty favorable period. It has only one bad year included – 1938. It includes two fairly good years, 1936 and 1939 – and one exceptionally good year, 1937. In addition, the average earnings during this base-period will be increased by 8% of new capital invested. This means that large corporations (say General Motors or U.S. Steel, who will certainly get their .share of the contracts) will make from 8 to 10% and more profits, without having to pay an excess profits tax.
There may not be many new millionaires, but a lot of the old ones are going to increase their fortunes sizeably. Moreover, should profits now run so phenomenally high, it doesn’t follow that the portion of profits which is subject to the excess profits tax will be confiscated by the government. So far, the highest excess profits tax proposed is 50%. The average rate aimed at is apparently 25%. Thus, the manufacturer will be allowed to keep a goodly portion of the excess profits. Certainly, no restraints on “private initiative” here!
The sacrifices that capital will be required to make “in the interests of national defense” will, consequently, be largely on paper. They will be useful for bamboozling the workers, but they will not interfere with the patriotism of the bosses – which, as always, centers around their pocket-books.
Just in case the above analysis has been a bit too difficult for you to follow in detail. THE SINGLE FACT WHICH EXPOSES THE EXCESS PROFITS SWINDLE MORE THAN ANYTHING ELSE IS THAT THE ESTIMATED YIELD OF THE PROPOSED EXCESS PROFITS TAX FOR 1940 IS $300,000,000. This, of course, is mere chicken-feed. It is a drop in the bucket when compared with the billions and billions of dollars now being spent on armaments. It is even less when compared with the billions of dollars that corporations will make. It clearly shows that the Government does not expect very much help in meeting the costs of “defense” from the excess profits tax. As always, the costs of war will be borne by the masses – not by the bosses.
One immediate conclusion that every worker must draw from this situation is to raise in his union the demand for NATIONALIZATION OF ALL WAR INDUSTRIES. THIS IS ONE WAY OF STOPPING THE PROPOSED EXCESS PROFITS SWINDLE.
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<h2>T.N. Vance</h2>
<h4>Notes of the Month</h4>
<h1>Fear of Depression in the U.S.</h1>
<h3>(December 1953)</h3>
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<p class="info">From <strong>The New International</strong>, <a href="../../../../newspape/ni/issue3.htm#ni53_11" target="new">Vol. XIX No. 6</a>, November–December 1953, pp. 303–312.<br>
Transcribed & marked up by <a href="../../../../../../admin/volunteers/biographies/eocallaghan.htm" target="new">Einde O’Callaghan</a> for the <strong>Encyclopaedia of Trotskyism On-Line (ETOL)</strong>.</p>
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<br>
<p class="fst">“DEPRESSION IS A REAL FEAR for many of us. It has already touched the farmers. It may touch others in the months ahead.” Thus spoke Adlai E. Stevenson, leader of the “loyal opposition,” in his Philadelphia speech of December 12th. The atmosphere of anxiety appears to reach far beyond the farmers, extending from Main Street to Wall Street. Most people, including those in government, are worried about the economic outlook.</p>
<p>That there is some basis for these fears can be seen in the most recent report of the President’s Council of Economic Advisers. The report for December receives the headline in the <strong>New York Times</strong> of December 15th, <em>November Business Activity Shows First Dip From 1952</em>. Factory output and earnings were off. The average work-week dipped below forty hours, with the 39.9-hour average being the lowest for any November in the last four years. While there were some favorable factors, unemployment increased by 266,000.</p>
<p>If one examines the basic national income data, as published by the Department of Commerce in the November issue of the <strong>Survey of Current Business</strong>, it becomes apparent that a mild recession started in the third quarter of 1953. Gross national product declined from a seasonally adjusted annual rate of $372.4 billion in the second quarter of 1953 to $369 billion in the third quarter. Since personal consumption expenditures and government purchases of goods and services increased, although almost imperceptibly, gross private domestic investment accounts for the decline. For all practical purposes, the entire story is told by the reduction in the change in business inventories from an annual rate of $8.8 billion in the second quarter to one of $4.5 billion in the third quarter.</p>
<p>In some quarters, it is fashionable to attribute the present recession to a mere “inventory adjustment” – presumably of no consequence. The November 1953 <strong>Survey of Current Business</strong> has this to say about the subject:</p>
<p class="quoteb">“The bulk of the advance in inventories since the strike-affected third quarter of last year has been in durable goods. Additions to durable goods inventories have reflected substantial replenishments that followed the widespread imbalances caused by the steel shortages as well as the subsequent <em>buildup in many hard good lines, such as automobiles, which were carrying unusually low inventories in the earlier period of production controls. More recently, some backing up of stocks because of lower than expected sales also have been a contributing factor, affecting particularly third, quarter inventories in retail trade.</em>” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">This is a most curious attempt to evade facing reality – and in a publication that is hardly read by the general public. The statement regarding inventories of automobiles is sheer fiction, as retail sales of automobiles have been declining. It has been obvious for several months that production of automobiles has been exceeding sales. The increase in inventories has nothing to do with production restrictions that existed last year or the year before. Not only have retail sales in general been lower than expected, but they are currently running five to ten per cent under last year.</p>
<p>The decline in retail sales naturally begins to have an impact at the factory level. Factory sales of all motor vehicles, for example, reached a 1953 peak of 723,532 in April. After declines of eighty and sixty thousand vehicles in May and June, factory sales of motor vehicles still totalled 705,132 in July. In August, the figure was down to 615,382 and in September to 573,688. It is estimated that production of motor vehicles for 1953 may exceed retail sales by several hundred thousand units.</p>
<p>New orders are, of course, one of the most sensitive barometers of business conditions. In view of the softening throughout the economy, it is not surprising that net orders declined from a peak of $25.7 billion in April 1953 to $22.4 billion in September, the latest month available. This is a decline of twelve per cent, and must be regarded as significant in any appraisal of the economy.</p>
<p>Ninety per cent of the decline in recent months in new orders is to be found in the durable goods industries – total net new orders for all durable goods industries declining from $12.6 billion in April 1953 to $9.6 billion in September. Since the bulk of this decline occurs in transportation equipment, including motor vehicles and parts, the crisis in consumer durables, centering in the automobile industry, is evident.</p>
<p>At the same time, there has been some increase in the number of industrial and commercial failures, although not as yet of an alarming nature. More significant has been a pronounced decline in the number of new business incorporations. From a 1953 peak of 9,659 in March, the number of new incorporations throughout the country declined to 7,433 in September – a drop of almost 25 per cent. As the hucksters on Madison Avenue put it, “The economy has become more competitive.”<br>
</p>
<p class="fst">AN INTERESTING APPRAISAL of the economic outlook is contained in the <strong>New York Times</strong> of December 20th, in the column, <em>The Merchant’s Point of View</em>, by William M. Freeman:</p>
<p class="quoteb">The population is just over 160,000,000 and is continuing to go up. While the baby crop is dropping, there are more toddlers and more elderly persons, which means a heavier load on the more or less static middle group. The number of marriages is decreasing. Demand for new homes is easing, a dip that is accentuated by higher prices. Materials prices also are weaker, so that prices of homes and major appliances should turn downward in due course.</p>
<p class="quote">Sales of furniture, major appliances and a host of other items are closely linked to the housing trend. The television receiver, which increases living room usage, traffic, wear, destruction and replacement, is helping a bit in furniture volume, as is the continuing trend to outdoor living, sparked by the flight from the cities to a semi-suburban way of life.</p>
<p class="quote">Employment is dipping steadily, with business activity showing its first minus signs for the year in November. Some 1,428,000 persons were jobless in November, 2.3 per cent of the labor force; this was the sharpest rise recorded in the year.</p>
<p class="quote">All of these factors add up to a downward readjustment, now accelerating. with industrial production off 6 per cent from the peak in March. The Federal Reserve Board’s index stood at the close of November at 228, based on the 1935–39 average taken as 100, against the March figure of 243.</p>
<p class="quote">Inventories are heavy in most lines. Retail sales are trailing 1952 volume, but the year as a whole, with attractive prices on desired items rather than on ‘lemons,’ aided by special promotions backed by heavy advertising, should finish between 1 and 2 per cent ahead of last year ...</p>
<p class="fst">In a word, there is a marked softening evident throughout most of the economy. In almost every market, supply now exceeds demand. The term, “buyers’ market,” is used more and more frequently, and is an apt description of the situation in the economy as a whole. While there is reason to fear depression, there is no reason for panic to prevail. Many new products, and improvements in old products, are being put on the market. Business volume is still at a very high level. Freeman concludes his column, quoted above, as follows:</p>
<p class="quoteb">It is factors such as this, the product of the engineer, the artist, the production man and the planner, that distort computations. There is no question of a readjustment coming up, aside from anything we scare ourselves into, as a result of the rapid post-Korea expansion and the existence of surpluses in many lines that must be worked off before production rates can be resumed.</p>
<p class="quote">The outlook, therefore, is for sharply intensified competition, with a marked increase in competitive selling in every aspect of the economy. But, and here’s something that’s been ignored: The slide-off, in the works since mid-year, is from record levels. It seems very likely, therefore, that the year ahead will come close to the 1952 figure, which was very near the record. And the country’s inventive genius can effect this outlook only one way – upward.</p>
<p class="fst">Ignoring the propaganda content in the phrase, “inventive genius,” there has been as we pointed out in <a href="../04/pwe-eisenhower.html" target="new"><em>The Permanent War Economy Under Eisenhower</em></a> (cf. March–April 1953 issue of <strong>The New International</strong>, p. 97) an enormous amount of capital accumulation since the end of World War II. Productive capacity, therefore, is still increasing at a goodly rate and there is, as yet, no sign of any significant downturn in the accumulation of capital, as can be seen from the following tabulation covering the last seven quarters.</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td colspan="4">
<p class="smc"><strong>NET PRIVATE CAPITAL FORMATION, 1952–1953, by Quarters</strong><br>
(Billions of Dollars, Seasonally Adjusted at Annual Rates)</p>
</td>
</tr>
<tr valign="bottom">
<td>
<p class="smc"><em>Year and<br>
Quarter</em></p>
</td>
<td>
<p class="smc"><em>Gross<br>
Investment</em></p>
</td>
<td>
<p class="smc"><em>Capital<br>
Consumption<br>
Allowances</em></p>
</td>
<td>
<p class="smc"><em>Net<br>
Investment</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, I Quarter</p>
</td>
<td>
<p class="smc">$50.4 </p>
</td>
<td>
<p class="smc">$25.7 </p>
</td>
<td>
<p class="smc">$24.7 </p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, II Quarter</p>
</td>
<td>
<p class="smc">49.6</p>
</td>
<td>
<p class="smc">26.9</p>
</td>
<td>
<p class="smc">22.7</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, III Quarter</p>
</td>
<td>
<p class="smc">52.3</p>
</td>
<td>
<p class="smc">27.0</p>
</td>
<td>
<p class="smc">25.3</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, IV Quarter</p>
</td>
<td>
<p class="smc">57.9</p>
</td>
<td>
<p class="smc">28.2</p>
</td>
<td>
<p class="smc">29.7</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, I Quarter</p>
</td>
<td>
<p class="smc">54.0</p>
</td>
<td>
<p class="smc">28.2</p>
</td>
<td>
<p class="smc">25.8</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, II Quarter</p>
</td>
<td>
<p class="smc">61.0</p>
</td>
<td>
<p class="smc">29.2</p>
</td>
<td>
<p class="smc">31.8</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, III Quarter</p>
</td>
<td>
<p class="smc">56.5</p>
</td>
<td>
<p class="smc">29.6</p>
</td>
<td>
<p class="smc">26.9</p>
</td>
</tr>
<tr>
<td colspan="4">
<p class="sm1">Source: <strong>Survey of Current Business</strong>, November 1953.</p>
</td>
</tr>
</tbody></table>
<p class="fst">It is true that the second quarter of 1953 represents the peak in capital accumulation, both gross and net. It is much too early, however, to draw conclusions as to whether the downturn in the third quarter will turn out to be mainly an inventory adjustment, or whether it presages a characteristic decline in the traditional cycle of capital accumulation. At the moment, of course, the figures for gross private investment in producers’ durable equipment (new plant and equipment) do not show any recession characteristics. At seasonally adjusted annual rates, the estimates for producers’ durable equipment for the last seven quarters are:</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td>
<p class="smc"><em>Year and<br>
Quarter</em></p>
</td>
<td rowspan="8"> </td>
<td>
<p class="smc"><em>Billions<br>
Dollars</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, I Quarter</p>
</td>
<td>
<p class="smc">$25.6 </p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, II Quarter</p>
</td>
<td>
<p class="smc">25.6</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, III Quarter</p>
</td>
<td>
<p class="smc">24.9</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, IV Quarter</p>
</td>
<td>
<p class="smc">25.5</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, I Quarter</p>
</td>
<td>
<p class="smc">26.2</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, II Quarter</p>
</td>
<td>
<p class="smc">26.9</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, III Quarter</p>
</td>
<td>
<p class="smc">27.1</p>
</td>
</tr>
</tbody></table>
<p class="fst">Obviously, a sizable portion of the gross investment in plant and equipment represents a net increase in productive capacity. Contained in these figures are the seeds of a typical capitalist crisis of overproduction. <em>But the seeds have not yet germinated.</em> For the time being, the accumulation of real capital keeps pace with the increase in total output. Any drastic curtailment in capital formation would herald the approach of deep-seated capitalist crisis. Under the Permanent War Economy, however, such a development is virtually excluded.</p>
<p>And yet, the signs of atrophy, alluded to in <em>The Permanent War Economy Under Eisenhower</em>, multiply. The investment figures cited above are not without interest. They show that capital is apparently being consumed at a faster rate than gross investment increases. Consequently, the increase in net investment is not keeping pace with the increase in gross investment. What seems to be happening is that the increasingly high organic composition of capital results in a larger proportion of output going toward the replacement of constant capital. As we pointed out in the original series of articles, such a trend must necessarily have an adverse impact on the rate of surplus value, and therefore ultimately on the <em>rate</em> of profit. All the evidence points to a reduced rate of profit in 1954. From this, it does not follow, however, that a capitalist crisis is at hand.</p>
<p>Parenthetically, it should be observed that as the figures for capital consumption allowances rise, the use of gross national product data is fraught with increasing danger and a larger margin of error. Increasing rates of depreciation and obsolescence may well be symptomatic of rising rates of productivity. They can also give rise to new types of capitalist contradictions and new problems which capitalist state intervention, far from solving, actually accentuates. When estimates of capital consumption reach eight per cent of gross output, as they currently do, it is no longer a problem solely for accountants. Such figures have an economic and political impact. Once five-year amortization of “defense” plants and the excess profits tax are eliminated, it remains to be seen whether “normal” capitalist incentives will be sufficient to maintain the required high rate of investment that a high level equilibrium in the economy apparently requires.</p>
<p>Again, it is too early to tell, but the fact remains that between the second and third quarter of 1953 personal savings, as estimated by the Department of Commerce, increased from an annual rate of $17.2 billion to an annual rate of $18.8 billion. An increase of nine per cent in the amount of personal savings would appear to be a very sizable figure, but in view of the dubious residual method by which Commerce derives these estimates too much importance should not be attached to this change. Much larger quarterly changes have been recorded in the recent past, without any undue economic significance. But it is possible that the apparent increase in the amount of personal savings <em>could</em> reflect growing caution on the part of the average consumer as the fear of depression grows.</p>
<p>The major factor in tempering any unduly pessimistic forecast of the economic outlook necessarily remains the size, composition and trend of war outlays. In analyzing these data, it will be helpful to have the quarterly figures as presented in the following tabulation.</p>
<table cellpadding="1" cellspacing="1" align="center">
<tbody><tr>
<td colspan="6">
<p class="smc"><strong>WAR OUTLAYS, 1952–1953, by Quarters<br>
AND THEIR RELATIONSHIP TO TOTAL OUTPUT</strong><br>
(Dollar Figures in Billions, Seasonally Adjusted at Annual Rates)</p>
</td>
</tr>
<tr valign="bottom">
<td rowspan="2">
<p class="smc"><em>Year and<br>
Quarter</em><br>
</p>
</td>
<td rowspan="2">
<p class="smc"><em>Net<br>
National<br>
Product<br>
(1)</em></p>
</td>
<td colspan="3">
<p class="smc"><em>WAR OUTLAYS</em></p>
</td>
<td rowspan="2">
<p class="smc"><em>Col. (4)<br>
as % of<br>
Col. (1)<br>
(5)</em></p>
</td>
</tr>
<tr>
<td>
<p class="smc"><em>Direct<br>
(2)</em></p>
</td>
<td>
<p class="smc"><em>Indirect<br>
(3)</em></p>
</td>
<td>
<p class="smc"><em>Total<br>
(4)</em></p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, I Quarter</p>
</td>
<td>
<p class="smc">$314.7 </p>
</td>
<td>
<p class="smc">$43.9 </p>
</td>
<td>
<p class="smc">$8.8 </p>
</td>
<td>
<p class="smc">$52.7 </p>
</td>
<td>
<p class="smc"> 16.7%</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, II Quarter</p>
</td>
<td>
<p class="smc">316.4</p>
</td>
<td>
<p class="smc">47.1</p>
</td>
<td>
<p class="smc">9.3</p>
</td>
<td>
<p class="smc">56.4</p>
</td>
<td>
<p class="smc">17.8</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, III Quarter</p>
</td>
<td>
<p class="smc">319.7</p>
</td>
<td>
<p class="smc">46.4</p>
</td>
<td>
<p class="smc">9.2</p>
</td>
<td>
<p class="smc">55.6</p>
</td>
<td>
<p class="smc">17.4</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1952, IV Quarter</p>
</td>
<td>
<p class="smc">331.3</p>
</td>
<td>
<p class="smc">48.6</p>
</td>
<td>
<p class="smc">8.0</p>
</td>
<td>
<p class="smc">56.6</p>
</td>
<td>
<p class="smc">17.1</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, I Quarter</p>
</td>
<td>
<p class="smc">336.9</p>
</td>
<td>
<p class="smc">49.4</p>
</td>
<td>
<p class="smc">8.6</p>
</td>
<td>
<p class="smc">58.0</p>
</td>
<td>
<p class="smc">17.2</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, II Quarter</p>
</td>
<td>
<p class="smc">341.5</p>
</td>
<td>
<p class="smc">51.3</p>
</td>
<td>
<p class="smc">9.0</p>
</td>
<td>
<p class="smc">60.3</p>
</td>
<td>
<p class="smc">17.7</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">1953, III Quarter</p>
</td>
<td>
<p class="smc">339.0</p>
</td>
<td>
<p class="smc">50.4</p>
</td>
<td>
<p class="smc">7.9</p>
</td>
<td>
<p class="smc">58.3</p>
</td>
<td>
<p class="smc">17.2</p>
</td>
</tr>
</tbody></table>
<p class="fst">The net national product figures are derived from Commerce estimates of gross national product and national income. The concepts of war outlays, direct and indirect, remain as heretofore, with the derivation of the figures following the explanation on pages 94–95 of the March–April 1953 issue of <strong>The New International</strong>. The margin of error in these quarterly estimates cannot be significantly greater than in the annual figures presented in prior articles.</p>
<p>The ratio of war outlays to total output, the prime mover in this period of capitalism, has reached a fairly even plateau. During the entire period under review, the extreme variation is to be found between the 16,7 per cent of the first quarter of 1952 and the 17.8 per cent of the second quarter of the same year. This represents a variation of but six per cent at the peak, which is well within the margin of error in the underlying data. A war outlays ratio of 17 per cent is significant, but as it continues <em>at the same level</em> over a period of months, and then of years, it begins to lose some of its impact. The same ratio can no longer sustain the same high level of employment, production and profits.</p>
<p>Of course, changes of one-half of one per cent in the ratio, in either direction, may well have a noticeable impact on the equilibrium level, but in their totality such changes are more than offset by the atrophy that begins to set in. The weakening of the impact of war outlays tends to create all sorts of illusions. At one extreme is the notion that war outlays never had anything to do with the high level of activity; hence, it makes little difference if they do decline in the future, as there will be many offsets and “prosperity” will continue. At the other extreme is the fear that the bottom will drop out of the economy, as if Washington had a completely free hand in determining the level and ratio of war outlays; this point of view, of course, fails to realize that American imperialism had and <em>still has</em> valid <em>political</em>, as well as economic, motives for the adoption of the Permanent War Economy.</p>
<p>What has happened, of course, aside from the stretch-out in the “Defense” program begun under Truman, and the truce in the Korean war, is that direct war outlays have kept pace with, and been responsible in large measure for, the rise in total output. Indirect war outlays, however, have leveled off and now tend to decline. The reduction in foreign economic aid, a notable difference in Republican policy as contrasted with that of the Democrats, is chiefly responsible for the falling off in indirect war outlays. If, on top of this, direct war outlays are reduced by $5 billion, as the Republicans now threaten, the consequences could be serious. How much the Eisenhower Administration will reduce direct war outlays, remains to be seen.</p>
<p>They may find that it is easier to eliminate agricultural price supports and such “un-American” controls than to reduce the manpower of the armed forces and to convince the American bourgeoisie as a whole that military reliance can be placed on atomic weapons to achieve the necessary degree of safety, as well as to provide the necessary implementation for foreign policy. To be sure, if the plan is to abandon Western Europe to Stalinism, then <em>temporarily</em> a sharp reduction in direct military outlays may be achieved. Granted that the bulk of isolationist tendencies are concentrated within Republican ranks, it is still inconceivable that the Eisenhower Administration is planning to abandon Europe to the tender mercies of Stalinist imperialism. Without such a major change in policy, or the working out of a basic agreement with Stalinist imperialism, the political basis for any sharp reduction in war outlays remains absent. And as long as war outlays remain at 17 per cent of total output, there cannot be a serious depression.<br>
</p>
<p class="fst">ONE OF THE OUTSTANDING EXPONENTS of the view that war outlays have had nothing to do with sustaining a high level of economic activity is W. Woytinsky. Writing in the <strong>New Leader</strong> of December 7, 1953, Woytinsky states:</p>
<p class="quoteb">“My forecast here is based on the belief that the prosperity enjoyed by this country in recent years has <em>not </em>been a Korean War prosperity. It has been rather a period of healthy growth of a vigorous and dynamic economic system, with the benefits of growth widely though unevenly distributed among broad groups of the population.”</p>
<p class="fst">To label the post-World War II expansion of American capitalism “a period of healthy growth” betrays a singularly acute lack of understanding of the world in which we live.</p>
<p>The main prop in Woytinsky’s unique approach to the economic outlook is contained in a paragraph from his prognosis of a year ago (cf. the <strong>New Leader</strong>, December 8, 1952):</p>
<p class="quoteb">“The liquidation of the defense program would mean reorientation of economic activities and a brief spell of hesitation, but by no means a contraction in the total volume of employment and production. <em>The problem will be of the same nature as the demobilization after World War II, but on a much smaller scale.</em> The last demobilization – in the sense of complete reorientation of our economy and readjustment of men released from the armed forces – took two years, and at no time did unemployment rise to 3 million in the period of readjustment.</p>
<p class="quote">The liquidation of the present defense and rearmament program would take much less time and cause much less frictional unemployment.” (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">Of course, there will be no liquidation of the defense program, although some slight reduction in the magnitude of war outlays is not excluded. The adjustment problem, however, in the event of a reduction in war outlays is not only not the same. It is entirely different. At the end of World War II, the ratio of war outlays to total output exceeded 40 per cent. A swift decline took place to the ten per cent level, but the reduction in the production of means of production and consumption during the war meant that there was room for increase in these traditional goals of economic output once the sharp decline began in the production of means of destruction. Hence, there could be no serious depression immediately following the end of World War II. It is obvious that the present situation differs markedly from that which prevailed eight years ago. The current increase (from 1950–1953) in the output of means of destruction has not only riot been accompanied by a decrease in the output of means of production and means of consumption, but has actually witnessed an increase in the production of both capital and consumers’ goods.</p>
<p>Woytinsky possesses a remarkably simplistic and mechanical view of the economy, where a drop in one sector <em>must</em> be offset by increases in other sectors. In his 1952 article, quoted above, he asserts:</p>
<p class="quoteb">“Whatever goes to the military sector is taken from civilian consumption and capital formation. Whatever is released from the military sector returns to the civilian.”</p>
<p class="fst">Here we have a modern version of Adam Smith’s “unseen hand” that automatically takes care of the economy and all supporters of capitalism, but somehow fails to eliminate the “unemployment” sector.</p>
<p>An effective reply to Woytinsky was given by Seymour E. Harris in the <strong>New Leader</strong> of December 22, 1952, when he wrote:</p>
<p class="quoteb">“I find serious gaps in Dr. Woytinsky’s crystal-gazing. He says not a word about the tremendous investment since 1945. Our capital plant has expanded by 50–60 per cent (in real terms) since 1945. These gains are far beyond what prevailed in the inflationary Twenties. Yet Dr. Woytinsky writes as though, when the Government cuts its spending on armament by 20 billion dollars or so, part of the slack will be taken up by business. A more realistic view would be that the decline of Government spending would aggravate a decline in investment.”</p>
<p class="fst">Harris has put his finger on one of the central problems when he focuses on investment. He would also appear to be more realistic than Woytinsky in appraising the possibilities of government investments as offsets to declining war outlays. He states:</p>
<p class="quoteb">“It is this failure to suggest the alternatives that leaves me cool to Dr. Woytinsky’s astrology. His assumption of gains in investment seems unrealistic. His suggestion that Government will substitute investments of various kinds for military outlays also is unsupportable. A Democratic regime, supported by an ideology favorable to deficit financing, was not prepared after twenty years of rule to present a catalogue of investment adequate to do this job; and even if it had, it was confronted with strong opposition. Does Dr. Woytinsky mean to imply that the Republican Administration will be more disposed to plan for Government intervention when military expenditures fall and thus to fill the gap? It is possible, but certainly not likely.”</p>
<p class="fst">After pointing out that tax reduction is the more likely response to a cut in military outlays, and that tax reduction can have only a limited stimulus on demand. Harris concludes his refutation of Woytinsky:</p>
<p class="quoteb">“In summary, the signs point to a business recession in 1953 or 1954 – unless the war is extended. Dr. Woytinsky does not seem concerned over the possibility of adequate demand even if the whole military program is scrapped. He seems to believe that tax reduction and pent-up demand (compared by Dr. Woytinsky with the 1946 situation, and wrongly so) will solve our problem.”</p>
<p class="fst">Woytinsky returns to the economic hustings in his <em>Economic Forecast for 1954</em>, the title of his current article, quoted above, with a modification of his “changing sector” theory of the previous year. This might be called the “excess fat” theory, for he states:</p>
<p class="quoteb">“Our economy has accumulated such an amount of fat and muscle that it is hard to visualize its temporary contraction to a level that would spell out a ‘mild recession’ such as contemplated a year ago. This is said even while giving full weight to at least four problems which have often been mentioned as presaging a downturn. These are the position of the farmer, possible cuts in defense expenditures, a new economic philosophy in Washington, and possible reorientation of foreign-trade policy.”</p>
<p class="fst">Apparently, Woytinsky is not up on the latest dietary theories, for the “excess fat” represents as much of a danger as it does a cushion. Moreover, the extra weight would seem to consist mainly of “fat” rather than of “muscle.” Unemployment caused by declines in production from peak levels is just as real to those who are placed in the category of surplus labor as unemployment that develops from a lower production base. An increase of unemployment from one million to five million may not be as catastrophic in its impact as an increase from five million to nine million, but it is still serious and would certainly constitute at least a “mild” recession.</p>
<p class="quoteb">“The cut in defense expenditures as a source of contraction of purchasing power is, to a large extent,” according to Woytinsky, “a bogey man in the modern folklore of business forecasting. The cut of $5 billion in the requested appropriation does not imply that Government purchases in 1954 will be substantially reduced in comparison with 1953. The real volume of purchases will depend partly on changes in prices, partly on political developments which may call for new appropriations. As things look now, total Government expenditures may decline by $2 billion or $3 billion or increase by a similar or larger amount.”</p>
<p class="fst">In other words, Woytinsky is not especially concerned with a projected cut in war outlays – not because “prosperity is independent of the level of war outlays” as was his position a year ago, but because there won’t be a real cut in 1954. Besides, if there is a real cut, there is plenty of fat, so it won’t be serious. And, if the “excess fat” theory doesn’t work, then there may be “political developments which may call for new appropriations.” If war expenditures are not present in sufficient volume to prevent a recession, then there will be other types of government expenditures. Woytinsky is convinced that the economy will continue to expand in 1954, and he will find a theory to support that point of view, even if he has to alter or repudiate his earlier theories.<br>
</p>
<p class="fst">MEANWHILE, THE EISENHOWER ADMINISTRATION is displaying signs of worry about the economic outlook. Some months ago, apparently fearful that official indexes would be too slow in heralding a downswing, it was announced that economic “watchdogs” were being appointed in various areas. Apparently, certain officials in large corporations, and perhaps even in trade unions, were to be deputized with titles which gave them the responsibility of notifying Washington immediately upon learning that a factory planned to curtail or cease production, or that overtime was being reduced. What, if anything, has been done to implement this rather novel idea is not known to us, but the new line of the Administration is presumably authoritatively revealed in a front-page article in the <strong>New York Times</strong> of December 21, 1953. Under the headline, <em>U.S. Acting to Meet Any Slide in Business</em>, Washington reporter Joseph A. Loftus writes:</p>
<p class="quoteb">The Administration is facing up to the possibility of a 1954 slide in business and employment. At the same time, Administration sources express confidence that the outlook now is good.</p>
<p class="quote">A realistic view of economic conditions, and some of the available remedies, if any are needed, will be discussed in the annual report of the Council of Economic Advisers and in the President’s Economic Message to Congress next month.</p>
<p class="quote">While these reports are expected to deal candidly with the situation, they are not expected to blueprint anti-recession plans. <em>The reason no firm, plans can be laid, according to informed official opinion, is that nobody can say in advance what the economic ailment, if any, will be, and therefore none of the economic doctors can prescribe a specific medicine. </em>[Sic!]</p>
<p class="quote">Rather, a line of thinking will be offered, and the standbys that are available, <em>or should be made available,</em> to counter a recession will be discussed.</p>
<p class="quote">Stimulation of private capital will be accented, it is understood. One form of business encouragement would be the enactment of lease-purchase legislation under which local money would be used to build needed Federal buildings throughout the country. The Federal Government would pay for the buildings in rent over fifteen to twenty-five year periods and become the eventual owner.</p>
<p class="quote">A $15,000,000,000 Federal public works list, <em>some</em> of it blueprinted, also is available as a business stimulant, if necessary.</p>
<p class="quote">Another great source of potential economic activity is state and local works programs. Many state and local projects have been long deferred, although this type of construction has shown a substantial rise lately.</p>
<p class="quote">Consideration of anti-recession plans is dictated by prudence and a recognition that some business men, although perhaps a minority, and some of our Allies, are a bit jittery about business prospects.</p>
<p class="quote">Officials say there is evidence that the country is gong through an economic adjustment, possibly because of a reduction being made in business inventories, as in 1949.</p>
<p class="quote">None of the economic indicators shows a severe readjustment now, or foreshadows one in the coming year, <em>except as psychological behavior might make it so</em>, it is held. The factors militating against a serious slide in business are said to include these: Government spending will continue high ... spending for new plant and equipment in the first quarter of 1954 reveals a total almost as high as in the current quarter ... Employment and personal income are extraordinarily high; so are personal savings ...</p>
<p class="quote">Dr. Arthur F. Burns, chairman of the President’s Council of Economic Advisers, told the American Conference on Economic Security, Nov. 7, that the council already had gone ‘some distance’ in preparing recommendations to cushion an economic decline.</p>
<p class="quote">He said that the standbys under study included measures to ease home building and repairs, further changes in the tax program, revisions in the unemployment insurance system and, if necessary, large scale public works. (Italics mine – <em>T.N.V.</em>)</p>
<p class="fst">There then follows a list of construction projects that <em>could</em> be taken off the shelf. It is impossible, however, to escape the conclusion that the mountain has labored and brought forth a mouse. The “anti-recession” plans of the Eisenhower Administration are reminiscent of those of the Hoover Administration. They consist chiefly of issuing optimistic statements, reinforced by those of their big business partners, that everything is fine and will so remain in this best of all possible worlds.</p>
<p>As Stevenson put it in his December 12th speech:</p>
<p class="quoteb">“... I don’t know for certain whether we can talk our way into a business recession. But I do know that talk alone won’t prevent a depression or cure it either. The Republicans cleared up that question for us some twenty years ago.”<br>
</p>
<p class="fst">THE FEAR OF DEPRESSION IS REAL and tangible. It is not borne solely out of long memories or out of political malice. It has its roots in the softening that is clearly taking place throughout the major sectors of the economy. Expectations, especially those of business men, are grounded in such material things as current and future prospects for sales and profits. Psychological behavior cannot create a depression, although if it becomes evident that Washington is not prepared to do more than talk about “anti-recession plans,” existing deflationary forces will undoubtedly be strengthened.</p>
<p>The rather disconcerting economic outlook is producing a sharp conflict within Republican ranks. The business men seem to be primarily concerned with looting the public treasury and presumably are not averse to a mild recession and a few millions of unemployment. The politicians, on other hand, have to worry about getting re-elected and maintaining their rather tenuous hold on Congress. The latter group must press for increasing state intervention, even if that runs counter to announced Republican policy.</p>
<p>Just as Republican policy toward the farmers had to be radically reversed, with all major campaign pledges to eliminate price supports, etc., repudiated, we may well find that the politicians will prevail and the state will do its best to prevent unemployment from developing on the eve of an election. Eisenhower’s balanced budget could well go the way of its eminent predecessor, the Roosevelt balanced budget. Under such conditions, and with a major assist from the new rulers of the Kremlin, the basic economic and political motivations for the existence of the Permanent War Economy continue to operate. So long as the fear of Stalinism and war continue to dominate the political scene, the fear of depression cannot dominate the economic outlook, although it is a factor that politicians will ignore at their peril.</p>
<p class="fst">December 1953</p>
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T.N. Vance
Notes of the Month
Fear of Depression in the U.S.
(December 1953)
From The New International, Vol. XIX No. 6, November–December 1953, pp. 303–312.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
“DEPRESSION IS A REAL FEAR for many of us. It has already touched the farmers. It may touch others in the months ahead.” Thus spoke Adlai E. Stevenson, leader of the “loyal opposition,” in his Philadelphia speech of December 12th. The atmosphere of anxiety appears to reach far beyond the farmers, extending from Main Street to Wall Street. Most people, including those in government, are worried about the economic outlook.
That there is some basis for these fears can be seen in the most recent report of the President’s Council of Economic Advisers. The report for December receives the headline in the New York Times of December 15th, November Business Activity Shows First Dip From 1952. Factory output and earnings were off. The average work-week dipped below forty hours, with the 39.9-hour average being the lowest for any November in the last four years. While there were some favorable factors, unemployment increased by 266,000.
If one examines the basic national income data, as published by the Department of Commerce in the November issue of the Survey of Current Business, it becomes apparent that a mild recession started in the third quarter of 1953. Gross national product declined from a seasonally adjusted annual rate of $372.4 billion in the second quarter of 1953 to $369 billion in the third quarter. Since personal consumption expenditures and government purchases of goods and services increased, although almost imperceptibly, gross private domestic investment accounts for the decline. For all practical purposes, the entire story is told by the reduction in the change in business inventories from an annual rate of $8.8 billion in the second quarter to one of $4.5 billion in the third quarter.
In some quarters, it is fashionable to attribute the present recession to a mere “inventory adjustment” – presumably of no consequence. The November 1953 Survey of Current Business has this to say about the subject:
“The bulk of the advance in inventories since the strike-affected third quarter of last year has been in durable goods. Additions to durable goods inventories have reflected substantial replenishments that followed the widespread imbalances caused by the steel shortages as well as the subsequent buildup in many hard good lines, such as automobiles, which were carrying unusually low inventories in the earlier period of production controls. More recently, some backing up of stocks because of lower than expected sales also have been a contributing factor, affecting particularly third, quarter inventories in retail trade.” (Italics mine – T.N.V.)
This is a most curious attempt to evade facing reality – and in a publication that is hardly read by the general public. The statement regarding inventories of automobiles is sheer fiction, as retail sales of automobiles have been declining. It has been obvious for several months that production of automobiles has been exceeding sales. The increase in inventories has nothing to do with production restrictions that existed last year or the year before. Not only have retail sales in general been lower than expected, but they are currently running five to ten per cent under last year.
The decline in retail sales naturally begins to have an impact at the factory level. Factory sales of all motor vehicles, for example, reached a 1953 peak of 723,532 in April. After declines of eighty and sixty thousand vehicles in May and June, factory sales of motor vehicles still totalled 705,132 in July. In August, the figure was down to 615,382 and in September to 573,688. It is estimated that production of motor vehicles for 1953 may exceed retail sales by several hundred thousand units.
New orders are, of course, one of the most sensitive barometers of business conditions. In view of the softening throughout the economy, it is not surprising that net orders declined from a peak of $25.7 billion in April 1953 to $22.4 billion in September, the latest month available. This is a decline of twelve per cent, and must be regarded as significant in any appraisal of the economy.
Ninety per cent of the decline in recent months in new orders is to be found in the durable goods industries – total net new orders for all durable goods industries declining from $12.6 billion in April 1953 to $9.6 billion in September. Since the bulk of this decline occurs in transportation equipment, including motor vehicles and parts, the crisis in consumer durables, centering in the automobile industry, is evident.
At the same time, there has been some increase in the number of industrial and commercial failures, although not as yet of an alarming nature. More significant has been a pronounced decline in the number of new business incorporations. From a 1953 peak of 9,659 in March, the number of new incorporations throughout the country declined to 7,433 in September – a drop of almost 25 per cent. As the hucksters on Madison Avenue put it, “The economy has become more competitive.”
AN INTERESTING APPRAISAL of the economic outlook is contained in the New York Times of December 20th, in the column, The Merchant’s Point of View, by William M. Freeman:
The population is just over 160,000,000 and is continuing to go up. While the baby crop is dropping, there are more toddlers and more elderly persons, which means a heavier load on the more or less static middle group. The number of marriages is decreasing. Demand for new homes is easing, a dip that is accentuated by higher prices. Materials prices also are weaker, so that prices of homes and major appliances should turn downward in due course.
Sales of furniture, major appliances and a host of other items are closely linked to the housing trend. The television receiver, which increases living room usage, traffic, wear, destruction and replacement, is helping a bit in furniture volume, as is the continuing trend to outdoor living, sparked by the flight from the cities to a semi-suburban way of life.
Employment is dipping steadily, with business activity showing its first minus signs for the year in November. Some 1,428,000 persons were jobless in November, 2.3 per cent of the labor force; this was the sharpest rise recorded in the year.
All of these factors add up to a downward readjustment, now accelerating. with industrial production off 6 per cent from the peak in March. The Federal Reserve Board’s index stood at the close of November at 228, based on the 1935–39 average taken as 100, against the March figure of 243.
Inventories are heavy in most lines. Retail sales are trailing 1952 volume, but the year as a whole, with attractive prices on desired items rather than on ‘lemons,’ aided by special promotions backed by heavy advertising, should finish between 1 and 2 per cent ahead of last year ...
In a word, there is a marked softening evident throughout most of the economy. In almost every market, supply now exceeds demand. The term, “buyers’ market,” is used more and more frequently, and is an apt description of the situation in the economy as a whole. While there is reason to fear depression, there is no reason for panic to prevail. Many new products, and improvements in old products, are being put on the market. Business volume is still at a very high level. Freeman concludes his column, quoted above, as follows:
It is factors such as this, the product of the engineer, the artist, the production man and the planner, that distort computations. There is no question of a readjustment coming up, aside from anything we scare ourselves into, as a result of the rapid post-Korea expansion and the existence of surpluses in many lines that must be worked off before production rates can be resumed.
The outlook, therefore, is for sharply intensified competition, with a marked increase in competitive selling in every aspect of the economy. But, and here’s something that’s been ignored: The slide-off, in the works since mid-year, is from record levels. It seems very likely, therefore, that the year ahead will come close to the 1952 figure, which was very near the record. And the country’s inventive genius can effect this outlook only one way – upward.
Ignoring the propaganda content in the phrase, “inventive genius,” there has been as we pointed out in The Permanent War Economy Under Eisenhower (cf. March–April 1953 issue of The New International, p. 97) an enormous amount of capital accumulation since the end of World War II. Productive capacity, therefore, is still increasing at a goodly rate and there is, as yet, no sign of any significant downturn in the accumulation of capital, as can be seen from the following tabulation covering the last seven quarters.
NET PRIVATE CAPITAL FORMATION, 1952–1953, by Quarters
(Billions of Dollars, Seasonally Adjusted at Annual Rates)
Year and
Quarter
Gross
Investment
Capital
Consumption
Allowances
Net
Investment
1952, I Quarter
$50.4
$25.7
$24.7
1952, II Quarter
49.6
26.9
22.7
1952, III Quarter
52.3
27.0
25.3
1952, IV Quarter
57.9
28.2
29.7
1953, I Quarter
54.0
28.2
25.8
1953, II Quarter
61.0
29.2
31.8
1953, III Quarter
56.5
29.6
26.9
Source: Survey of Current Business, November 1953.
It is true that the second quarter of 1953 represents the peak in capital accumulation, both gross and net. It is much too early, however, to draw conclusions as to whether the downturn in the third quarter will turn out to be mainly an inventory adjustment, or whether it presages a characteristic decline in the traditional cycle of capital accumulation. At the moment, of course, the figures for gross private investment in producers’ durable equipment (new plant and equipment) do not show any recession characteristics. At seasonally adjusted annual rates, the estimates for producers’ durable equipment for the last seven quarters are:
Year and
Quarter
Billions
Dollars
1952, I Quarter
$25.6
1952, II Quarter
25.6
1952, III Quarter
24.9
1952, IV Quarter
25.5
1953, I Quarter
26.2
1953, II Quarter
26.9
1953, III Quarter
27.1
Obviously, a sizable portion of the gross investment in plant and equipment represents a net increase in productive capacity. Contained in these figures are the seeds of a typical capitalist crisis of overproduction. But the seeds have not yet germinated. For the time being, the accumulation of real capital keeps pace with the increase in total output. Any drastic curtailment in capital formation would herald the approach of deep-seated capitalist crisis. Under the Permanent War Economy, however, such a development is virtually excluded.
And yet, the signs of atrophy, alluded to in The Permanent War Economy Under Eisenhower, multiply. The investment figures cited above are not without interest. They show that capital is apparently being consumed at a faster rate than gross investment increases. Consequently, the increase in net investment is not keeping pace with the increase in gross investment. What seems to be happening is that the increasingly high organic composition of capital results in a larger proportion of output going toward the replacement of constant capital. As we pointed out in the original series of articles, such a trend must necessarily have an adverse impact on the rate of surplus value, and therefore ultimately on the rate of profit. All the evidence points to a reduced rate of profit in 1954. From this, it does not follow, however, that a capitalist crisis is at hand.
Parenthetically, it should be observed that as the figures for capital consumption allowances rise, the use of gross national product data is fraught with increasing danger and a larger margin of error. Increasing rates of depreciation and obsolescence may well be symptomatic of rising rates of productivity. They can also give rise to new types of capitalist contradictions and new problems which capitalist state intervention, far from solving, actually accentuates. When estimates of capital consumption reach eight per cent of gross output, as they currently do, it is no longer a problem solely for accountants. Such figures have an economic and political impact. Once five-year amortization of “defense” plants and the excess profits tax are eliminated, it remains to be seen whether “normal” capitalist incentives will be sufficient to maintain the required high rate of investment that a high level equilibrium in the economy apparently requires.
Again, it is too early to tell, but the fact remains that between the second and third quarter of 1953 personal savings, as estimated by the Department of Commerce, increased from an annual rate of $17.2 billion to an annual rate of $18.8 billion. An increase of nine per cent in the amount of personal savings would appear to be a very sizable figure, but in view of the dubious residual method by which Commerce derives these estimates too much importance should not be attached to this change. Much larger quarterly changes have been recorded in the recent past, without any undue economic significance. But it is possible that the apparent increase in the amount of personal savings could reflect growing caution on the part of the average consumer as the fear of depression grows.
The major factor in tempering any unduly pessimistic forecast of the economic outlook necessarily remains the size, composition and trend of war outlays. In analyzing these data, it will be helpful to have the quarterly figures as presented in the following tabulation.
WAR OUTLAYS, 1952–1953, by Quarters
AND THEIR RELATIONSHIP TO TOTAL OUTPUT
(Dollar Figures in Billions, Seasonally Adjusted at Annual Rates)
Year and
Quarter
Net
National
Product
(1)
WAR OUTLAYS
Col. (4)
as % of
Col. (1)
(5)
Direct
(2)
Indirect
(3)
Total
(4)
1952, I Quarter
$314.7
$43.9
$8.8
$52.7
16.7%
1952, II Quarter
316.4
47.1
9.3
56.4
17.8
1952, III Quarter
319.7
46.4
9.2
55.6
17.4
1952, IV Quarter
331.3
48.6
8.0
56.6
17.1
1953, I Quarter
336.9
49.4
8.6
58.0
17.2
1953, II Quarter
341.5
51.3
9.0
60.3
17.7
1953, III Quarter
339.0
50.4
7.9
58.3
17.2
The net national product figures are derived from Commerce estimates of gross national product and national income. The concepts of war outlays, direct and indirect, remain as heretofore, with the derivation of the figures following the explanation on pages 94–95 of the March–April 1953 issue of The New International. The margin of error in these quarterly estimates cannot be significantly greater than in the annual figures presented in prior articles.
The ratio of war outlays to total output, the prime mover in this period of capitalism, has reached a fairly even plateau. During the entire period under review, the extreme variation is to be found between the 16,7 per cent of the first quarter of 1952 and the 17.8 per cent of the second quarter of the same year. This represents a variation of but six per cent at the peak, which is well within the margin of error in the underlying data. A war outlays ratio of 17 per cent is significant, but as it continues at the same level over a period of months, and then of years, it begins to lose some of its impact. The same ratio can no longer sustain the same high level of employment, production and profits.
Of course, changes of one-half of one per cent in the ratio, in either direction, may well have a noticeable impact on the equilibrium level, but in their totality such changes are more than offset by the atrophy that begins to set in. The weakening of the impact of war outlays tends to create all sorts of illusions. At one extreme is the notion that war outlays never had anything to do with the high level of activity; hence, it makes little difference if they do decline in the future, as there will be many offsets and “prosperity” will continue. At the other extreme is the fear that the bottom will drop out of the economy, as if Washington had a completely free hand in determining the level and ratio of war outlays; this point of view, of course, fails to realize that American imperialism had and still has valid political, as well as economic, motives for the adoption of the Permanent War Economy.
What has happened, of course, aside from the stretch-out in the “Defense” program begun under Truman, and the truce in the Korean war, is that direct war outlays have kept pace with, and been responsible in large measure for, the rise in total output. Indirect war outlays, however, have leveled off and now tend to decline. The reduction in foreign economic aid, a notable difference in Republican policy as contrasted with that of the Democrats, is chiefly responsible for the falling off in indirect war outlays. If, on top of this, direct war outlays are reduced by $5 billion, as the Republicans now threaten, the consequences could be serious. How much the Eisenhower Administration will reduce direct war outlays, remains to be seen.
They may find that it is easier to eliminate agricultural price supports and such “un-American” controls than to reduce the manpower of the armed forces and to convince the American bourgeoisie as a whole that military reliance can be placed on atomic weapons to achieve the necessary degree of safety, as well as to provide the necessary implementation for foreign policy. To be sure, if the plan is to abandon Western Europe to Stalinism, then temporarily a sharp reduction in direct military outlays may be achieved. Granted that the bulk of isolationist tendencies are concentrated within Republican ranks, it is still inconceivable that the Eisenhower Administration is planning to abandon Europe to the tender mercies of Stalinist imperialism. Without such a major change in policy, or the working out of a basic agreement with Stalinist imperialism, the political basis for any sharp reduction in war outlays remains absent. And as long as war outlays remain at 17 per cent of total output, there cannot be a serious depression.
ONE OF THE OUTSTANDING EXPONENTS of the view that war outlays have had nothing to do with sustaining a high level of economic activity is W. Woytinsky. Writing in the New Leader of December 7, 1953, Woytinsky states:
“My forecast here is based on the belief that the prosperity enjoyed by this country in recent years has not been a Korean War prosperity. It has been rather a period of healthy growth of a vigorous and dynamic economic system, with the benefits of growth widely though unevenly distributed among broad groups of the population.”
To label the post-World War II expansion of American capitalism “a period of healthy growth” betrays a singularly acute lack of understanding of the world in which we live.
The main prop in Woytinsky’s unique approach to the economic outlook is contained in a paragraph from his prognosis of a year ago (cf. the New Leader, December 8, 1952):
“The liquidation of the defense program would mean reorientation of economic activities and a brief spell of hesitation, but by no means a contraction in the total volume of employment and production. The problem will be of the same nature as the demobilization after World War II, but on a much smaller scale. The last demobilization – in the sense of complete reorientation of our economy and readjustment of men released from the armed forces – took two years, and at no time did unemployment rise to 3 million in the period of readjustment.
The liquidation of the present defense and rearmament program would take much less time and cause much less frictional unemployment.” (Italics mine – T.N.V.)
Of course, there will be no liquidation of the defense program, although some slight reduction in the magnitude of war outlays is not excluded. The adjustment problem, however, in the event of a reduction in war outlays is not only not the same. It is entirely different. At the end of World War II, the ratio of war outlays to total output exceeded 40 per cent. A swift decline took place to the ten per cent level, but the reduction in the production of means of production and consumption during the war meant that there was room for increase in these traditional goals of economic output once the sharp decline began in the production of means of destruction. Hence, there could be no serious depression immediately following the end of World War II. It is obvious that the present situation differs markedly from that which prevailed eight years ago. The current increase (from 1950–1953) in the output of means of destruction has not only riot been accompanied by a decrease in the output of means of production and means of consumption, but has actually witnessed an increase in the production of both capital and consumers’ goods.
Woytinsky possesses a remarkably simplistic and mechanical view of the economy, where a drop in one sector must be offset by increases in other sectors. In his 1952 article, quoted above, he asserts:
“Whatever goes to the military sector is taken from civilian consumption and capital formation. Whatever is released from the military sector returns to the civilian.”
Here we have a modern version of Adam Smith’s “unseen hand” that automatically takes care of the economy and all supporters of capitalism, but somehow fails to eliminate the “unemployment” sector.
An effective reply to Woytinsky was given by Seymour E. Harris in the New Leader of December 22, 1952, when he wrote:
“I find serious gaps in Dr. Woytinsky’s crystal-gazing. He says not a word about the tremendous investment since 1945. Our capital plant has expanded by 50–60 per cent (in real terms) since 1945. These gains are far beyond what prevailed in the inflationary Twenties. Yet Dr. Woytinsky writes as though, when the Government cuts its spending on armament by 20 billion dollars or so, part of the slack will be taken up by business. A more realistic view would be that the decline of Government spending would aggravate a decline in investment.”
Harris has put his finger on one of the central problems when he focuses on investment. He would also appear to be more realistic than Woytinsky in appraising the possibilities of government investments as offsets to declining war outlays. He states:
“It is this failure to suggest the alternatives that leaves me cool to Dr. Woytinsky’s astrology. His assumption of gains in investment seems unrealistic. His suggestion that Government will substitute investments of various kinds for military outlays also is unsupportable. A Democratic regime, supported by an ideology favorable to deficit financing, was not prepared after twenty years of rule to present a catalogue of investment adequate to do this job; and even if it had, it was confronted with strong opposition. Does Dr. Woytinsky mean to imply that the Republican Administration will be more disposed to plan for Government intervention when military expenditures fall and thus to fill the gap? It is possible, but certainly not likely.”
After pointing out that tax reduction is the more likely response to a cut in military outlays, and that tax reduction can have only a limited stimulus on demand. Harris concludes his refutation of Woytinsky:
“In summary, the signs point to a business recession in 1953 or 1954 – unless the war is extended. Dr. Woytinsky does not seem concerned over the possibility of adequate demand even if the whole military program is scrapped. He seems to believe that tax reduction and pent-up demand (compared by Dr. Woytinsky with the 1946 situation, and wrongly so) will solve our problem.”
Woytinsky returns to the economic hustings in his Economic Forecast for 1954, the title of his current article, quoted above, with a modification of his “changing sector” theory of the previous year. This might be called the “excess fat” theory, for he states:
“Our economy has accumulated such an amount of fat and muscle that it is hard to visualize its temporary contraction to a level that would spell out a ‘mild recession’ such as contemplated a year ago. This is said even while giving full weight to at least four problems which have often been mentioned as presaging a downturn. These are the position of the farmer, possible cuts in defense expenditures, a new economic philosophy in Washington, and possible reorientation of foreign-trade policy.”
Apparently, Woytinsky is not up on the latest dietary theories, for the “excess fat” represents as much of a danger as it does a cushion. Moreover, the extra weight would seem to consist mainly of “fat” rather than of “muscle.” Unemployment caused by declines in production from peak levels is just as real to those who are placed in the category of surplus labor as unemployment that develops from a lower production base. An increase of unemployment from one million to five million may not be as catastrophic in its impact as an increase from five million to nine million, but it is still serious and would certainly constitute at least a “mild” recession.
“The cut in defense expenditures as a source of contraction of purchasing power is, to a large extent,” according to Woytinsky, “a bogey man in the modern folklore of business forecasting. The cut of $5 billion in the requested appropriation does not imply that Government purchases in 1954 will be substantially reduced in comparison with 1953. The real volume of purchases will depend partly on changes in prices, partly on political developments which may call for new appropriations. As things look now, total Government expenditures may decline by $2 billion or $3 billion or increase by a similar or larger amount.”
In other words, Woytinsky is not especially concerned with a projected cut in war outlays – not because “prosperity is independent of the level of war outlays” as was his position a year ago, but because there won’t be a real cut in 1954. Besides, if there is a real cut, there is plenty of fat, so it won’t be serious. And, if the “excess fat” theory doesn’t work, then there may be “political developments which may call for new appropriations.” If war expenditures are not present in sufficient volume to prevent a recession, then there will be other types of government expenditures. Woytinsky is convinced that the economy will continue to expand in 1954, and he will find a theory to support that point of view, even if he has to alter or repudiate his earlier theories.
MEANWHILE, THE EISENHOWER ADMINISTRATION is displaying signs of worry about the economic outlook. Some months ago, apparently fearful that official indexes would be too slow in heralding a downswing, it was announced that economic “watchdogs” were being appointed in various areas. Apparently, certain officials in large corporations, and perhaps even in trade unions, were to be deputized with titles which gave them the responsibility of notifying Washington immediately upon learning that a factory planned to curtail or cease production, or that overtime was being reduced. What, if anything, has been done to implement this rather novel idea is not known to us, but the new line of the Administration is presumably authoritatively revealed in a front-page article in the New York Times of December 21, 1953. Under the headline, U.S. Acting to Meet Any Slide in Business, Washington reporter Joseph A. Loftus writes:
The Administration is facing up to the possibility of a 1954 slide in business and employment. At the same time, Administration sources express confidence that the outlook now is good.
A realistic view of economic conditions, and some of the available remedies, if any are needed, will be discussed in the annual report of the Council of Economic Advisers and in the President’s Economic Message to Congress next month.
While these reports are expected to deal candidly with the situation, they are not expected to blueprint anti-recession plans. The reason no firm, plans can be laid, according to informed official opinion, is that nobody can say in advance what the economic ailment, if any, will be, and therefore none of the economic doctors can prescribe a specific medicine. [Sic!]
Rather, a line of thinking will be offered, and the standbys that are available, or should be made available, to counter a recession will be discussed.
Stimulation of private capital will be accented, it is understood. One form of business encouragement would be the enactment of lease-purchase legislation under which local money would be used to build needed Federal buildings throughout the country. The Federal Government would pay for the buildings in rent over fifteen to twenty-five year periods and become the eventual owner.
A $15,000,000,000 Federal public works list, some of it blueprinted, also is available as a business stimulant, if necessary.
Another great source of potential economic activity is state and local works programs. Many state and local projects have been long deferred, although this type of construction has shown a substantial rise lately.
Consideration of anti-recession plans is dictated by prudence and a recognition that some business men, although perhaps a minority, and some of our Allies, are a bit jittery about business prospects.
Officials say there is evidence that the country is gong through an economic adjustment, possibly because of a reduction being made in business inventories, as in 1949.
None of the economic indicators shows a severe readjustment now, or foreshadows one in the coming year, except as psychological behavior might make it so, it is held. The factors militating against a serious slide in business are said to include these: Government spending will continue high ... spending for new plant and equipment in the first quarter of 1954 reveals a total almost as high as in the current quarter ... Employment and personal income are extraordinarily high; so are personal savings ...
Dr. Arthur F. Burns, chairman of the President’s Council of Economic Advisers, told the American Conference on Economic Security, Nov. 7, that the council already had gone ‘some distance’ in preparing recommendations to cushion an economic decline.
He said that the standbys under study included measures to ease home building and repairs, further changes in the tax program, revisions in the unemployment insurance system and, if necessary, large scale public works. (Italics mine – T.N.V.)
There then follows a list of construction projects that could be taken off the shelf. It is impossible, however, to escape the conclusion that the mountain has labored and brought forth a mouse. The “anti-recession” plans of the Eisenhower Administration are reminiscent of those of the Hoover Administration. They consist chiefly of issuing optimistic statements, reinforced by those of their big business partners, that everything is fine and will so remain in this best of all possible worlds.
As Stevenson put it in his December 12th speech:
“... I don’t know for certain whether we can talk our way into a business recession. But I do know that talk alone won’t prevent a depression or cure it either. The Republicans cleared up that question for us some twenty years ago.”
THE FEAR OF DEPRESSION IS REAL and tangible. It is not borne solely out of long memories or out of political malice. It has its roots in the softening that is clearly taking place throughout the major sectors of the economy. Expectations, especially those of business men, are grounded in such material things as current and future prospects for sales and profits. Psychological behavior cannot create a depression, although if it becomes evident that Washington is not prepared to do more than talk about “anti-recession plans,” existing deflationary forces will undoubtedly be strengthened.
The rather disconcerting economic outlook is producing a sharp conflict within Republican ranks. The business men seem to be primarily concerned with looting the public treasury and presumably are not averse to a mild recession and a few millions of unemployment. The politicians, on other hand, have to worry about getting re-elected and maintaining their rather tenuous hold on Congress. The latter group must press for increasing state intervention, even if that runs counter to announced Republican policy.
Just as Republican policy toward the farmers had to be radically reversed, with all major campaign pledges to eliminate price supports, etc., repudiated, we may well find that the politicians will prevail and the state will do its best to prevent unemployment from developing on the eve of an election. Eisenhower’s balanced budget could well go the way of its eminent predecessor, the Roosevelt balanced budget. Under such conditions, and with a major assist from the new rulers of the Kremlin, the basic economic and political motivations for the existence of the Permanent War Economy continue to operate. So long as the fear of Stalinism and war continue to dominate the political scene, the fear of depression cannot dominate the economic outlook, although it is a factor that politicians will ignore at their peril.
December 1953
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<p class="title">Ernst Mach (1886, revised to 1905)</p>
<p><img src="../../../../../glossary/people/m/pics/mach.jpg" vspace="6" hspace="6" align="LEFT" border="3" alt="rugged guy with beard"></p>
<h4>The Analysis of Sensations<br>
<span class="term">and the Relation of the Physical to the Psychical</span></h4>
<hr class="end">
<p class="information">
<span class="info">Source:</span> <em>The Analysis of Sensations</em> (1897). Dover Edition, 1959;<br> <span class="info">Translation:</span> by C M Williams and Sydney Waterlow;<br>
First Chapter reproduced here.</p>
<hr class="end">
<h3>I. INTRODUCTORY REMARKS:<br>
ANTI METAPHYSICAL.</h3>
<h5>1.</h5>
<p class="fst">
THE great results achieved by physical science in modern times
- results not restricted to its own sphere but embracing that
of other sciences which employ its help - have brought it about
that physical ways of thinking and physical modes of procedure
enjoy on all hands unwonted prominence, and that the greatest
expectations are associated with their application. In keeping
with this drift of modern inquiry, the physiology of the senses,
gradually abandoning the method of investigating sensations in
themselves followed by men like Goethe, Schopenhauer, and others,
but with greatest success by Johannes Muller, has also assumed
an almost exclusively physical character. This tendency must appear
to us as not altogether appropriate, when we reflect that physics,
despite its considerable development, nevertheless constitutes
but a portion of a <em>larger</em> collective body of knowledge,
and that it is unable, with its limited intellectual implements,
created for limited and special purposes, to exhaust all the subject-matter
in question. Without renouncing the support of physics, it is
possible for the physiology of the senses, not only to pursue
its own course of development, but also to afford to physical
science itself powerful assistance. The following simple considerations
will serve to illustrate this relation between the two.</p>
<h5>2.</h5>
<p class="fst">
Colours, sounds, temperatures, pressures, spaces, times, and so
forth, are connected with one another in manifold ways; and with
them are associated dispositions of mind, feelings, and volitions.
Out of this fabric, that which is relatively more fixed and permanent
stands prominently forth, engraves itself on the memory, and expresses
itself in language. Relatively greater permanency is exhibited,
first, by certain complexes of colours, sounds, pressures, and
so forth, functionally connected in time and space, which therefore
receive special names, and are called bodies. Absolutely permanent
such complexes are not.</p>
<p>
My table is now brightly, now dimly lighted. Its temperature varies.
It may receive an ink stain. One of its legs may be broken. It
may be repaired, polished, and replaced part by part. But, for
me, it remains the table at which I daily write.</p>
<p>
My friend may put on a different coat. His countenance may assume
a serious or a cheerful expression. His complexion, under the
effects of light or emotion, may change. His shape may be altered
by motion, or be definitely changed. Yet the number of the permanent
features presented, compared with the number of the gradual alterations,
is always so great, that the latter may be overlooked. It is the
same friend with whom I take my daily walk.</p>
<p>
My coat may receive a stain, a tear. My very manner of expressing
this shows that we are concerned here with a sum-total of permanency,
to which the new element is added and from which that which is
lacking is subsequently taken away.</p>
<p>
Our greater intimacy with this sum-total of permanency, and the
preponderance of its importance for me as contrasted with the
changeable element, impel us to the partly instinctive, partly
voluntary and conscious economy of mental presentation and designation,
as expressed in ordinary thought and speech. That which is presented
in a single image receives a single designation, a single name.</p>
<p>
Further, that complex of memories, moods, and feelings, joined
to a particular body (the human body), which is called the
"I" or "Ego," manifests itself as relatively permanent.
I may be engaged upon this or that subject, I may be quiet and
cheerful, excited and ill-humoured. Yet, pathological cases
apart, enough durable features remain to identify the ego. Of
course, the ego also is only of relative permanency.</p>
<p>
The apparent permanency of the ego consists chiefly in the single
fact of its continuity, in the slowness of its changes. The many
thoughts and plans of yesterday that are continued today, and
of which our environment in waking hours incessantly reminds us
(whence in dreams the ego can be very indistinct, doubled, or
entirely wanting), and the little habits that are unconsciously
and involuntarily kept up for long periods of time, constitute
the groundwork of the ego. There can hardly be greater differences
in the egos of different people, than occur in the course of years
in one person. When I recall today my early youth, I should take
the boy that I then was, with the exception of a few individual
features, for a different person, were it not for the existence
of the chain of memories. Many an article that I myself penned
twenty years ago impresses me now as something quite foreign to
myself. The very gradual character of the changes of the body
also contributes to the stability of the ego, but in a much less
degree than people imagine. Such things are much less analysed
and noticed than the intellectual and the moral ego. Personally,
people know themselves very poorly. When I wrote these lines in
1886, Ribot's admirable little book, <em>The Diseases of Personality</em>
(second edition, Paris, 1888, Chicago, 1895), was unknown to me.
Ribot ascribes the principal role in preserving the continuity
of the ego to the general sensibility. Generally, I am in perfect
accord with his views.</p>
<p>
The ego is as little absolutely permanent as are bodies. That
which we so much dread in death, the annihilation of our permanency,
actually occurs in life in abundant measure. That which is most
valued by us, remains preserved in countless copies, or, in cases
of exceptional excellence, is even preserved of itself. In the
best human being, however, there are individual traits, the loss
of which neither he himself nor others need regret. Indeed, at
times, death, viewed as a liberation from individuality, may even
become a pleasant thought. Such reflections of course do not make
physiological death any the easier to bear.</p>
<p>
After a first survey has been obtained, by the formation of the
substance-concepts " body " and " ego " (matter
and soul), the will is impelled to a more exact examination of
the changes that take place in these relatively permanent existences.
The element of change in bodies and the ego, is in fact, exactly
what moves the will I to this examination. Here the component
parts of the complex are first exhibited as its properties. A
fruit is sweet; but it can also be bitter. Also, other fruits
may be sweet. The red colour we are seeking is found in many bodies.
The neighbourhood of some bodies is pleasant; that of others,
unpleasant. Thus, gradually, different complexes are found to
be made up of common elements. The visible, the audible, the tangible,
are separated from bodies. The visible is analysed into colours
and into form. In the manifoldness of the colours, again, though
here fewer in number, other component parts are discerned - such
as the primary colours, and so forth. The complexes are disintegrated
into elements, that is to say, into their ultimate component parts,
which hitherto we have been unable to subdivide any further. The
nature of these elements need not be discussed at present; it
is possible that future investigations may throw light on it.
We need not here be disturbed by the fact that it is easier for
the scientist to study relations of relations of these elements
than the direct relations between them.</p>
<h5>3.</h5>
<p class="fst">
The useful habit of designating such relatively permanent compounds
by single names, and of apprehending them by single thoughts,
without going to the trouble each time of an analysis of their
component parts, is apt to come into strange conflict with the
tendency to isolate the component parts. The vague image which
we have of a given permanent complex, being an image which does
not perceptibly change when one or another of the component parts
is taken away, seems to be something which exists in itself. Inasmuch
as it is possible to take away singly every constituent part without
destroying the capacity of the image to stand for the totality
and to be recognised again, it is imagined that it is possible
to subtract<em> all</em> the parts and to have something still remaining.
Thus naturally arises the philosophical notion, at first impressive,
but subsequently recognised as monstrous, of a " thing-in-itself,"
different from its "appearance," and unknowable.</p>
<p>
Thing, body, matter, are nothing apart from the combinations of
the elements, - the colours, sounds, and so forth - nothing apart
from their so-called attributes. That protean pseudo-philosophical
problem of the single thing with its many attributes, arises wholly
from a misinterpretation of the fact, that summary comprehension
and precise analysis, although both are provisionally justifiable
and for many purposes profitable, cannot be carried on simultaneously.
A body is one and unchangeable only so long as it is unnecessary
to consider its details. Thus both the earth and a billiard-ball
are spheres, if we are willing to neglect all deviations from
the spherical form, and if greater precision is not necessary.
But when we are obliged to carry on investigations in orography
or microscopy, both bodies cease to be spheres.</p>
<h5>4.</h5>
<p class="fst">
Man is pre-eminently endowed with the power of voluntarily and
consciously determining his own point of view. He can at one time
disregard the most salient features of an object, and immediately
thereafter give attention to its smallest details; now consider
a stationary current, without a thought of its contents (whether
heat, electricity or fluidity), and then measure the width of
a Fraunhofer line in the spectrum; he can rise at will to the
most general abstractions or bury himself in the minutest particulars.
Animals possess this capacity in a far less degree. They do not
assume a point of view, but are usually forced to it by their
sense-impressions. The baby that does not know its father with
his hat on, the dog that is perplexed at the new coat of its master,
have both succumbed in this conflict of points of view. Who has
not been worsted in similar plights ? Even the man of philosophy
at times succumbs, as the grotesque problem, above referred to,
shows.</p>
<p>
In this last case, the circumstances appear to furnish a real
ground of justification. Colours, sounds, and the odours of bodies
are evanescent. But their tangibility, as a sort of constant nucleus,
not readily susceptible of annihilation, remains behind; appearing
as the vehicle of the more fugitive properties attached to it.
Habit, thus, keeps our thought firmly attached to this central
nucleus, even when we have begun to recognise that seeing hearing,
smelling, and touching are intimately akin in character. A further
consideration is, that owing to the singularly extensive development
of mechanical physics a kind of higher reality is ascribed to
the spatial and to the temporal than to colours, sounds, and odours;
agreeably to which, the temporal and spatial links of colours,
sounds, and odours appear to be more real than the colours, sounds
and odours themselves. The physiology of the senses, however,
demonstrates, that spaces and times may just as appropriately
be called sensations as colours and sounds. But of this later.</p>
<h5>5.</h5>
<p class="fst">
Not only the relation of bodies to the ego, but the ego itself
also, gives rise to similar pseudo - problems, the character of
which may be briefly indicated as follows:</p>
<p>
Let us denote the above-mentioned elements by the letters A B
C . . ., X L M . . ., a, b, c . . . Let those complexes of colours,
sounds, and so forth, commonly called bodies, be denoted, for
the sake of clearness, by A B C . .; the complex, known as our
own body, which is a part of the former complexes distinguished
by certain peculiarities, may be called K L M . . .; the complex
composed of volitions, memory-images, and the rest, we shall represent
by a b c . . . Usually, now, the complex a , c . . . K L M. .
., as making up the ego, is opposed to the complex A B C . . .,
as making up the world of physical objects; sometimes also, a
b c . . . is viewed as ego, and K L M . . . A B C . . . as world
of physical objects. Now, at first blush, A B C . . . appears
independent of the ego, and opposed to it as a separate existence.
But this independence is only relative, and gives way upon closer
inspection. Much, it is true, may change in the complex a b c
. . . without much perceptible change being induced in A B C .
. .; and <em>vice versa</em>. But many changes in a b c . . . do
pass, by way of changes in K L M . . ., to A B C . . .; and <em>vice
versa</em>. (As, for example, when powerful ideas burst forth into
acts, or when our environment induces noticeable changes in our
body.) At the same time the group K L M . . . appears to be more
intimately connected with a b c . . . and with A B C . . ., than
the latter with one another; and their relations find their expression
in common thought and speech.</p>
<p>
Precisely viewed, however, it appears that the group A B C . .
. is always codetermined by K L M. A cube when seen close at hand,
looks large; when seen at a distance, small; its appearance to
the right eye differs from its appearance to the left; sometimes
it appears double; with closed eyes it is invisible. The properties
of one and the same body, therefore, appear modified by our own
body; they appear conditioned by it. But where, now, is that <em>same</em>
body, which appears so <em>different</em>? All that can be said
is, that with different K L M different A B C . . . are associated.</p>
<p>
A common and popular way of thinking and speaking is to contrast
" appearance " with " reality." A pencil held
in front of us in the air is seen by us as straight; dip it into
the water, and we see it crooked. In the latter case we say that
the pencil <em>appears</em> crooked, but is in <em>reality</em> straight.
But what justifies us in declaring one fact rather than another
to be the reality, and degrading the other to the level of appearance
? In both cases we have to do with facts which present us with
different combinations of the elements, combinations which in
the two cases are differently conditioned. Precisely because of
its environment the pencil dipped in water is optically crooked;
but it is tactually and metrically straight. An image in a concave
or flat mirror is <em>only</em> visible, whereas under other and
ordinary circumstances a tangible body as well corresponds to
the visible image. A bright surface is brighter beside a dark
surface than beside one brighter than itself. To be sure, our
expectation is deceived when, not paying sufficient attention
to the conditions, and substituting for one another different
cases of the combination, we fall into the natural error of expecting
what we are accustomed to, although the case may be an unusual
one. The facts are not to blame for that. In these cases, to speak
of " appearance " may have a practical meaning, but
cannot have a scientific meaning. Similarly, the question which
is often asked, whether the world is real or whether we merely
dream it, is devoid of all scientific meaning. Even the wildest
dream is a fact as much as any other. If our dreams were more
regular, more connected, more stable, they would also have more
practical importance for us. In our waking hours the relations
of the elements to one another are immensely amplified in comparison
with what they were in our dreams. We recognise the dream for
what it is. When the process is reversed, the field of psychic
vision is narrowed; the contrast is almost entirely lacking. Where
there is no contrast, the distinction between dream and waking,
between appearance and reality, is quite otiose and worthless.</p>
<p>
The popular notion of an antithesis between appearance and reality
has exercised a very powerful influence on scientific and philosophical
thought. We see this, for example, in Plato's pregnant and poetical
fiction of the Cave, in which, with our backs turned towards the
fire, we observe merely the shadows of what passes (<em>Republic</em>,
vii. 1). But this conception was not thought out to its final
consequences, with the result that it has had an unfortunate influence
on our ideas about the universe. The universe, of which nevertheless
we are a part, became completely separated from us, and was removed
an infinite distance away. Similarly, many a young man, hearing
for the first time of the refraction of stellar light, has thought
that doubt was cast on the whole of astronomy, whereas nothing
is required but an easily effected and unimportant correction
to put everything right again.</p>
<h5>6.</h5>
<p class="fst">
We see an object having a point S. If we touch S, that is, bring
it into connexion with our body, we receive a prick. We can see
S, without feeling the prick. But as soon as we feel the prick
we find S on the skin. The visible point, therefore, is a permanent
nucleus, to which the prick is annexed, according to circumstances,
as something accidental. From the frequency of analogous occurrences
we ultimately accustom ourselves to regard all properties of bodies
as " effects " proceeding from permanent nuclei and
conveyed to the ego through the medium of the body; which effects
we call sensations. By this operation, however, these nuclei are
deprived of their entire sensory content, and converted into mere
mental symbols. The assertion, then, is correct that the world
consists only of our sensations. In which case we have knowledge
<em>only</em> of sensations, and the assumption of the nuclei referred
to, or of a reciprocal action between them, from which sensations
proceed, turns out to be quite idle and superfluous. Such a view
can only suit with a half-hearted realism or a half-hearted philosophical
criticism.</p>
<h5>7.</h5>
<p class="fst">
Ordinarily the complex a b c . . . K L M . . . is contrasted as
ego with the complex A B C . . . At first only those elements
of A B C ... that more strongly alter a b c .... as a prick, a
pain, are wont to be thought of as comprised in the ego. Afterwards,
however, through observations of the kind just referred to, it
appears that the right to annex A B C . . . to the ego nowhere
ceases. In conformity with this view the ego can be so extended
as ultimately to embrace the entire world. The ego is not sharply
marked off, its limits are very indefinite and arbitrarily displaceable
Only by failing to observe this fact, and by unconsciously narrowing
those limits, while at the same time we enlarge them, arise, in
the conflict of points of view, the metaphysical difficulties
met with in this connexion.</p>
<p>
As soon as we have perceived that the supposed unities "
body " and " ego " are only makeshifts, designed
for provisional orientation and for definite practical ends (so
that we may take hold of bodies, protect ourselves against pain,
and so forth), we find ourselves obliged, in many more advanced
scientific investigations, to abandon them as insufficient and
inappropriate. The antithesis between ego and world, between sensation
(appearance) and thing, then vanishes, and we have simply to deal
with the connexion of the elements a b c . . . A B C . . . K L
M . . ., of which this antithesis was only a partially appropriate
and imperfect expression. This connexion is nothing more or less
than the combination of the above-mentioned elements with other
similar elements (time and space). Science has simply to accept
this connexion, and to get its bearings in it, without at once
wanting to explain its existence.</p>
<p>
On a superficial examination the complex a b c . . . appears to
be made up of much more evanescent elements than A B C . . . and
K L M . . ., in which last the elements seem to be connected with
greater stability and in a more permanent manner (being joined
to solid nuclei as it were). Although on closer inspection the
elements of all complexes prove to be homogeneous, yet even when
this has been recognised, the earlier notion of an antithesis
of body and spirit easily slips in again. The philosophical spiritualist
is often sensible of the difficulty of imparting the needed solidity
to his mind-created world of bodies; the materialist is at a loss
when required to endow the world of matter with sensation. The
monistic point of view, which reflexion has evolved, is easily
clouded by our older and more powerful instinctive notions.</p>
<h5>8.</h5>
<p class="fst">
The difficulty referred to is particularly felt when we consider
the following case. In the complex A B C . . .. which we have
called the world of matter, we find as parts, not only our own
body K L M . . ., but also the bodies of other persons (or animals)
K' L' M' . . , K" L" M" . . .. to which, by analogy,
we imagine other a' b' c'..., a" b" c", annexed,
similar to a b c . . . So long as we deal with K' L' M' . . .,
we find ourselves in a thoroughly familiar province which is at
every point accessible to our senses. When, however, we inquire
after the sensations or feelings belonging to the body K' L' M'
. . ., we no longer find these in the province of sense: we add
them in thought. Not only is the domain which we now enter far
less familiar to us, but the transition into it is also relatively
unsafe. We have the feeling as if we were plunging into an abyss.
Persons who adopt this way of thinking only, will never thoroughly
rid themselves of that sense of insecurity, which is a very fertile
source of illusory problems.</p>
<p>
But we are not restricted to this course. Let us consider, first,
the reciprocal relations of the elements of the complex A B C
. . ., without regarding K L M . . . (our body). All physical
investigations are of this sort. A white ball falls upon a bell;
a sound is heard. The ball turns yellow before a sodium lamp,
red before a lithium lamp. Here the elements (A B C . . . ) appear
to be connected only with one another and to be independent of
our body (K L M . . . ). But if we take santonin, the ball again
turns yellow. If we press one eye to the side, we see two balls.
If we close our eyes entirely, there is no ball there at all.
If we sever the auditory nerve, no sound is heard. The elements
=4 B C . . ., therefore, are not only connected with one another,
but also with K L M; To this extent, and to this extent <em>only</em>,
do we call A B C . . . sensations, and regard A B C as belonging
to the ego. In what follows, wherever the reader finds the terms
" Sensation," " Sensation-complex," used alongside
of or instead of the expressions " element," "
complex of elements," it must be borne in mind that it is
only in the connexion and relation in question, only in their
functional dependence, that the elements are sensations. In another
functional relation they are at the same time physical objects.
We only use the additional term " sensations" to describe
the elements, because most people are much more familiar with
the elements in question as sensations (colours, sounds, pressures,
spaces, times, etc.), while according to the popular conception
it is particles of mass that are considered as physical elements,
to which the elements, in the sense here used, are attached as
" properties " or " effects.".</p>
<p>
In this way, accordingly, we do not find the gap between bodies
and sensations above described, between what is without and what
is within, between the material world and the spiritual world.
All elements A B C . . ., K L M. . .. constitute a <em>single</em>
coherent mass only, in which, when any one element is disturbed,
<em>all</em> is put in motion; except that a disturbance in K, L
M, . . . has a more extensive and profound action than one in
A B C . . . A magnet in our neighbourhood disturbs the particles
of iron near it; a falling boulder shakes the earth; but the severing
of a nerve sets in motion the <em>whole</em> system of elements.
Quite involuntarily does this relation of things suggest the picture
of a viscous mass, at certain places (as in the ego) more firmly
coherent than in others. I have often made use of this image in
lectures.</p>
<h5>9.</h5>
<p class="fst">
Thus the great gulf between physical and psychological research
persists only when we acquiesce in our habitual stereotyped conceptions.
A colour is a physical object as soon as we consider its dependence,
for instance, upon its luminous source, upon other colours, upon
temperatures, upon spaces, and so forth. When we consider, however,
its dependence upon the retina (the elements K L M. . .), it is
a psychological object, a sensation. Not the subject matter, but
the direction of our investigation, is different in the two domains.
(Cp. also Chapter II., pp. 43, 44.)</p>
<p>
Both in reasoning from the observation of the bodies of other
men or animals, to the sensations which they possess, as well
as in investigating the influence of our own body upon our own
sensations, we have to complete observed facts by analogy. This
is accomplished with much greater ease and certainty, when it
relates, say, only to nervous processes, which cannot be fully
observed in our own bodies - that is, when it is carried out in
the more familiar physical domain - than when it is extended
to the psychical domain, to the sensations and thoughts of other
people. Otherwise there is no essential difference.</p>
<h5>10.</h5>
<p class="fst">
The considerations just advanced, expressed as they have been
in an abstract form, will gain in strength and vividness if we
consider the concrete facts from which they flow. Thus, I lie
upon my sofa. If I close my right eye, the picture represented
in the accompanying cut is presented to my left eye In a frame
formed by the ridge of my eyebrow, by my nose, and by my moustache,
appears a part of my body, so far as visible, with its environment.
My body differs from other human bodies - beyond the fact that
every intense motor idea is immediately expressed by a movement
of it, and that, if it is touched, more striking changes are determined
than if other bodies are touched - by the circumstance, that it
is only seen piecemeal, and, especially, is seen without a head.
If I observe an element A within my field of vision, and investigate
its connexion with another element B within the same field, I
step out of the domain of physics into that of physiology or psychology,
provided B, to use the apposite expression of a friend of mine
made upon seeing this drawing, passes through my skin. Reflexions
like that for the field of vision may be made with regard to the
province of touch and the perceptual domains of the other senses.</p>
<h5>11.</h5>
<p class="fst">
Reference has already been made to the different character of
the groups of elements denoted by A B C . . . and a b c . . .
As a matter of fact, when we see a green tree before us, or remember
a green tree, that is, represent a green tree to ourselves, we
are perfectly aware of the difference of the two cases. The represented
tree has a much less determinate, a much more changeable form;
its green is much paler and more evanescent; and, what is of especial
note, it plainly appears in a different domain. A movement that
we will to execute is never more than a represented movement,
and appears in a different domain from that of the executed movement,
which always takes place when the image is vivid enough. Now the
statement that the elements A and a appear in different domains,
means, if we go to the bottom of it, simply this, that these elements
are united with different other elements. Thus far, therefore,
the fundamental constituents of A B C . . .. a b c . . . would
seem to be <em>the same</em> (colours, sounds, spaces, times, motor
sensations . . .), and only the character of their connexion different.</p>
<p>
Ordinarily pleasure and pain are regarded as different from sensations.
Yet not only tactual sensations, but all other kinds of sensations,
may pass gradually into pleasure and pain. Pleasure and pain also
may be justly termed sensations. Only they are not so well analysed
and so familiar, nor, perhaps, limited to so few organs as the
common sensations. In fact, sensations of pleasure and pain, however
faint they may be, really constitute an essential part of the
content of all so-called emotions. Any additional element that
emerges into consciousness when we are under the- influence of
emotions may be described as more or less diffused and not sharply
localised sensations. William James, and after him Theodule Ribot,
have investigated the physiological mechanism of the emotions:
they hold that what is essential is purposive tendencies of the
body to action - tendencies which correspond to circumstances
and are expressed in the organism. Only a part of these emerges
into consciousness. We are sad because we shed tears, and not
<em>vice versa</em>, says James. And Ribot justly observes that
a cause of the backward state of our knowledge of the emotions
is that we have always confined our observation to so much of
these physiological processes as emerges into consciousness. At
the same time he goes too far when he maintains that everything
psychical is merely "<em>surajoute</em>" to the physical,
and that it is only the physical that produces effects. For us
this distinction is non-existent.</p>
<p>
Thus, perceptions, presentations, volitions, and emotions, in
short the whole inner and outer world, are put together, in combinations
of varying evanescence and permanence, out of a small number of
homogeneous elements. Usually, these elements are called sensations.
But as vestiges of a one-sided theory inhere in that term, we
prefer to speak simply of elements, as we have already done. The
aim of all research is to ascertain the mode of connexion of these
elements. If it proves impossible to solve the problem by assuming
<em>one</em> set of such elements, then more than one will have
to be assumed. But for the questions under discussion it would
be improper to begin by making complicated assumptions in advance.</p>
<h5>12.</h5>
<p class="fst">
That in this complex of elements, which fundamentally is only
one, the boundaries of bodies and of the ego do not admit of being
established in a manner definite and sufficient for all cases,
has already been remarked. To bring together elements that are
most intimately connected with pleasure and pain into one ideal
mental-economical unity, the ego; this is a task of the highest
importance for the intellect working in the service of the pain-avoiding,
pleasure-seeking will. The delimitation of the ego, therefore,
is instinctively effected, is rendered familiar, and possibly
becomes fixed through heredity. Owing to their high practical
importance, not only for the individual, but for the entire species,
the composites " ego " and " body " instinctively
make good their claims, and assert themselves with elementary
force. In special cases, however, in which practical ends are
not concerned, but where knowledge is an end in itself, the delimitation
in question may prove to be insufficient, obstructive, and untenable.</p>
<p>
Similarly, class-consciousness, class-prejudice, the feeling of
nationality, and even the narrowest-minded local patriotism may
have a high importance, for certain purposes. But such attitudes
will not be shared by the broad-minded investigator, at least
not in moments of research. All such egoistic views are adequate
only for practical purposes. Of course, even the investigator
may succumb to habit. Trifling pedantries and nonsensical discussions;
the cunning appropriation of others' thoughts, with perfidious
silence as to the sources; when the word of recognition must be
given, the difficulty of swallowing one's defeat, and the too
common eagerness at the same time to set the opponent's achievement
in a false light: all this abundantly shows that the scientist
and scholar have also the battle of existence to fight, that the
ways even of science still lead to the mouth, and that the pure
impulse towards knowledge is still an ideal in our present social
conditions.</p>
<p>
The primary fact is not the ego, but the elements (sensations).
What was said on p. 21 as to the term " sensation "
must be borne in mind. The elements constitute the I. s have the
sensation green, signifies that the element green occurs in a
given complex of other elements (sensations, memories). When <em>I</em>
cease to have the sensation green, when <em>I</em> die, then the
elements no longer occur in the ordinary, familiar association.
That is all. Only an ideal mental-economical unity, not a real
unity, has ceased to exist. The ego is not a definite, unalterable,
sharply bounded unity. None of these attributes are important;
for all vary even within the sphere of individual life; in fact
their alteration is even sought after by the individual. <em>Continuity</em>
alone is important. This view accords admirably with the position
which Weismann has reached by biological investigations. ("<em>Zur
Frage der Unsterblichkeit der Einzelligen</em>," <em>Biolog
Centralbl</em>., Vol. IV., Nos. 21, 22; compare especially pages
654 and 655, where the scission of the individual into two equal
halves is spoken of.) But continuity is only a means of preparing
and conserving what is contained in the ego. This content, and
not the ego, is the principal thing. This content, however, is
not confined to the individual. With the exception of some insignificant
and valueless personal memories, it remains presented in others
even after the death of the individual. The elements that make
up the consciousness of a given individual are firmly connected
with one another, but with those of another individual they are
only feebly connected, and the connexion is only casually apparent.
Contents of consciousness, however, that are of universal significance,
break through these limits of the individual, and, attached of
course to individuals again, can enjoy a continued existence of
an impersonal, superpersonal kind, independently of the personality
by means of which they were developed. To contribute to this is
the greatest happiness of the artist, the scientist, the inventor,
the social reformer, etc.</p>
<p>
The ego must be given up. It is partly the perception of this
fact, partly the fear of it, that has given rise to the many extravagances
of pessimism and optimism, and to numerous religious, ascetic,
and philosophical absurdities. In the long run we shall not be
able to close our eyes to this simple truth, which is the immediate
outcome of psychological analysis. We shall then no longer place
so high a value upon the ego, which even during the individual
life greatly changes, and which, in sleep or during absorption
in some idea, just in our very happiest moments, may be partially
or wholly absent. We shall then be willing to renounce individual
immortality,' and not place more value upon the subsidiary elements
than upon the principal ones. In this way we shall arrive at a
freer and more enlightened view of life, which will preclude the
disregard of other egos and the overestimation of our own. The
ethical ideal founded on this view of life will be equally far
removed from the ideal of the ascetic, which is not biologically
tenable for whoever practises it, and vanishes at once with his
disappearance, and from the ideal of an overweening Nietzschean
"superman," who cannot, and I hope will not be tolerated
by his fellow-men.</p>
<p>
If a knowledge of the connexion of the elements (sensations) does
not suffice us, and we ask, <em>Who</em> possesses this connexion
of sensations, <em>Who</em> experiences it ? then we have succumbed
to the old habit of subsuming every element (every sensation)
under some unanalysed complex, and we are falling back imperceptibly
upon an older, lower, and more limited point of view. It is often
pointed out, that a psychical experience which is not the experience
of a determinate subject is unthinkable, and it is held that in
this way the essential part played by the unity of consciousness
has been demonstrated. But the Ego-consciousness can be of many
different degrees and composed of a multiplicity of chance memories.
One might just as well say that a physical process which does
not take place in some environment or other, or at least somewhere
in the universe, is unthinkable. In both cases, in order to make
a beginning with our investigation, we must be allowed to abstract
from the environment, which, as regards its influence, may be
very different in different cases, and in special cases may shrink
to a minimum. Consider the sensations of the lower animals, to
which a subject with definite features can hardly be ascribed.
It is out of sensations that the subject is built up, and, once
built up, no doubt the subject reacts in turn on the sensations.</p>
<p>
The habit of treating the unanalysed ego complex as an indiscerptible
unity frequently assumes in science remarkable forms. First, the
nervous system is separated from the body as the seat of the sensations.
In the nervous system again, the brain is selected as the organ
best fitted for this end, and finally, to save the supposed psychical
unity, a <em>point</em> is sought in the brain as the seat of the
soul. But such crude conceptions are hardly fit even to foreshadow
the roughest outlines of what future research will do for the
connexion of the physical and the psychical. The fact that the
different organs and parts of the nervous system are physically
connected with, and can be readily excited by, one another, is
probably at the bottom of the notion of "psychical unity."</p>
<p>
I once heard the question seriously discussed, "How the perception
of a large tree could find room in the little head of a man?)'
Now, although this "problem " is no problem, yet it
renders us vividly sensible of the absurdity that can be committed
by thinking sensations spatially into the brain. When I speak
of the sensations of another person, those sensations are, of
course, not exhibited in my optical or physical space; they are
mentally added, and I conceive them causally, not spatially, attached
to the brain observed, or rather, functionally presented. When
I speak of my own sensations, these sensations do not exist spatially
in my head, but rather my "head" shares with them the
same spatial field, as was explained above. (Compare the remarks
on Fig. I on pp. I7-I9 above.).</p>
<p>
The unity of consciousness is not an argument in point. Since
the apparent antithesis between the real world and the world given
through the senses lies entirely in our mode of view, and no actual
gulf exists between them, a complicated and variously interconnected
content of consciousness is no more difficult to understand than
is the complicated interconnection of the world.</p>
<p>
If we regard the ego as a real unity, we become involved in the
following dilemma: either we must set over against the ego a world
of unknowable entities (which would be quite idle and purposeless),
or we must regard the whole world, the egos of other people included,
as comprised in our own ego (a proposition to which it is difficult
to yield serious assent).</p>
<p>
But if we take the ego simply as a practical unity, put together
for purposes of provisional survey, or as a more strongly cohering
group of elements, less strongly connected with other groups of
this kind, questions like those above discussed will not arise,
and research will have an unobstructed future.</p>
<p>
In his philosophical notes Lichtenberg says: " We become
conscious of certain presentations that are not dependent upon
us; of others that we at least think are dependent upon us. Where
is the border-line? We know only the existence of our sensations,
presentations, and thoughts. We should say, <em>It thinks</em>,
just as we say, <em>It lightens</em>. It is going too far to say
<em>cogito</em>, if we translate <em>cogito </em>by <em>I think</em>.
The assumption, or postulation, of the ego is a mere practical
necessity." Though the method by which Lichtenberg arrived
at this result is somewhat different from ours, we must nevertheless
give our full assent to his conclusion.</p>
<h5>13.</h5>
<p class="fst">
Bodies do not produce sensations, but complexes of elements (complexes
of sensations) make up bodies. If, to the physicist, bodies appear
the real, abiding existences, whilst the " elements "
are regarded merely as their evanescent, transitory appearance,
the physicist forgets, in the assumption of such a view, that
all bodies are but thought-symbols for complexes of elements (complexes
of sensations). Here, too, the elements in question form the real,
immediate, and ultimate foundation, which it is the task of physiologico-physical
research to investigate. By the recognition of this fact, many
points of physiology and physics assume more distinct and more
economical forms, and many spurious problems are disposed of.</p>
<p>
For us, therefore, the world does not consist of mysterious entities,
which by their interaction with another, equally mysterious entity,
the ego, produce sensations, which alone are accessible. For us,
colours, sounds, spaces, times, . . . are provisionally the ultimate
elements, whose given connexion it is our business to investigate.</p>
<p>
[I have always felt it as a stroke of special good fortune, that
early in life, at about the age of fifteen, I lighted, in the
library of my father, on a copy of <em>Kant's Prolegomena to any
Future Metaphysics</em>. The book made at the time a powerful and
ineffaceable impression upon me, the like of which I never afterwards
experienced in any of my philosophical reading. Some two or three
years later the superfluity of the role played by "the thing
in itself" abruptly dawned upon me. On a bright summer day
in the open air, the world with my ego suddenly appeared to me
as <em>one</em> coherent mass of sensations, only more strongly
coherent in the ego. Although the actual working out of this thought
did not occur until a later period, yet this moment was decisive
for my whole view. I had still to struggle long and hard before
I was able to retain the new conception in my special subject.
With the valuable parts of physical theories we necessarily absorb
a good dose of false metaphysics, which it is very difficult to
sift out from what deserves to be preserved, especially when those
theories have become very familiar to us. At times, too, the traditional,
instinctive views would arise with great power and place impediments
in my way. Only by alternate studies in physics and in the physiology
of the senses, and by historico-physical investigations (since
about 1863), and after having endeavoured in vain to settle the
conflict by a physico-psychological monadology (in my lectures
on psycho-physics, in the <em>Zeitschrift fur praktische Heilkunde</em>,
Vienna, 1863, p. 364), have I attained to any considerable stability
in my views. I make no pretensions to the title of philosopher.
I only seek to adopt in physics a point of view that need not
be changed the moment our glance is carried over into the domain
of another science; for, ultimately, all must form one whole.
The molecular physics of today certainly does not meet this requirement.
What I say I have probably not been the first to say. I also do
not wish to offer this exposition of mine as a special achievement.
It is rather my belief that every one will be led to a similar
view, who makes a careful survey of any extensive body of knowledge.
Avenarius, with whose works I became acquainted in 1883, approaches
my point of view (<em>Philosophie als Denken des Welt nach dem
Princip des kleinsten Kraftmasses</em>, 1876). Also Hering, in
his paper on Memory (<em>Almanach der Wiener Akademie</em>, 1870,
p. 258; English translation, O. C. Pub. Co., Chicago, 4th edition,
enlarged, 1913), and J. Popper in his beautiful book, <em>Das Rechte
zu leben und die Pflicht zu sterben</em> (Leipzig, 1878, p. 62),
have advanced allied thoughts. Compare also my paper <em>Ueber
die okonomische Natur der physikalis der Forschung</em> (<em>Almanach
der WienerAkadernie</em>, 1882, p. 179, note; English translation
in my <em>Popular Scientific Lectures</em>, Chicago, 1894). Finally
let me also refer here to the introduction to W. Preyer's <em>Reine
Empfindungslehres</em> to Riehl's <em>Freibrurger Antrittsrede</em>,
p. 40, and to R. Wahle's <em>Gehirn und Bewusstsein</em>, 1884.
My views were indicated briefly in 1872 and 1875, and not expounded
at length until 1882 and 1883. I should probably have much additional
matter to cite as more or less allied to this line of thought,
if my knowledge of the literature were more extensive.]</p>
<p>
It is precisely in this that the exploration of reality consists.
In this investigation we must not allow ourselves to be impeded
by such abridgments and delimitations as body, ego, matter, spirit,
etc., which have been formed for special, practical purposes and
with wholly provisional and limited ends in view. On the contrary,
the fittest forms of thought must be created in and by that research
itself, just as is done in every special science. In place of
the traditional, instinctive ways of thought, a freer, fresher
view, conforming to developed experience, and reaching out beyond
the requirements of practical life, must be substituted throughout.</p>
<h5>14.</h5>
<p class="fst">
Science always has its origin in the adaptation of thought to
some definite field of experience. The results of the adaptation
are thought-elements, which are able to represent the whole field.
The outcome, of course, is different, according to the character
and extent of the field. If the field of experience is enlarged,
or if several fields heretofore disconnected are united, the traditional,
familiar thought-elements no longer suffice for the extended field.
In the struggle of acquired habit with the effort after adaptation,
problems arise, which disappear when the adaptation is perfected,
to make room for others which have arisen meanwhile. </p>
<p>
To the physicist, <em>qua</em> physicist, the idea of "body"
is productive of a real facilitation of view, and is not the cause
of disturbance. So, also, the person with purely practical aims,
is materially supported by the idea of the <em>I</em> or ego. For,
unquestionably, every form of thought that has been designedly
or undesignedly constructed for a given purpose, possesses for
that purpose a <em>permanent</em> value. When, however, physics
and psychology meet, the ideas held in the one domain prove to
be untenable in the other. From the attempt at mutual adaptation
arise the various atomic and monadistic theories - which, however,
never attain their end. If we regard sensations, in the sense
above defined (p. 13), as the elements of the world, the problems
referred to appear to be disposed of in all essentials, and the
first and most important adaptation to be consequently effected.
This fundamental view (without any pretension to being a philosophy
for all eternity) can at present be adhered to in all fields of
experience; it is consequently the one that accommodates itself
with the least expenditure of energy, that is, more economically
than any other, to the present temporary collective state of knowledge
Furthermore, in the consciousness of its purely economical function,
this fundamental view is eminently tolerant. It does not obtrude
itself into fields in which the current conceptions are still
adequate. It is also ever ready, upon subsequent extensions of
the field of experience, to give way before a better conception.</p>
<p>
The presentations and conceptions of the average man of the world
are formed and dominated, not by the full and pure desire for
knowledge as an end in itself, but by the struggle to adapt himself
favourably to the conditions of life. Consequently they are less
exact, but at the same time also they are preserved from the monstrosities
which easily result from a one-sided and impassioned pursuit of
a scientific or philosophical point of view. The unprejudiced
man of normal psychological development takes the elements which
we have called A B C . . . to be spatially contiguous and external
to the elements K L M. . .. and he holds this view<em> immediately</em>,
and not by any process of psychological projection or logical
inference or construction; even were such a process to exist,
he would certainly not be conscious of it. He sees, then, an "
external world " A B C . . . different from his body K L
M . and existing outside it. As he does not observe at first the
dependence of the A B C's . . . on the K L M's . . . (which are
always repeating themselves in the same way and consequently receive
little attention), but is always dwelling upon the fixed connexion
of the A B C's . . . with one another, there appears to him a
world of things independent of his Ego. This Ego is formed by
the observation of the special properties of the particular thing
K L M . . . with which pain, pleasure, feeling, will, etc., are
intimately connected. Further, he notices things K' L' M', K"
L" M", which behave in a manner perfectly analogous
to K L M, and whose behaviour he thoroughly understands as soon
as he has thought of analogous feelings, sensations, etc., as
attached to them in the same way as he observed these feelings,
sensations, etc., to be attached to himself. The analogy impelling
him to this result is the same as determines him, when he has
observed that a wire possesses <em>all</em> the properties of a
conductor charged with an electric current, except one which has
not yet been directly demonstrated, to conclude that the wire
possesses this one property as well. Thus, since he does not perceive
the sensations of his fellowmen or of animals but only supplies
them by analogy, while he infers from the behaviour of his fellow-men
that they are in the same position over against himself, he is
led to ascribe to the sensations, memories, etc., a particular
A B C . . . K L M . . . of a different nature, always differently
conceived according to the degree of civilisation he has reached;
but this process, as was shown above, is unnecessary, and in science
leads into a maze of error, although the falsification is of small
significance for practical life.</p>
<p>
These factors, determining as they do the intellectual outlook
of the plain man, make their appearance alternately in him according
to the requirements of practical life for the time being, and
persist in a state of nearly stable equilibrium. The scientific
conception of the world, however, puts the emphasis now upon one,
now upon the other factor, makes sometimes one and sometimes the
other its starting-point, and, in its struggle for greater precision,
unity and consistency, tries, so far as seems possible, to thrust
into the background all but the most indispensable conceptions.
In this way dualistic and monistic systems arise.</p>
<p>
The plain man is familiar with blindness and deafness, and knows
from his everyday experience that the look of things is influenced
by his senses; but it never occurs to him to regard the whole
world as the creation of his senses. He would find an idealistic
system, or such a monstrosity as solipsism, intolerable in practice.</p>
<p>
It may easily become a disturbing element in unprejudiced scientific
theorising when a conception which is adapted to a particular
and strictly limited purpose is promoted in advance to be the
foundation of <em>all</em> investigation. This happens, for example,
when all experiences are regarded as " effects " of
an external world extending into consciousness. This conception
gives us a tangle of metaphysical difficulties which it seems
impossible to unravel. But the spectre vanishes at once when we
look at the matter as it were in a mathematical light, and make
it clear to ourselves that all that is valuable to us is the discovery
of <em>functional relations</em>, and that what we want to know
is merely the dependence of experiences or one another. It then
becomes obvious that the reference to unknown fundamental variables
which are not given (things-in-themselves) is purely fictitious
and superfluous. But even when we allow this fiction, uneconomical
though it be, to stand at first, we can still easily distinguish
different classes of the mutual dependence of the elements of
" the facts of consciousness "; and this alone is important
for us.</p>
<p>
A B C . . . K L M a b c . . . </p>
<p>
K' L' M' ... a' b' c' ..</p>
<p>
K" L" M"... a" B" C"</p>
<p>
The system of the elements is indicated in the above scheme. Within
the space surrounded by a single line lie the elements which belong
to the sensible world, - the elements whose regular connexion
and peculiar dependence on one another represent both physical
(lifeless) bodies and the bodies of men, animals and plants. All
these elements, again, stand in a relation of quite peculiar dependence
to certain of the elements K L M - the nerves of our body, namely
- by which the facts of sense-physiology are expressed. The space
surrounded by a double line contains the elements belonging to
the higher psychic life, memory-images and presentations, including
those which we form of the psychic life of our fellow-men. These
may be distinguished by accents. These presentations, again, are
connected with one another in a different way (association, fancy)
from the sensational elements A B C . . . K L M; but it cannot
be doubted that they are very closely allied to the latter, and
that in the last resort their behaviour is determined by A B C
. . . K L M (the totality of the physical world), and especially
by our body and nervous system. The presentations a' b' c' of
the contents of the consciousness of our fellow-men play for us
the part of intermediate substitutions, by means of which the
behaviour of our fellow-men, - the functional relation of K' L'
M' to A B C - becomes intelligible, in so far as in and for itself
(physically) it would remain unexplained.</p>
<p>
It is therefore important for us to recognise that in all questions
in this connexion, which can be intelligibly asked and which can
interest us, everything turns on taking into consideration different
<em>ultimate variables</em> and different <em>relations of dependence</em>.
That is the main point. Nothing will be changed in the actual
facts or in the functional relations, whether we regard all the
data as contents of consciousness, or as partially so, or as completely
physical.</p>
<p>
The biological task of science is to provide the fully developed
human individual with as perfect a means of orientating himself
as possible. No other scientific ideal can be realised, and any
other must be meaningless.</p>
<p>
The philosophical point of view of the average man - if that term
may be applied to his naive realism - has a claim to the highest
consideration. It has arisen in the process of immeasurable time
without the intentional assistance of man. It is a product of
nature, and is preserved by nature. Everything that philosophy
has accomplished - though we may admit the biological justification
of every advance, nay, of every error - is, as compared with it,
but an insignificant and ephemeral product of art. The fact is,
every thinker, every philosopher, the moment he is forced to abandon
his one-sided intellectual occupation by practical necessity,
immediately returns to the general point of view of mankind. Professor
X., who theoretically believes himself to be a solipsist, is certainly
not one in practice when he has to thank a Minister of State for
a decoration conferred upon him, or when he lectures to an audience.
The Pyrrhonist who is cudgelled in Moliere's <em>Le Mariage force</em>,
does not go on saying "<em> Il me semble que vous me battez</em>,"
but takes his beating as really received.</p>
<p>
Nor is it the purpose of these " introductory remarks "
to discredit the standpoint of the plain man. The task which we
have set ourselves is simply to show why and for what purpose
we hold that standpoint during most of our lives, and why and
for what purpose we are provisionally obliged to abandon it. No
point of view has absolute, permanent validity. Each has importance
only for some given end.
...</p>
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Ernst Mach (1886, revised to 1905)
The Analysis of Sensations
and the Relation of the Physical to the Psychical
Source: The Analysis of Sensations (1897). Dover Edition, 1959; Translation: by C M Williams and Sydney Waterlow;
First Chapter reproduced here.
I. INTRODUCTORY REMARKS:
ANTI METAPHYSICAL.
1.
THE great results achieved by physical science in modern times
- results not restricted to its own sphere but embracing that
of other sciences which employ its help - have brought it about
that physical ways of thinking and physical modes of procedure
enjoy on all hands unwonted prominence, and that the greatest
expectations are associated with their application. In keeping
with this drift of modern inquiry, the physiology of the senses,
gradually abandoning the method of investigating sensations in
themselves followed by men like Goethe, Schopenhauer, and others,
but with greatest success by Johannes Muller, has also assumed
an almost exclusively physical character. This tendency must appear
to us as not altogether appropriate, when we reflect that physics,
despite its considerable development, nevertheless constitutes
but a portion of a larger collective body of knowledge,
and that it is unable, with its limited intellectual implements,
created for limited and special purposes, to exhaust all the subject-matter
in question. Without renouncing the support of physics, it is
possible for the physiology of the senses, not only to pursue
its own course of development, but also to afford to physical
science itself powerful assistance. The following simple considerations
will serve to illustrate this relation between the two.
2.
Colours, sounds, temperatures, pressures, spaces, times, and so
forth, are connected with one another in manifold ways; and with
them are associated dispositions of mind, feelings, and volitions.
Out of this fabric, that which is relatively more fixed and permanent
stands prominently forth, engraves itself on the memory, and expresses
itself in language. Relatively greater permanency is exhibited,
first, by certain complexes of colours, sounds, pressures, and
so forth, functionally connected in time and space, which therefore
receive special names, and are called bodies. Absolutely permanent
such complexes are not.
My table is now brightly, now dimly lighted. Its temperature varies.
It may receive an ink stain. One of its legs may be broken. It
may be repaired, polished, and replaced part by part. But, for
me, it remains the table at which I daily write.
My friend may put on a different coat. His countenance may assume
a serious or a cheerful expression. His complexion, under the
effects of light or emotion, may change. His shape may be altered
by motion, or be definitely changed. Yet the number of the permanent
features presented, compared with the number of the gradual alterations,
is always so great, that the latter may be overlooked. It is the
same friend with whom I take my daily walk.
My coat may receive a stain, a tear. My very manner of expressing
this shows that we are concerned here with a sum-total of permanency,
to which the new element is added and from which that which is
lacking is subsequently taken away.
Our greater intimacy with this sum-total of permanency, and the
preponderance of its importance for me as contrasted with the
changeable element, impel us to the partly instinctive, partly
voluntary and conscious economy of mental presentation and designation,
as expressed in ordinary thought and speech. That which is presented
in a single image receives a single designation, a single name.
Further, that complex of memories, moods, and feelings, joined
to a particular body (the human body), which is called the
"I" or "Ego," manifests itself as relatively permanent.
I may be engaged upon this or that subject, I may be quiet and
cheerful, excited and ill-humoured. Yet, pathological cases
apart, enough durable features remain to identify the ego. Of
course, the ego also is only of relative permanency.
The apparent permanency of the ego consists chiefly in the single
fact of its continuity, in the slowness of its changes. The many
thoughts and plans of yesterday that are continued today, and
of which our environment in waking hours incessantly reminds us
(whence in dreams the ego can be very indistinct, doubled, or
entirely wanting), and the little habits that are unconsciously
and involuntarily kept up for long periods of time, constitute
the groundwork of the ego. There can hardly be greater differences
in the egos of different people, than occur in the course of years
in one person. When I recall today my early youth, I should take
the boy that I then was, with the exception of a few individual
features, for a different person, were it not for the existence
of the chain of memories. Many an article that I myself penned
twenty years ago impresses me now as something quite foreign to
myself. The very gradual character of the changes of the body
also contributes to the stability of the ego, but in a much less
degree than people imagine. Such things are much less analysed
and noticed than the intellectual and the moral ego. Personally,
people know themselves very poorly. When I wrote these lines in
1886, Ribot's admirable little book, The Diseases of Personality
(second edition, Paris, 1888, Chicago, 1895), was unknown to me.
Ribot ascribes the principal role in preserving the continuity
of the ego to the general sensibility. Generally, I am in perfect
accord with his views.
The ego is as little absolutely permanent as are bodies. That
which we so much dread in death, the annihilation of our permanency,
actually occurs in life in abundant measure. That which is most
valued by us, remains preserved in countless copies, or, in cases
of exceptional excellence, is even preserved of itself. In the
best human being, however, there are individual traits, the loss
of which neither he himself nor others need regret. Indeed, at
times, death, viewed as a liberation from individuality, may even
become a pleasant thought. Such reflections of course do not make
physiological death any the easier to bear.
After a first survey has been obtained, by the formation of the
substance-concepts " body " and " ego " (matter
and soul), the will is impelled to a more exact examination of
the changes that take place in these relatively permanent existences.
The element of change in bodies and the ego, is in fact, exactly
what moves the will I to this examination. Here the component
parts of the complex are first exhibited as its properties. A
fruit is sweet; but it can also be bitter. Also, other fruits
may be sweet. The red colour we are seeking is found in many bodies.
The neighbourhood of some bodies is pleasant; that of others,
unpleasant. Thus, gradually, different complexes are found to
be made up of common elements. The visible, the audible, the tangible,
are separated from bodies. The visible is analysed into colours
and into form. In the manifoldness of the colours, again, though
here fewer in number, other component parts are discerned - such
as the primary colours, and so forth. The complexes are disintegrated
into elements, that is to say, into their ultimate component parts,
which hitherto we have been unable to subdivide any further. The
nature of these elements need not be discussed at present; it
is possible that future investigations may throw light on it.
We need not here be disturbed by the fact that it is easier for
the scientist to study relations of relations of these elements
than the direct relations between them.
3.
The useful habit of designating such relatively permanent compounds
by single names, and of apprehending them by single thoughts,
without going to the trouble each time of an analysis of their
component parts, is apt to come into strange conflict with the
tendency to isolate the component parts. The vague image which
we have of a given permanent complex, being an image which does
not perceptibly change when one or another of the component parts
is taken away, seems to be something which exists in itself. Inasmuch
as it is possible to take away singly every constituent part without
destroying the capacity of the image to stand for the totality
and to be recognised again, it is imagined that it is possible
to subtract all the parts and to have something still remaining.
Thus naturally arises the philosophical notion, at first impressive,
but subsequently recognised as monstrous, of a " thing-in-itself,"
different from its "appearance," and unknowable.
Thing, body, matter, are nothing apart from the combinations of
the elements, - the colours, sounds, and so forth - nothing apart
from their so-called attributes. That protean pseudo-philosophical
problem of the single thing with its many attributes, arises wholly
from a misinterpretation of the fact, that summary comprehension
and precise analysis, although both are provisionally justifiable
and for many purposes profitable, cannot be carried on simultaneously.
A body is one and unchangeable only so long as it is unnecessary
to consider its details. Thus both the earth and a billiard-ball
are spheres, if we are willing to neglect all deviations from
the spherical form, and if greater precision is not necessary.
But when we are obliged to carry on investigations in orography
or microscopy, both bodies cease to be spheres.
4.
Man is pre-eminently endowed with the power of voluntarily and
consciously determining his own point of view. He can at one time
disregard the most salient features of an object, and immediately
thereafter give attention to its smallest details; now consider
a stationary current, without a thought of its contents (whether
heat, electricity or fluidity), and then measure the width of
a Fraunhofer line in the spectrum; he can rise at will to the
most general abstractions or bury himself in the minutest particulars.
Animals possess this capacity in a far less degree. They do not
assume a point of view, but are usually forced to it by their
sense-impressions. The baby that does not know its father with
his hat on, the dog that is perplexed at the new coat of its master,
have both succumbed in this conflict of points of view. Who has
not been worsted in similar plights ? Even the man of philosophy
at times succumbs, as the grotesque problem, above referred to,
shows.
In this last case, the circumstances appear to furnish a real
ground of justification. Colours, sounds, and the odours of bodies
are evanescent. But their tangibility, as a sort of constant nucleus,
not readily susceptible of annihilation, remains behind; appearing
as the vehicle of the more fugitive properties attached to it.
Habit, thus, keeps our thought firmly attached to this central
nucleus, even when we have begun to recognise that seeing hearing,
smelling, and touching are intimately akin in character. A further
consideration is, that owing to the singularly extensive development
of mechanical physics a kind of higher reality is ascribed to
the spatial and to the temporal than to colours, sounds, and odours;
agreeably to which, the temporal and spatial links of colours,
sounds, and odours appear to be more real than the colours, sounds
and odours themselves. The physiology of the senses, however,
demonstrates, that spaces and times may just as appropriately
be called sensations as colours and sounds. But of this later.
5.
Not only the relation of bodies to the ego, but the ego itself
also, gives rise to similar pseudo - problems, the character of
which may be briefly indicated as follows:
Let us denote the above-mentioned elements by the letters A B
C . . ., X L M . . ., a, b, c . . . Let those complexes of colours,
sounds, and so forth, commonly called bodies, be denoted, for
the sake of clearness, by A B C . .; the complex, known as our
own body, which is a part of the former complexes distinguished
by certain peculiarities, may be called K L M . . .; the complex
composed of volitions, memory-images, and the rest, we shall represent
by a b c . . . Usually, now, the complex a , c . . . K L M. .
., as making up the ego, is opposed to the complex A B C . . .,
as making up the world of physical objects; sometimes also, a
b c . . . is viewed as ego, and K L M . . . A B C . . . as world
of physical objects. Now, at first blush, A B C . . . appears
independent of the ego, and opposed to it as a separate existence.
But this independence is only relative, and gives way upon closer
inspection. Much, it is true, may change in the complex a b c
. . . without much perceptible change being induced in A B C .
. .; and vice versa. But many changes in a b c . . . do
pass, by way of changes in K L M . . ., to A B C . . .; and vice
versa. (As, for example, when powerful ideas burst forth into
acts, or when our environment induces noticeable changes in our
body.) At the same time the group K L M . . . appears to be more
intimately connected with a b c . . . and with A B C . . ., than
the latter with one another; and their relations find their expression
in common thought and speech.
Precisely viewed, however, it appears that the group A B C . .
. is always codetermined by K L M. A cube when seen close at hand,
looks large; when seen at a distance, small; its appearance to
the right eye differs from its appearance to the left; sometimes
it appears double; with closed eyes it is invisible. The properties
of one and the same body, therefore, appear modified by our own
body; they appear conditioned by it. But where, now, is that same
body, which appears so different? All that can be said
is, that with different K L M different A B C . . . are associated.
A common and popular way of thinking and speaking is to contrast
" appearance " with " reality." A pencil held
in front of us in the air is seen by us as straight; dip it into
the water, and we see it crooked. In the latter case we say that
the pencil appears crooked, but is in reality straight.
But what justifies us in declaring one fact rather than another
to be the reality, and degrading the other to the level of appearance
? In both cases we have to do with facts which present us with
different combinations of the elements, combinations which in
the two cases are differently conditioned. Precisely because of
its environment the pencil dipped in water is optically crooked;
but it is tactually and metrically straight. An image in a concave
or flat mirror is only visible, whereas under other and
ordinary circumstances a tangible body as well corresponds to
the visible image. A bright surface is brighter beside a dark
surface than beside one brighter than itself. To be sure, our
expectation is deceived when, not paying sufficient attention
to the conditions, and substituting for one another different
cases of the combination, we fall into the natural error of expecting
what we are accustomed to, although the case may be an unusual
one. The facts are not to blame for that. In these cases, to speak
of " appearance " may have a practical meaning, but
cannot have a scientific meaning. Similarly, the question which
is often asked, whether the world is real or whether we merely
dream it, is devoid of all scientific meaning. Even the wildest
dream is a fact as much as any other. If our dreams were more
regular, more connected, more stable, they would also have more
practical importance for us. In our waking hours the relations
of the elements to one another are immensely amplified in comparison
with what they were in our dreams. We recognise the dream for
what it is. When the process is reversed, the field of psychic
vision is narrowed; the contrast is almost entirely lacking. Where
there is no contrast, the distinction between dream and waking,
between appearance and reality, is quite otiose and worthless.
The popular notion of an antithesis between appearance and reality
has exercised a very powerful influence on scientific and philosophical
thought. We see this, for example, in Plato's pregnant and poetical
fiction of the Cave, in which, with our backs turned towards the
fire, we observe merely the shadows of what passes (Republic,
vii. 1). But this conception was not thought out to its final
consequences, with the result that it has had an unfortunate influence
on our ideas about the universe. The universe, of which nevertheless
we are a part, became completely separated from us, and was removed
an infinite distance away. Similarly, many a young man, hearing
for the first time of the refraction of stellar light, has thought
that doubt was cast on the whole of astronomy, whereas nothing
is required but an easily effected and unimportant correction
to put everything right again.
6.
We see an object having a point S. If we touch S, that is, bring
it into connexion with our body, we receive a prick. We can see
S, without feeling the prick. But as soon as we feel the prick
we find S on the skin. The visible point, therefore, is a permanent
nucleus, to which the prick is annexed, according to circumstances,
as something accidental. From the frequency of analogous occurrences
we ultimately accustom ourselves to regard all properties of bodies
as " effects " proceeding from permanent nuclei and
conveyed to the ego through the medium of the body; which effects
we call sensations. By this operation, however, these nuclei are
deprived of their entire sensory content, and converted into mere
mental symbols. The assertion, then, is correct that the world
consists only of our sensations. In which case we have knowledge
only of sensations, and the assumption of the nuclei referred
to, or of a reciprocal action between them, from which sensations
proceed, turns out to be quite idle and superfluous. Such a view
can only suit with a half-hearted realism or a half-hearted philosophical
criticism.
7.
Ordinarily the complex a b c . . . K L M . . . is contrasted as
ego with the complex A B C . . . At first only those elements
of A B C ... that more strongly alter a b c .... as a prick, a
pain, are wont to be thought of as comprised in the ego. Afterwards,
however, through observations of the kind just referred to, it
appears that the right to annex A B C . . . to the ego nowhere
ceases. In conformity with this view the ego can be so extended
as ultimately to embrace the entire world. The ego is not sharply
marked off, its limits are very indefinite and arbitrarily displaceable
Only by failing to observe this fact, and by unconsciously narrowing
those limits, while at the same time we enlarge them, arise, in
the conflict of points of view, the metaphysical difficulties
met with in this connexion.
As soon as we have perceived that the supposed unities "
body " and " ego " are only makeshifts, designed
for provisional orientation and for definite practical ends (so
that we may take hold of bodies, protect ourselves against pain,
and so forth), we find ourselves obliged, in many more advanced
scientific investigations, to abandon them as insufficient and
inappropriate. The antithesis between ego and world, between sensation
(appearance) and thing, then vanishes, and we have simply to deal
with the connexion of the elements a b c . . . A B C . . . K L
M . . ., of which this antithesis was only a partially appropriate
and imperfect expression. This connexion is nothing more or less
than the combination of the above-mentioned elements with other
similar elements (time and space). Science has simply to accept
this connexion, and to get its bearings in it, without at once
wanting to explain its existence.
On a superficial examination the complex a b c . . . appears to
be made up of much more evanescent elements than A B C . . . and
K L M . . ., in which last the elements seem to be connected with
greater stability and in a more permanent manner (being joined
to solid nuclei as it were). Although on closer inspection the
elements of all complexes prove to be homogeneous, yet even when
this has been recognised, the earlier notion of an antithesis
of body and spirit easily slips in again. The philosophical spiritualist
is often sensible of the difficulty of imparting the needed solidity
to his mind-created world of bodies; the materialist is at a loss
when required to endow the world of matter with sensation. The
monistic point of view, which reflexion has evolved, is easily
clouded by our older and more powerful instinctive notions.
8.
The difficulty referred to is particularly felt when we consider
the following case. In the complex A B C . . .. which we have
called the world of matter, we find as parts, not only our own
body K L M . . ., but also the bodies of other persons (or animals)
K' L' M' . . , K" L" M" . . .. to which, by analogy,
we imagine other a' b' c'..., a" b" c", annexed,
similar to a b c . . . So long as we deal with K' L' M' . . .,
we find ourselves in a thoroughly familiar province which is at
every point accessible to our senses. When, however, we inquire
after the sensations or feelings belonging to the body K' L' M'
. . ., we no longer find these in the province of sense: we add
them in thought. Not only is the domain which we now enter far
less familiar to us, but the transition into it is also relatively
unsafe. We have the feeling as if we were plunging into an abyss.
Persons who adopt this way of thinking only, will never thoroughly
rid themselves of that sense of insecurity, which is a very fertile
source of illusory problems.
But we are not restricted to this course. Let us consider, first,
the reciprocal relations of the elements of the complex A B C
. . ., without regarding K L M . . . (our body). All physical
investigations are of this sort. A white ball falls upon a bell;
a sound is heard. The ball turns yellow before a sodium lamp,
red before a lithium lamp. Here the elements (A B C . . . ) appear
to be connected only with one another and to be independent of
our body (K L M . . . ). But if we take santonin, the ball again
turns yellow. If we press one eye to the side, we see two balls.
If we close our eyes entirely, there is no ball there at all.
If we sever the auditory nerve, no sound is heard. The elements
=4 B C . . ., therefore, are not only connected with one another,
but also with K L M; To this extent, and to this extent only,
do we call A B C . . . sensations, and regard A B C as belonging
to the ego. In what follows, wherever the reader finds the terms
" Sensation," " Sensation-complex," used alongside
of or instead of the expressions " element," "
complex of elements," it must be borne in mind that it is
only in the connexion and relation in question, only in their
functional dependence, that the elements are sensations. In another
functional relation they are at the same time physical objects.
We only use the additional term " sensations" to describe
the elements, because most people are much more familiar with
the elements in question as sensations (colours, sounds, pressures,
spaces, times, etc.), while according to the popular conception
it is particles of mass that are considered as physical elements,
to which the elements, in the sense here used, are attached as
" properties " or " effects.".
In this way, accordingly, we do not find the gap between bodies
and sensations above described, between what is without and what
is within, between the material world and the spiritual world.
All elements A B C . . ., K L M. . .. constitute a single
coherent mass only, in which, when any one element is disturbed,
all is put in motion; except that a disturbance in K, L
M, . . . has a more extensive and profound action than one in
A B C . . . A magnet in our neighbourhood disturbs the particles
of iron near it; a falling boulder shakes the earth; but the severing
of a nerve sets in motion the whole system of elements.
Quite involuntarily does this relation of things suggest the picture
of a viscous mass, at certain places (as in the ego) more firmly
coherent than in others. I have often made use of this image in
lectures.
9.
Thus the great gulf between physical and psychological research
persists only when we acquiesce in our habitual stereotyped conceptions.
A colour is a physical object as soon as we consider its dependence,
for instance, upon its luminous source, upon other colours, upon
temperatures, upon spaces, and so forth. When we consider, however,
its dependence upon the retina (the elements K L M. . .), it is
a psychological object, a sensation. Not the subject matter, but
the direction of our investigation, is different in the two domains.
(Cp. also Chapter II., pp. 43, 44.)
Both in reasoning from the observation of the bodies of other
men or animals, to the sensations which they possess, as well
as in investigating the influence of our own body upon our own
sensations, we have to complete observed facts by analogy. This
is accomplished with much greater ease and certainty, when it
relates, say, only to nervous processes, which cannot be fully
observed in our own bodies - that is, when it is carried out in
the more familiar physical domain - than when it is extended
to the psychical domain, to the sensations and thoughts of other
people. Otherwise there is no essential difference.
10.
The considerations just advanced, expressed as they have been
in an abstract form, will gain in strength and vividness if we
consider the concrete facts from which they flow. Thus, I lie
upon my sofa. If I close my right eye, the picture represented
in the accompanying cut is presented to my left eye In a frame
formed by the ridge of my eyebrow, by my nose, and by my moustache,
appears a part of my body, so far as visible, with its environment.
My body differs from other human bodies - beyond the fact that
every intense motor idea is immediately expressed by a movement
of it, and that, if it is touched, more striking changes are determined
than if other bodies are touched - by the circumstance, that it
is only seen piecemeal, and, especially, is seen without a head.
If I observe an element A within my field of vision, and investigate
its connexion with another element B within the same field, I
step out of the domain of physics into that of physiology or psychology,
provided B, to use the apposite expression of a friend of mine
made upon seeing this drawing, passes through my skin. Reflexions
like that for the field of vision may be made with regard to the
province of touch and the perceptual domains of the other senses.
11.
Reference has already been made to the different character of
the groups of elements denoted by A B C . . . and a b c . . .
As a matter of fact, when we see a green tree before us, or remember
a green tree, that is, represent a green tree to ourselves, we
are perfectly aware of the difference of the two cases. The represented
tree has a much less determinate, a much more changeable form;
its green is much paler and more evanescent; and, what is of especial
note, it plainly appears in a different domain. A movement that
we will to execute is never more than a represented movement,
and appears in a different domain from that of the executed movement,
which always takes place when the image is vivid enough. Now the
statement that the elements A and a appear in different domains,
means, if we go to the bottom of it, simply this, that these elements
are united with different other elements. Thus far, therefore,
the fundamental constituents of A B C . . .. a b c . . . would
seem to be the same (colours, sounds, spaces, times, motor
sensations . . .), and only the character of their connexion different.
Ordinarily pleasure and pain are regarded as different from sensations.
Yet not only tactual sensations, but all other kinds of sensations,
may pass gradually into pleasure and pain. Pleasure and pain also
may be justly termed sensations. Only they are not so well analysed
and so familiar, nor, perhaps, limited to so few organs as the
common sensations. In fact, sensations of pleasure and pain, however
faint they may be, really constitute an essential part of the
content of all so-called emotions. Any additional element that
emerges into consciousness when we are under the- influence of
emotions may be described as more or less diffused and not sharply
localised sensations. William James, and after him Theodule Ribot,
have investigated the physiological mechanism of the emotions:
they hold that what is essential is purposive tendencies of the
body to action - tendencies which correspond to circumstances
and are expressed in the organism. Only a part of these emerges
into consciousness. We are sad because we shed tears, and not
vice versa, says James. And Ribot justly observes that
a cause of the backward state of our knowledge of the emotions
is that we have always confined our observation to so much of
these physiological processes as emerges into consciousness. At
the same time he goes too far when he maintains that everything
psychical is merely "surajoute" to the physical,
and that it is only the physical that produces effects. For us
this distinction is non-existent.
Thus, perceptions, presentations, volitions, and emotions, in
short the whole inner and outer world, are put together, in combinations
of varying evanescence and permanence, out of a small number of
homogeneous elements. Usually, these elements are called sensations.
But as vestiges of a one-sided theory inhere in that term, we
prefer to speak simply of elements, as we have already done. The
aim of all research is to ascertain the mode of connexion of these
elements. If it proves impossible to solve the problem by assuming
one set of such elements, then more than one will have
to be assumed. But for the questions under discussion it would
be improper to begin by making complicated assumptions in advance.
12.
That in this complex of elements, which fundamentally is only
one, the boundaries of bodies and of the ego do not admit of being
established in a manner definite and sufficient for all cases,
has already been remarked. To bring together elements that are
most intimately connected with pleasure and pain into one ideal
mental-economical unity, the ego; this is a task of the highest
importance for the intellect working in the service of the pain-avoiding,
pleasure-seeking will. The delimitation of the ego, therefore,
is instinctively effected, is rendered familiar, and possibly
becomes fixed through heredity. Owing to their high practical
importance, not only for the individual, but for the entire species,
the composites " ego " and " body " instinctively
make good their claims, and assert themselves with elementary
force. In special cases, however, in which practical ends are
not concerned, but where knowledge is an end in itself, the delimitation
in question may prove to be insufficient, obstructive, and untenable.
Similarly, class-consciousness, class-prejudice, the feeling of
nationality, and even the narrowest-minded local patriotism may
have a high importance, for certain purposes. But such attitudes
will not be shared by the broad-minded investigator, at least
not in moments of research. All such egoistic views are adequate
only for practical purposes. Of course, even the investigator
may succumb to habit. Trifling pedantries and nonsensical discussions;
the cunning appropriation of others' thoughts, with perfidious
silence as to the sources; when the word of recognition must be
given, the difficulty of swallowing one's defeat, and the too
common eagerness at the same time to set the opponent's achievement
in a false light: all this abundantly shows that the scientist
and scholar have also the battle of existence to fight, that the
ways even of science still lead to the mouth, and that the pure
impulse towards knowledge is still an ideal in our present social
conditions.
The primary fact is not the ego, but the elements (sensations).
What was said on p. 21 as to the term " sensation "
must be borne in mind. The elements constitute the I. s have the
sensation green, signifies that the element green occurs in a
given complex of other elements (sensations, memories). When I
cease to have the sensation green, when I die, then the
elements no longer occur in the ordinary, familiar association.
That is all. Only an ideal mental-economical unity, not a real
unity, has ceased to exist. The ego is not a definite, unalterable,
sharply bounded unity. None of these attributes are important;
for all vary even within the sphere of individual life; in fact
their alteration is even sought after by the individual. Continuity
alone is important. This view accords admirably with the position
which Weismann has reached by biological investigations. ("Zur
Frage der Unsterblichkeit der Einzelligen," Biolog
Centralbl., Vol. IV., Nos. 21, 22; compare especially pages
654 and 655, where the scission of the individual into two equal
halves is spoken of.) But continuity is only a means of preparing
and conserving what is contained in the ego. This content, and
not the ego, is the principal thing. This content, however, is
not confined to the individual. With the exception of some insignificant
and valueless personal memories, it remains presented in others
even after the death of the individual. The elements that make
up the consciousness of a given individual are firmly connected
with one another, but with those of another individual they are
only feebly connected, and the connexion is only casually apparent.
Contents of consciousness, however, that are of universal significance,
break through these limits of the individual, and, attached of
course to individuals again, can enjoy a continued existence of
an impersonal, superpersonal kind, independently of the personality
by means of which they were developed. To contribute to this is
the greatest happiness of the artist, the scientist, the inventor,
the social reformer, etc.
The ego must be given up. It is partly the perception of this
fact, partly the fear of it, that has given rise to the many extravagances
of pessimism and optimism, and to numerous religious, ascetic,
and philosophical absurdities. In the long run we shall not be
able to close our eyes to this simple truth, which is the immediate
outcome of psychological analysis. We shall then no longer place
so high a value upon the ego, which even during the individual
life greatly changes, and which, in sleep or during absorption
in some idea, just in our very happiest moments, may be partially
or wholly absent. We shall then be willing to renounce individual
immortality,' and not place more value upon the subsidiary elements
than upon the principal ones. In this way we shall arrive at a
freer and more enlightened view of life, which will preclude the
disregard of other egos and the overestimation of our own. The
ethical ideal founded on this view of life will be equally far
removed from the ideal of the ascetic, which is not biologically
tenable for whoever practises it, and vanishes at once with his
disappearance, and from the ideal of an overweening Nietzschean
"superman," who cannot, and I hope will not be tolerated
by his fellow-men.
If a knowledge of the connexion of the elements (sensations) does
not suffice us, and we ask, Who possesses this connexion
of sensations, Who experiences it ? then we have succumbed
to the old habit of subsuming every element (every sensation)
under some unanalysed complex, and we are falling back imperceptibly
upon an older, lower, and more limited point of view. It is often
pointed out, that a psychical experience which is not the experience
of a determinate subject is unthinkable, and it is held that in
this way the essential part played by the unity of consciousness
has been demonstrated. But the Ego-consciousness can be of many
different degrees and composed of a multiplicity of chance memories.
One might just as well say that a physical process which does
not take place in some environment or other, or at least somewhere
in the universe, is unthinkable. In both cases, in order to make
a beginning with our investigation, we must be allowed to abstract
from the environment, which, as regards its influence, may be
very different in different cases, and in special cases may shrink
to a minimum. Consider the sensations of the lower animals, to
which a subject with definite features can hardly be ascribed.
It is out of sensations that the subject is built up, and, once
built up, no doubt the subject reacts in turn on the sensations.
The habit of treating the unanalysed ego complex as an indiscerptible
unity frequently assumes in science remarkable forms. First, the
nervous system is separated from the body as the seat of the sensations.
In the nervous system again, the brain is selected as the organ
best fitted for this end, and finally, to save the supposed psychical
unity, a point is sought in the brain as the seat of the
soul. But such crude conceptions are hardly fit even to foreshadow
the roughest outlines of what future research will do for the
connexion of the physical and the psychical. The fact that the
different organs and parts of the nervous system are physically
connected with, and can be readily excited by, one another, is
probably at the bottom of the notion of "psychical unity."
I once heard the question seriously discussed, "How the perception
of a large tree could find room in the little head of a man?)'
Now, although this "problem " is no problem, yet it
renders us vividly sensible of the absurdity that can be committed
by thinking sensations spatially into the brain. When I speak
of the sensations of another person, those sensations are, of
course, not exhibited in my optical or physical space; they are
mentally added, and I conceive them causally, not spatially, attached
to the brain observed, or rather, functionally presented. When
I speak of my own sensations, these sensations do not exist spatially
in my head, but rather my "head" shares with them the
same spatial field, as was explained above. (Compare the remarks
on Fig. I on pp. I7-I9 above.).
The unity of consciousness is not an argument in point. Since
the apparent antithesis between the real world and the world given
through the senses lies entirely in our mode of view, and no actual
gulf exists between them, a complicated and variously interconnected
content of consciousness is no more difficult to understand than
is the complicated interconnection of the world.
If we regard the ego as a real unity, we become involved in the
following dilemma: either we must set over against the ego a world
of unknowable entities (which would be quite idle and purposeless),
or we must regard the whole world, the egos of other people included,
as comprised in our own ego (a proposition to which it is difficult
to yield serious assent).
But if we take the ego simply as a practical unity, put together
for purposes of provisional survey, or as a more strongly cohering
group of elements, less strongly connected with other groups of
this kind, questions like those above discussed will not arise,
and research will have an unobstructed future.
In his philosophical notes Lichtenberg says: " We become
conscious of certain presentations that are not dependent upon
us; of others that we at least think are dependent upon us. Where
is the border-line? We know only the existence of our sensations,
presentations, and thoughts. We should say, It thinks,
just as we say, It lightens. It is going too far to say
cogito, if we translate cogito by I think.
The assumption, or postulation, of the ego is a mere practical
necessity." Though the method by which Lichtenberg arrived
at this result is somewhat different from ours, we must nevertheless
give our full assent to his conclusion.
13.
Bodies do not produce sensations, but complexes of elements (complexes
of sensations) make up bodies. If, to the physicist, bodies appear
the real, abiding existences, whilst the " elements "
are regarded merely as their evanescent, transitory appearance,
the physicist forgets, in the assumption of such a view, that
all bodies are but thought-symbols for complexes of elements (complexes
of sensations). Here, too, the elements in question form the real,
immediate, and ultimate foundation, which it is the task of physiologico-physical
research to investigate. By the recognition of this fact, many
points of physiology and physics assume more distinct and more
economical forms, and many spurious problems are disposed of.
For us, therefore, the world does not consist of mysterious entities,
which by their interaction with another, equally mysterious entity,
the ego, produce sensations, which alone are accessible. For us,
colours, sounds, spaces, times, . . . are provisionally the ultimate
elements, whose given connexion it is our business to investigate.
[I have always felt it as a stroke of special good fortune, that
early in life, at about the age of fifteen, I lighted, in the
library of my father, on a copy of Kant's Prolegomena to any
Future Metaphysics. The book made at the time a powerful and
ineffaceable impression upon me, the like of which I never afterwards
experienced in any of my philosophical reading. Some two or three
years later the superfluity of the role played by "the thing
in itself" abruptly dawned upon me. On a bright summer day
in the open air, the world with my ego suddenly appeared to me
as one coherent mass of sensations, only more strongly
coherent in the ego. Although the actual working out of this thought
did not occur until a later period, yet this moment was decisive
for my whole view. I had still to struggle long and hard before
I was able to retain the new conception in my special subject.
With the valuable parts of physical theories we necessarily absorb
a good dose of false metaphysics, which it is very difficult to
sift out from what deserves to be preserved, especially when those
theories have become very familiar to us. At times, too, the traditional,
instinctive views would arise with great power and place impediments
in my way. Only by alternate studies in physics and in the physiology
of the senses, and by historico-physical investigations (since
about 1863), and after having endeavoured in vain to settle the
conflict by a physico-psychological monadology (in my lectures
on psycho-physics, in the Zeitschrift fur praktische Heilkunde,
Vienna, 1863, p. 364), have I attained to any considerable stability
in my views. I make no pretensions to the title of philosopher.
I only seek to adopt in physics a point of view that need not
be changed the moment our glance is carried over into the domain
of another science; for, ultimately, all must form one whole.
The molecular physics of today certainly does not meet this requirement.
What I say I have probably not been the first to say. I also do
not wish to offer this exposition of mine as a special achievement.
It is rather my belief that every one will be led to a similar
view, who makes a careful survey of any extensive body of knowledge.
Avenarius, with whose works I became acquainted in 1883, approaches
my point of view (Philosophie als Denken des Welt nach dem
Princip des kleinsten Kraftmasses, 1876). Also Hering, in
his paper on Memory (Almanach der Wiener Akademie, 1870,
p. 258; English translation, O. C. Pub. Co., Chicago, 4th edition,
enlarged, 1913), and J. Popper in his beautiful book, Das Rechte
zu leben und die Pflicht zu sterben (Leipzig, 1878, p. 62),
have advanced allied thoughts. Compare also my paper Ueber
die okonomische Natur der physikalis der Forschung (Almanach
der WienerAkadernie, 1882, p. 179, note; English translation
in my Popular Scientific Lectures, Chicago, 1894). Finally
let me also refer here to the introduction to W. Preyer's Reine
Empfindungslehres to Riehl's Freibrurger Antrittsrede,
p. 40, and to R. Wahle's Gehirn und Bewusstsein, 1884.
My views were indicated briefly in 1872 and 1875, and not expounded
at length until 1882 and 1883. I should probably have much additional
matter to cite as more or less allied to this line of thought,
if my knowledge of the literature were more extensive.]
It is precisely in this that the exploration of reality consists.
In this investigation we must not allow ourselves to be impeded
by such abridgments and delimitations as body, ego, matter, spirit,
etc., which have been formed for special, practical purposes and
with wholly provisional and limited ends in view. On the contrary,
the fittest forms of thought must be created in and by that research
itself, just as is done in every special science. In place of
the traditional, instinctive ways of thought, a freer, fresher
view, conforming to developed experience, and reaching out beyond
the requirements of practical life, must be substituted throughout.
14.
Science always has its origin in the adaptation of thought to
some definite field of experience. The results of the adaptation
are thought-elements, which are able to represent the whole field.
The outcome, of course, is different, according to the character
and extent of the field. If the field of experience is enlarged,
or if several fields heretofore disconnected are united, the traditional,
familiar thought-elements no longer suffice for the extended field.
In the struggle of acquired habit with the effort after adaptation,
problems arise, which disappear when the adaptation is perfected,
to make room for others which have arisen meanwhile.
To the physicist, qua physicist, the idea of "body"
is productive of a real facilitation of view, and is not the cause
of disturbance. So, also, the person with purely practical aims,
is materially supported by the idea of the I or ego. For,
unquestionably, every form of thought that has been designedly
or undesignedly constructed for a given purpose, possesses for
that purpose a permanent value. When, however, physics
and psychology meet, the ideas held in the one domain prove to
be untenable in the other. From the attempt at mutual adaptation
arise the various atomic and monadistic theories - which, however,
never attain their end. If we regard sensations, in the sense
above defined (p. 13), as the elements of the world, the problems
referred to appear to be disposed of in all essentials, and the
first and most important adaptation to be consequently effected.
This fundamental view (without any pretension to being a philosophy
for all eternity) can at present be adhered to in all fields of
experience; it is consequently the one that accommodates itself
with the least expenditure of energy, that is, more economically
than any other, to the present temporary collective state of knowledge
Furthermore, in the consciousness of its purely economical function,
this fundamental view is eminently tolerant. It does not obtrude
itself into fields in which the current conceptions are still
adequate. It is also ever ready, upon subsequent extensions of
the field of experience, to give way before a better conception.
The presentations and conceptions of the average man of the world
are formed and dominated, not by the full and pure desire for
knowledge as an end in itself, but by the struggle to adapt himself
favourably to the conditions of life. Consequently they are less
exact, but at the same time also they are preserved from the monstrosities
which easily result from a one-sided and impassioned pursuit of
a scientific or philosophical point of view. The unprejudiced
man of normal psychological development takes the elements which
we have called A B C . . . to be spatially contiguous and external
to the elements K L M. . .. and he holds this view immediately,
and not by any process of psychological projection or logical
inference or construction; even were such a process to exist,
he would certainly not be conscious of it. He sees, then, an "
external world " A B C . . . different from his body K L
M . and existing outside it. As he does not observe at first the
dependence of the A B C's . . . on the K L M's . . . (which are
always repeating themselves in the same way and consequently receive
little attention), but is always dwelling upon the fixed connexion
of the A B C's . . . with one another, there appears to him a
world of things independent of his Ego. This Ego is formed by
the observation of the special properties of the particular thing
K L M . . . with which pain, pleasure, feeling, will, etc., are
intimately connected. Further, he notices things K' L' M', K"
L" M", which behave in a manner perfectly analogous
to K L M, and whose behaviour he thoroughly understands as soon
as he has thought of analogous feelings, sensations, etc., as
attached to them in the same way as he observed these feelings,
sensations, etc., to be attached to himself. The analogy impelling
him to this result is the same as determines him, when he has
observed that a wire possesses all the properties of a
conductor charged with an electric current, except one which has
not yet been directly demonstrated, to conclude that the wire
possesses this one property as well. Thus, since he does not perceive
the sensations of his fellowmen or of animals but only supplies
them by analogy, while he infers from the behaviour of his fellow-men
that they are in the same position over against himself, he is
led to ascribe to the sensations, memories, etc., a particular
A B C . . . K L M . . . of a different nature, always differently
conceived according to the degree of civilisation he has reached;
but this process, as was shown above, is unnecessary, and in science
leads into a maze of error, although the falsification is of small
significance for practical life.
These factors, determining as they do the intellectual outlook
of the plain man, make their appearance alternately in him according
to the requirements of practical life for the time being, and
persist in a state of nearly stable equilibrium. The scientific
conception of the world, however, puts the emphasis now upon one,
now upon the other factor, makes sometimes one and sometimes the
other its starting-point, and, in its struggle for greater precision,
unity and consistency, tries, so far as seems possible, to thrust
into the background all but the most indispensable conceptions.
In this way dualistic and monistic systems arise.
The plain man is familiar with blindness and deafness, and knows
from his everyday experience that the look of things is influenced
by his senses; but it never occurs to him to regard the whole
world as the creation of his senses. He would find an idealistic
system, or such a monstrosity as solipsism, intolerable in practice.
It may easily become a disturbing element in unprejudiced scientific
theorising when a conception which is adapted to a particular
and strictly limited purpose is promoted in advance to be the
foundation of all investigation. This happens, for example,
when all experiences are regarded as " effects " of
an external world extending into consciousness. This conception
gives us a tangle of metaphysical difficulties which it seems
impossible to unravel. But the spectre vanishes at once when we
look at the matter as it were in a mathematical light, and make
it clear to ourselves that all that is valuable to us is the discovery
of functional relations, and that what we want to know
is merely the dependence of experiences or one another. It then
becomes obvious that the reference to unknown fundamental variables
which are not given (things-in-themselves) is purely fictitious
and superfluous. But even when we allow this fiction, uneconomical
though it be, to stand at first, we can still easily distinguish
different classes of the mutual dependence of the elements of
" the facts of consciousness "; and this alone is important
for us.
A B C . . . K L M a b c . . .
K' L' M' ... a' b' c' ..
K" L" M"... a" B" C"
The system of the elements is indicated in the above scheme. Within
the space surrounded by a single line lie the elements which belong
to the sensible world, - the elements whose regular connexion
and peculiar dependence on one another represent both physical
(lifeless) bodies and the bodies of men, animals and plants. All
these elements, again, stand in a relation of quite peculiar dependence
to certain of the elements K L M - the nerves of our body, namely
- by which the facts of sense-physiology are expressed. The space
surrounded by a double line contains the elements belonging to
the higher psychic life, memory-images and presentations, including
those which we form of the psychic life of our fellow-men. These
may be distinguished by accents. These presentations, again, are
connected with one another in a different way (association, fancy)
from the sensational elements A B C . . . K L M; but it cannot
be doubted that they are very closely allied to the latter, and
that in the last resort their behaviour is determined by A B C
. . . K L M (the totality of the physical world), and especially
by our body and nervous system. The presentations a' b' c' of
the contents of the consciousness of our fellow-men play for us
the part of intermediate substitutions, by means of which the
behaviour of our fellow-men, - the functional relation of K' L'
M' to A B C - becomes intelligible, in so far as in and for itself
(physically) it would remain unexplained.
It is therefore important for us to recognise that in all questions
in this connexion, which can be intelligibly asked and which can
interest us, everything turns on taking into consideration different
ultimate variables and different relations of dependence.
That is the main point. Nothing will be changed in the actual
facts or in the functional relations, whether we regard all the
data as contents of consciousness, or as partially so, or as completely
physical.
The biological task of science is to provide the fully developed
human individual with as perfect a means of orientating himself
as possible. No other scientific ideal can be realised, and any
other must be meaningless.
The philosophical point of view of the average man - if that term
may be applied to his naive realism - has a claim to the highest
consideration. It has arisen in the process of immeasurable time
without the intentional assistance of man. It is a product of
nature, and is preserved by nature. Everything that philosophy
has accomplished - though we may admit the biological justification
of every advance, nay, of every error - is, as compared with it,
but an insignificant and ephemeral product of art. The fact is,
every thinker, every philosopher, the moment he is forced to abandon
his one-sided intellectual occupation by practical necessity,
immediately returns to the general point of view of mankind. Professor
X., who theoretically believes himself to be a solipsist, is certainly
not one in practice when he has to thank a Minister of State for
a decoration conferred upon him, or when he lectures to an audience.
The Pyrrhonist who is cudgelled in Moliere's Le Mariage force,
does not go on saying " Il me semble que vous me battez,"
but takes his beating as really received.
Nor is it the purpose of these " introductory remarks "
to discredit the standpoint of the plain man. The task which we
have set ourselves is simply to show why and for what purpose
we hold that standpoint during most of our lives, and why and
for what purpose we are provisionally obliged to abandon it. No
point of view has absolute, permanent validity. Each has importance
only for some given end.
...
Further Reading:
Poincare
Helmholtz
Biography
Philosophy Archive @ marxists.org
|
./articles/Poincaré-Henri/https:..www.marxists.org.reference.subject.philosophy.works.ge.helmholt | <body>
<p class="title">Hermann Helmholtz (1878)</p>
<img src="../../../../../glossary/people/h/pics/helmholtz-hermann.jpg" alt="Hermann Helmholtz" hspace="40" vspace="2" border="0" align="right">
<h4>The Facts of Perception</h4>
<hr class="end">
<p class="information">
<span class="info">Source</span>: <em>The Facts of Perception</em> (1878) from Selected Writings of Hermann Helmholtz, Wesleyan University Press. The Whole speech, barring inrtoductory paragraphs and appendices are repoduced here.</p>
<hr class="end">
<p class="fst">
The problems which that earlier period considered fundamental
to all science were those of the theory of knowledge: <em>What
is true in our sense perceptions and thought? and In what way
do our ideas correspond to reality? </em>Philosophy and the natural
sciences attack these questions from opposite directions, but
they are the common problems of both. Philosophy, which is concerned
with the mental aspect, endeavours to separate out whatever in
our knowledge and ideas is due to the effects of the material
world, in order to determine the nature of pure mental activity.
The natural sciences, on the other hand, seek to separate out
definitions, systems of symbols, patterns of representation, and
hypotheses, in order to study the remainder, which pertains to
the world of reality whose laws they seek, in a pure form. Both
try to achieve the same separation, though each is interested
in a different part of the divided field.</p>
<p>
The natural scientist no more than the philosopher can ignore
epistemological questions when he is dealing with sense perception
or when he is concerned with the fundamental principles of geometry,
mechanics, or physics. Since my work has entered many times into
both the region of science and the region of philosophy, I should
like to attempt to survey what has been done from the side of
the natural sciences to answer the questions which have just been
stated. The laws of thought, after all, are the same for the
scientist as for the philosopher.</p>
<p>
In all cases where the facts of daily experience, which are already
very copious, afford a clear-sighted thinker with a disinterested
sense of the truth sufficient information for making correct judgments,
the scientist must be satisfied to recognise that a methodologically
complete collection of the facts of experience will simply confirm
those judgments, though there are occasionally, of course, some
conflicting cases. This is my excuse (if it must be excused)
for the fact that in general, in the following paper, no completely
new answers - on the contrary, only rather old answers, long since
given to the questions to be dealt with - will be presented to you.
Often enough, of course, even old concepts gain new illumination
and new meaning from newly ascertained facts.</p>
<p>
Shortly before the beginning of the present century, Kant expounded
a theory of that which, in cognition, is prior or antecedent to
all experience; that is, he developed a theory of what he called
the <em>transcendental </em>forms of intuition and thought. These
are forms into which the content of our sensory experience must
necessarily be fitted if it is to be transformed into ideas.
As to the qualities of sensations themselves, Locke had earlier
pointed out the role which our bodily and mental structure or
organisation plays in determining the way things appear to us.
Along this latter line, investigations of the physiology of the
senses, in particular those which Johannes Müller carried
out and formulated in the law of the specific energies of the
senses, have brought (one can almost say, to a completely unanticipated
degree) the fullest confirmation. Further, these investigations
have established the nature of - and in a very decisive manner have
clarified the significance of - the antecedently given subjective
forms of intuition. This subject has already been discussed rather
frequently, so I can begin with it at once today.</p>
<p>
Among the various kinds of sensations, two quite different distinctions
must be noted. The most fundamental is that among sensations
which belong to different senses, such as the differences among
blue, warm, sweet, and high-pitched. In an earlier work I referred
to these as differences in the <em>modality </em>of the sensations.
They are so fundamental as to exclude any possible transition
from one to another and any relationship of greater or less similarity.
For example, one cannot ask whether sweet is more like red or
more like blue.</p>
<p>
The second distinction, which is less fundamental, is that among
the various sensations of the same sense. I have referred to
these as differences in <em>quality. </em>Fichte thought of all
the qualities of a single sense as constituting a <em>circle of
quality; </em>what I have called differences of modality, he designated
differences between circles of quality. Transitions and comparisons
are possible only within each circle; we can cross over from blue
through violet and carmine to scarlet, for example, and we can
say that yellow is more like orange than like blue.</p>
<p>
Physiological studies now teach that. the more fundamental differences
are completely independent of the kind of external agent by which
the sensations are excited. They are determined solely and exclusively
by the nerves of sense which receive the excitations. Excitations
of the optic nerves produce only sensations of light, whether
the nerves are excited by objective light (that is, by the vibrations
in the ether), by electric currents conducted through the eye,
by a blow on the eyeball, or by a strain in the nerve trunk during
the eyes' rapid movements in vision. The sensations which result
from the latter processes are so similar to those caused by objective
light that for a long time men believed it was possible to produce
light in the eye itself. It was Johannes Müller who showed
that internal production of light does not take place and that
the sensation of light exists only when the optic nerve is excited.</p>
<p>
Every sensory nerve, then, when excited by even the most varied
stimuli, produces a sensation only within its own specific circle
of quality. The same external stimulus, therefore, if it strikes
different nerves, produces diverse sensations, which are always
within the circles of quality of the nerves excited. The same
vibrations of the ether which the eye experiences as light, the
skin feels as heat. The same vibrations of the air which the
skin feels as a flutter, the ear hears as sound. In the former
case the differences between the sensations are so great that
physicists once felt justified in postulating two agents, analogous
and in part, equivalent to each other, one of which appears to
us as light and the other as radiant heat. Only later, after
careful, exhaustive experimental investigations, was the complete
similarity of the physical characteristics of these two agents
established.</p>
<p>
Within the circle of quality of each individual sense, where the
nature of the stimulating object determines at least in part the
quality of the resulting sensation, the most unexpected incongruities
have also been found. In this connection a comparison of sight
and hearing is instructive, for the objects of both - light and
sound - are vibrational movements which, depending upon the frequency
of the vibrations, produce sensations of different colours in
vision and differences of pitch in hearing. If, for greater clarity,
we refer to the relationships among the vibrations of <em>light
</em>in terms of the musical intervals formed by <em>sound </em>vibrations,
the following points are evident: The ear is sensitive to about
ten octaves of different tones, while the eye is sensitive to
only a musical sixth. With both sound and light, however, vibrations
exist outside of these ranges, and their physical existence can
be demonstrated.</p>
<p>
In its short scale the eye has only three independent, fundamental
sensations - red, green, and blue-violet - out of which all of the
other colours are formed by various combinations. These three
sensations are combined in vision without being altered or disturbed.
The ear, on the other hand, distinguishes an enormous number
of tones of different pitch, and no one chord sounds exactly like
another made up of different tones. In vision, the same sensation
of white can be produced by combining the red and the green-blue
of the spectrum; or green, red, and violet; or yellow and ultramarine
blue; or green-yellow and violet; or any two, or three, or indeed
all of these combinations together. If the same thing occurred
in hearing, the simultaneous striking of <em>c </em>and f with d
and g, or with e and <em>a, </em>or with <em>c, d, e, f, g, a, </em>and
so on, would all produce the same sound. Thus it should be emphasised,
with reference to the objective significance of colours, that
except for the effect on the eye there is no single objective
combination of colours which can be related invariantly to any
one sensation of colour.</p>
<p>
Finally, consonance and dissonance in music are due entirely to
the phenomenon of beats. These in turn are due to the rapid variations
in the intensity of sound which result when two tones of almost
equal pitch are alternatively in and out of phase, thus causing
first strong and then weak vibrations in any body oscillating
harmonically with them. As a physical phenomenon, beats can be
produced just as readily by the interaction of two trains of light
waves as by the interaction of two trains of sound waves. In
order to be aware of them, however, the nerves would have to be
affected by both wave trains, and the alternations between strong
and weak intensities would have to follow each other at just the
right intervals. In this respect the auditory nerves are greatly
superior to the optic nerves.</p>
<p>
Each fibre among the auditory nerves is sensitive to only a single
tone from a narrow interval of the scale, so that in general only
tones lying close together can interact with one another, while
those at a distance cannot. If the latter do interact, they produce
not beats but an overtone or some combination tone. It is in
connection with these, as you know, that the difference between
harmonic and non-harmonic intervals, that is, between consonance
and dissonance, makes its appearance. In contrast again, every
optic nerve fibre is sensitive to the entire spectrum, although,
to be sure, they are sensitive in different degrees to different
parts of the spectrum. If it were possible to detect by means
of the optic nerves the enormously rapid beats resulting from
the interaction of different vibrations of light, every mixed
colour would appear as a dissonance.</p>
<p>
It is apparent that all these differences among the effects of
light and sound are determined by the way in which the nerves
of sense react. Our sensations are simply effects which are produced
in our organs by objective causes; precisely how these effects
manifest themselves depends principally and in essence upon the
type of apparatus that reacts to the objective causes. What information,
then, can the qualities of such sensations give us about the characteristics
of the external causes and influences which produce them? Only
this: our sensations are signs, not images, of such characteristics.
One expects an image to be similar in some respect to the object
of which it is an image; in a statue one expects similarity of
form, in a drawing similarity of perspective, in a painting similarity
of colour. A sign, however, need not be similar in any way to
that of which it is a sign. The sole relationship between them
is that the same object, appearing under the same conditions,
must evoke the same sign; thus different signs always signify
different causes or influences.</p>
<p>
To popular opinion, which accepts on faith and trust the complete
veridicality of the images which our senses apparently furnish
of external objects, this relationship may seem very insignificant.
In truth it is not, for with it something of the greatest importance
can be accomplished: we can discover the lawful regularities in
the processes of the external world. And natural laws assert that
from initial conditions which are the same in some specific way,
there always follow consequences which are the same in some other
specific way. If the same kinds of things in the world of experience
are indicated by the same signs, then the lawful succession of
equal effects from equal causes will be related to a similar regular
succession in the realm of our sensations. If, for example, some
kind of berry in ripening forms a red pigment and sugar at the
same time, we shall always find a red colour and a sweet taste
together in our sensations of berries of this kind.</p>
<p>
Thus, even if in their qualities our sensations are only signs
whose specific nature depends completely upon our make-up or organisation,
they are not to be discarded as empty appearances. They are still
signs of something - something existing or something taking place - and
given them we can determine the laws of these objects or these
events. And that is something of the greatest importance!</p>
<p>
Thus, our physiological make-up incorporates a pure form of intuition,
insofar as the qualities of sensation are concerned. Kant, however,
went further. He claimed that, not only the qualities of sense
experience, but also space and time are determined by the nature
of our faculty of intuition, since we cannot perceive anything
in the external world which does not occur at some time and in
some place and since temporal location is also a characteristic
of all subjective experience. Kant therefore called time the
a priori and necessary transcendental form of the inner, and space
the corresponding form of the outer, intuition. Further, Kant
considered that spatial characteristics belong no more to the
world of reality (the <em>dinge an sich) </em>than the colours we
see belong to external objects. On the contrary, according to
him, space is carried to objects by our eyes.</p>
<p>
Even in this claim, scientific opinion can go along with Kant
up to a certain point. Let us consider whether any sensible marks
are present in ordinary, immediate experience to which all perception
of objects in space can be related. Indeed, we find such marks
in connection with the fact that our body's movement sets us in
varying spatial relations to the objects we perceive, so that
the impressions which these objects make upon us change as we
move. The impulse to move, which we initiate through the innervation
of our motor nerves, is immediately perceptible. We feel that
we are doing something when we initiate such an impulse. We do
not know directly, of course, all that occurs; it is only through
the science of physiology that we learn how we set the motor nerves
in an excited condition, how these excitations are conducted to
the muscles, and how the muscles in turn contract and move the
limbs. We are aware, however, without any scientific study, of
the perceptible effects which follow each of the various innervations
we initiate.</p>
<p>
The fact that we become aware of these effects through frequently
repeated trials and observations can be demonstrated in many,
many ways. Even as adults we can still learn the innervations
necessary to pronounce the words of a foreign language, or in
singing to produce some special kind of voice formation. We can
learn the innervations necessary to move our ears, to turn our
eyes inward or outward, to focus them upward or downward, and
so on. The only difficulty in learning to do these things is that
we must try to do them by using innervations which are unknown,
innervations which have not been necessary in movement previously
executed. We know these innervations in no form and by no definable
characteristics other than the fact that they produce the observable
effects intended. This alone distinguishes the various innervations
from one another.</p>
<p>
If we initiate an impulse to move - if we shift our gaze, say, or
move our hands, or walk back and forth - the sensations belonging
to some circles of quality (namely, those sensations due to objects
in space) may be altered. Other Psychical states and conditions
that we are aware of in ourselves, however, such as recollections,
intentions, desires, and moods, remain unchanged. In this way
a thoroughgoing distinction may be established in our immediate
experience between the former and the latter. If we use the term
<em>spatial to</em> designate those relations which we can alter
directly by our volition but whose nature may still remain conceptually
unknown to us, an awareness of mental states or conditions does
not enter into spatial relations at all.</p>
<p>
All sensations of external senses, however, must be preceded by
some kind of innervation, that is, they must be spatially determined.
Thus space, charged with the qualities of our sensations of movement,
will appear to us as that through which we move or that about which
we gaze. In this sense spatial intuition is a subjective form
of intuition, just as the qualities of sensation (red, sweet,
cold) are. Naturally, this does not mean that the determination
of the position of a specific object is only an illusion, any
more than the qualities of sensation are.</p>
<p>
From this point of view, space is the necessary form of outer
intuition, since we consider only what we perceive as spatially
determined to constitute the external world. Those things which
are not perceived in any spatial relation we think of as belonging
to the world of inner intuition, the world of self-consciousness.</p>
<p>
Space is an a priori form of intuition, necessarily prior to all
experience, insofar as the perception of it is related to the
possibility of motor volitions, the mental and physical capacity
for which must be provided by our physiological make-up before
we can have intuitions of space.</p>
<p>
There can be no doubt about the relationship between the sensible
signs or marks mentioned above and the changes in our perception
of objects in space which result from our movements. We still
must consider the question, however, whether it is <em>only </em>from
this source that all the specific characteristics of our intuition
of space originate. To this end we must reflect further upon
some of the conclusions concerning perception at which we have
just arrived.</p>
<p>
Let us try to set ourselves back to the state or condition of
a man without any experience at all. In order to begin without
any intuition of space, we must assume that such an individual
no longer recognises the effects of his own innervations, except
to the extent that he has now learned how, by means of his memory
of a first innervation or by the execution of a second one contrary
to the first, to return to the state out of which he originally
moved. Since this mutual self-annulment of different innervations
is completely independent of what is actually perceived, the individual
can discover how to initiate innervations without any prior knowledge
of the external world.</p>
<p>
Let us assume that the man at first finds himself to be just one
object in a region of stationary objects. As long as he initiates
no motor impulses, his sensations will remain unchanged. However,
if he makes some movement (if he moves his eyes or his hands,
for example, or moves forward), his sensations will change. And
if he returns (in memory or by another movement) to his initial
state, all his sensations will again be the same as they were
earlier.</p>
<p>
If we call the entire group of sensation aggregates which can
potentially be brought to consciousness during a certain period
of time by a specific, limited group of volitions the temporary
<em>presentabilia</em> in contrast to the <em>present</em>, that is,
the sensation aggregate within this group which is the object
of immediate awareness - then our hypothetical individual is limited
at any one time to a specific circle of <em>presentabilia, </em>out
of which, however, he can make any aggregate present at any given
moment by executing the proper movement. Every individual member
of this group of <em>presentabilia, therefore,</em> appears to him
to exist at every moment of the period of time, regardless of
his immediate present, for he has been able to observe any of
them at any moment he wished to do so. This conclusion - that he
could have observed them at any other moment of the period if
he had wished - should be regarded as a kind of inductive inference,
since from any moment a successful inference can easily be made
to any other moment of the given period of time.</p>
<p>
In this way the idea of the simultaneous and continuous existence
of a group of different but adjacent objects may be attained.
<em>Adjacent </em>is a term with spatial connotations, but it is
legitimate to use it here, since we have <em>used spatial </em>to
define those relations which can be changed by volition. Moreover,
we need not restrict the term <em>adjacent </em>so that it refers
only to material objects. For example, it can legitimately be
said that "to the right it is bright, to the left dark,"
and "forward there is opposition, behind there is nothing,"
in the case where "right" and "left" are only
names for specific movements of the eyes and "forward"
and "behind" for specific movements of the hands.</p>
<p>
At other times the circles of <em>presentabilia </em>related to
this same group of volitions are different. In this way circles
of <em>presentabilia, </em>along with their individual members,
come to be something given to us, that is, they come to be <em>objects.
</em>Those changes which we are able to bring about or put an
end to by familiar acts of volition come to be separated from
those which do not result from and cannot be set aside by such
acts. This last statement is negative: in Fichte's quite appropriate
terminology, the Non-Ego forces the recognition that it is distinct
from the Ego.</p>
<p>
When we inquire into the empirical conditions under which our
intuition of space is formed, we must concentrate in particular
upon the sense of touch, for the blind can form complete intuitions
of space without the aid of vision. Even if space turns out to
be less rich in objects for them than for people with vision,
it seems highly improbable that the foundation of the intuition
of space is completely different for the two classes of people.
If, in the dark or with our eyes closed, we try to perceive only
by touch, we are definitely able to feel the shapes of the objects
lying around us, and we can determine them with accuracy and certainty.
Moreover, we are able to do this with just one finger or even
with a pencil held in the hand the way a surgeon holds a probe.
Ordinarily, of course, if we want to find our way about in the
dark we touch large objects with five or ten fingertips simultaneously.
In this way we get from five to ten times as much information
in a given period of time as we do with one finger. We also use
the fingers to measure the sizes of objects, just as we measure
with the tips of an open pair of compasses.</p>
<p>
It should be emphasised that with the sense of touch, the fact
that we have an extended skin surface with many sensitive points
on it is of secondary importance. What we are able to <strong>find
</strong>out, for example, about the impression on a medal by the sensations
in the skin when our hand is stationary is very slight and crude
in comparison with what we can discover even with the tip of a
pencil when we move our hand. With the sense of sight, perception
is more complicated due to the fact that besides the most sensitive
spot on the retina, the <em>fovea central, </em>or pit, which in
vision rushes as it were about the visual field, there are also
a great many other sensitive points acting at the same time and
in a much richer way than is the case with the sense of touch.</p>
<p>
It is easy to see that by moving our fingers over an object, we
can learn the sequences in which impressions of it present themselves
and that these sequences are unchanging, regardless which finger
we use. Further, these are not single-valued or fixed sequences,
whose elements must always be covered, either forward or backward,
in the same order. They are not linear sequences; on the contrary,
they form a plane coextension or, using Riemann's terminology,
a manifold of the second order. The fingers are moved over a
surface by means of motor impulses which differ from those necessary
to carry them from one point on the surface to another, and different
surfaces require different movements for the fingers to glide
over them. Consequently, the space in which the fingers move
requires a manifold of a higher order than that of a surface;
the third dimension must be introduced.</p>
<p>
Three dimensions are sufficient, however, for all our experience,
since a closed surface completely divides space as we know it.
Moreover, substances in a gaseous or fluid state, which are not
dependent at all on the nature of man's mental faculties, cannot
escape from a completely closed surface. And, just as a continuous
line can enclose only a surface and not a space - that is, a spatial
form of two and not of three dimensions - so a surface can enclose
only a space of three and not of four dimensions.</p>
<p>
It is thus that our knowledge of the spatial arrangement of objects
is attained. Judgments concerning their size result from observations
of the congruence of our hand with parts or points of an object's
surface, or from the congruence of the retina with parts or points
of the retinal image.</p>
<p>
A strange consequences characteristic of the ideas in the minds
of individuals with at least some experience - follows from the
fact that the perceived spatial ordering of things originates
in the sequences in which the qualities of sensations are presented
by our moving sense organs: the objects in the space around us
appear to possess the qualities of our sensations. They appear
to be red or green, cold or warm, to have an odour or a taste,
and so on. Yet these qualities of sensations belong only to our
nervous system and do not extend at all into the space around
us. Even when we know this, however, the illusion does not cease,
for <em>it is the primary and fundamental truth. The</em> illusion
is quite simply the sensations which are given to us in spatial
order to begin with.</p>
<p>
You can see how the most fundamental properties of our spatial
intuition can be obtained in this way. Commonly, however, an
intuition is taken to be something which is simply given, something
which occurs without reflection or effort, something which above
all cannot be reduced to other mental processes. This popular
interpretation, at least insofar as the intuition of space is
concerned, is due in part to certain theorists in physiological
optics and in part to a strict adherence to the philosophy of
Kant. As is well known, Kant taught, not only that the general
form of the intuition of space is given transcendentally, but
also that this form possesses, originally and prior to a possible
experience, certain more specific characteristics which are commonly
given expression in the axioms of geometry. These axioms may
be reduced to the following propositions:</p>
<p class="indentb">
1. Between two points there is only one possible shortest line.
We call such a line <em>straight.</em></p>
<p class="indentb">
2. A plane is determined by three points. A plane is a surface
which contains completely any straight line between any two of
its points.</p>
<p class="indentb">
3. Through any point there is only one possible line parallel
to a given straight line. Two straight lines are parallel if
they lie in the same plane and do not intersect upon any finite
extension.</p>
<p>
Kant used the alleged fact that these propositions of geometry
appear to us necessarily true, along with the fact that we cannot
imagine or represent to ourselves any irregularities in spatial
relations, as direct proof that the axioms must be given prior
to all experience. It follows that the conception of space contained
in them or implied by them must also constitute a transcendental
form of intuition independent of all experience.</p>
<p>
I would like to emphasise here, in connection with the controversies
which have sprung up during the past few years as to whether the
axioms of geometry are transcendental or empirical propositions,
that this question is absolutely different from the one mentioned
earlier, namely, whether space in general is a transcendental
form of intuition or not.</p>
<p>
Our eyes see everything in the field of vision as a number of
colored plane surfaces. That is their form of intuition. However,
the particular colours that appear at any one time, the relationships
among them, and the order in which they appear are the effects
of external causes and are not determined by any law of our organisation.
Equally, the fact that space is a form of intuition implies just
as little concerning the facts which are expressed by the axioms.
If these axioms are not empirical propositions but rather pertain
to a necessary form of intuition, this is a further and quite
specific characteristic of the general form, and the same reasoning
which was used to establish that the general form of intuition
of space is transcendental is not necessarily sufficient to establish
that the axioms also have a transcendental origin.</p>
<p>
In his assertion that it is impossible to conceive of spatial
relations which contradict the axioms of geometry, as well as
in his general interpretation of intuition as a simple, irreducible
mental process, Kant was influenced by the mathematics and the
physiology of the senses of his time.</p>
<p>
In order to try to conceive of something which has never been
seen before, it is necessary to know how to imagine in detail
the series of sense impressions which, in accordance with well-known
laws, would be experienced if the thing in question - and any changes
in it - were actually perceived by any of the sense organs from
all possible positions. Further, these impressions must be such
that all possible interpretations of them except one can be eliminated.
If these series of sense impressions can be specified completely
and uniquely in this way, then in my opinion one must admit that
the object clearly is conceivable.</p>
<p>
Since by hypothesis the object has never been observed before,
no previous experience can come to our aid and guide our imagination
to the required series of impressions. Such guidance can be provided
only by the concepts of the objects and relationships to be represented.
Such concepts are first developed analytically as much as is
necessary for the investigation at hand. Indeed, the concepts
of spatial forms to which nothing in ordinary experience corresponds
can be developed with certainty only by the use of analytic geometry.
It was Gauss who, in 1828 in his treatise on the curvature of
surfaces, first presented the analytical tools necessary for the
solution of the present problem, the tools which Riemann later
used to establish the logical possibility of his system of geometry.
These investigations have been called, not improperly, meta-mathematical.</p>
<p>
Furthermore, in 1829 and in 1840 Lobachevsky, using the ordinary,
intuitive, synthetic method, developed a geometry without the
axiom of parallels which is in complete agreement with the corresponding
parts of the new analytical investigations. Beltrami has given
us a method for representing meta-mathematical spaces in parts
of Euclidean space, a method by which it is possible to imagine
the appearance of such spaces in perspective vision with relative
ease. Finally, Lipschitz has pointed out how the general principles
of mechanics can be transferred to such spaces, so that the series
of sense impressions which would occur in them can be specified
completely. Thus, in my opinion, the conceivability of such spaces
in the sense just indicated has been established.</p>
<p>
There is considerable disagreement, however, on this issue. For
a demonstration of conceivability I require only that, for every
means of observation, the corresponding sense impressions be sketched
out clearly and unambiguously, if necessary with the aid of scientific
knowledge of the laws of these methods of observation. To anyone
who knows these laws, the objects or relationships to be represented
seem almost real. Indeed, the task of representing the various
spatial relationships of meta-mathematical spaces requires training
in the understanding of analytical methods, perspective constructions,
and optical phenomena.</p>
<p>
This, however, goes counter to the older conception of intuition,
according to which only those things whose ideas come instantly - that
is, without reflection and effort - to consciousness along with
the sense impressions are to be regarded as given through intuition.
It is true that our attempts to represent meta-mathematical spaces
do not have the effortlessness, speed, or immediate clarity of
our perceptions of, say, the shape of a room which we enter for
the first time or of the arrangement and shape of the objects
in it, the materials out of which they are made, and many other
things. If this kind of immediate evidence is really a fundamental,
necessary characteristic of an intuition, we cannot rightly claim
the conceivability of meta-mathematical spaces.</p>
<p>
But upon further consideration we find that there are a large
number of experiences which show that we can develop speed and
certainty in forming specific ideas after receiving specific sense
impressions, even in cases where there are no natural connections
between the ideas and the impressions. One of the most striking
examples of this is learning a native language. Words are arbitrarily
or accidentally selected signs, and in every language they are
different. Knowledge of these signs is not inherited; to a German
child who has been raised among French-speaking people and who
has never heard German spoken, it is a foreign language. A child
learns the meanings of words and sentences only by examples of
their use; and before he understands the language, it is impossible
to make intelligible to him the fact that the sounds he hears
are signs which have meaning. Finally, however, after he has
grown up, he understands these words and sentences without reflection,
without effort, and without knowing when, where, or through what
examples he learned them. He understands the most subtle shifts
in their meaning, shifts which are often so subtle that any attempt
to define them logically could be carried out only with difficulty.</p>
<p>
It is not necessary for me to add further examples; our daily
life is more than rich enough in them. Art, most clearly poetry
and the plastic arts, is based directly upon such experiences.
The highest kind of perception, that which we find in the artist's
vision, is an example of this same basic kind of understanding,
in this case the understanding of new aspects of man and nature.
Among the traces which frequently repeated perceptions leave
behind in the memory, the ones conforming to law and repeated
with the greatest regularity are strengthened, while those which
vary accidentally are obliterated. In a receptive, attentive
observer, intuitive images of the characteristic aspects of the
things that interest him come to exist; afterward he knows no
more about how these images arose than a child knows about the
examples from which he learned the meanings of words. That an
artist has beheld the truth follows from the fact that we too
are seized with the conviction of truth when he leads us away
from currents of accidentally related qualities. An artist is
superior to us in that he knows how to find the truth amid all
the confusion and chance events of daily experience.</p>
<p>
So much to remind ourselves how effective these mental processes
are, from the lowest to the highest reaches of our intellectual
life. In some of my earlier works I called the connections of
ideas which take place in these proc<em>esses unconscious inferences.
</em>These inferences are unconscious insofar as their major premise
is not necessarily expressed in the form of a proposition; it
is formed from a series of experiences whose individual members
have entered consciousness only in the form of sense impressions
which have long since disappeared from memory. Some fresh sense
impression forms the minor premise, to which the rule impressed
upon us by previous observations is applied. Recently I have
refrained from using the phrase <em>unconscious inference in</em>
order to avoid confusion with what seems to me a completely obscure
and unjustified idea which Schopenhauer and his followers have
designated by the same name. Obviously we are concerned here
with the elementary processes which are the real basis of all
thought, even though they lack the critical certainty and refinement
to be found in the scientific formation of concepts and in the
individual steps of scientific inferences.</p>
<p>
Returning now to the question of the origin of the axioms of geometry,
our lack of facility in developing ideas of meta-mathematical
spatial relations because of insufficient experience cannot be
used validly as an argument against their conceivability. On
the contrary, these spatial relations are completely conceivable.
Kant's proof of the transcendental nature of the geometrical
axioms is therefore untenable. Indeed, investigation of the facts
of experience shows that the axioms of geometry, taken in the
only sense in which they can be applied to the external world,
are subject to proof or disproof by experience.</p>
<p>
The memory traces of previous experience play an even more extensive
and influential role in our visual observations. An observer
who is not completely inexperienced receives without moving his
eyes (this condition can be realised experimentally by using the
momentary illumination of an electric discharge or by carefully
and deliberately staring) images of the objects in front of him
which are quite rich in content. We can easily confirm with our
own eyes, however, that these images are much richer and especially
much more precise if the gaze is allowed to move about the field
of vision, in this way making use of the kind of spatial observations
which I have previously described as the most fundamental. Indeed,
we are so used to letting our eyes wander over the objects we
are looking at that considerable practice is required before we
succeed in making them - for purposes of research in physiological
optics - fix on a point without wandering.</p>
<p>
In my work on physiological optics I have tried to explain how
our knowledge of the <strong>field </strong>open to vision is gained from
visual images experienced as we move our eyes, given that there
are some perceptible differences of location on the retina among
otherwise qualitatively similar sensations. Following Lotze's
terminology, these spatially different retinal sensations were
called <em>local signs. </em>It is not necessary to know prior
to visual experience that these signs are local signs, that is,
that they are related to various objective differences in place.
The fact that people blind from birth who afterward gain their
sight by an operation cannot, before they have touched them, distinguish
between such simple forms as a circle and a square by the use
of their eyes has been confirmed even more fully by recent studies.</p>
<p>
Investigations in physiology show that with the eyes alone we
can achieve rather precise and reliable comparisons of various
lines and angles in the field of vision, provided that through
the eyes' normal movements the images of these figures can be
formed quickly one after another on the retina. We can even estimate
the actual size and distance of objects which are not too far
away from us with considerable accuracy by means of changing perspectives
in our visual field, although making such judgments in the three
dimensions of space is much more complicated than it is in the
case of a plane image. As is well known, one of the greatest
difficulties in drawing is being able to free oneself from the
influence which the idea of the true size of a perceived object
involuntarily has upon us. These are all facts which we would
expect if we obtain our knowledge of local signs through experience.
We can learn the changing sensory signs of something which remains
objectively constant much more easily and reliably than we can
the signs of something which changes with every movement of the
body, as perspective images do.</p>
<p>
To a great many physiologists, however, whose point of view we
shall call nativistic, in contrast to the empirical position which
I have sought to defend, the idea that knowledge of the field
of vision is acquired is unacceptable. It is unacceptable to
them because they have not made clear to themselves what even
the example of learning a language shows so clearly, namely, how
much can be explained in terms of the accumulation of memory impressions.
Because of this lack of appreciation of the power of memory,
a number of different attempts have been made to account for at
least part of visual perception through innate mechanisms by means
of which specific sensory impressions supposedly induce specific
innate spatial ideas. In an earlier work I tried to show that
all hypotheses of this kind which had been formulated were insufficient,
since cases were always being discovered in which our visual perceptions
are more precisely in agreement with reality than is stated in
these hypotheses. With each of them we are forced to the additional
assumption that ultimately experience acquired during movement
may very well prevail over the hypothetical inborn intuition and
thus accomplish in opposition to it what, according to the empirical
hypothesis, it would have accomplished without such a hindrance.</p>
<p>
Thus nativistic hypotheses concerning knowledge of the field of
vision explain nothing. In the first place, they only acknowledge
the existence of the facts to be explained, while refusing to
refer these facts to well-confirmed mental processes which even
they must rely on in certain cases. In the second place, the
assumption common to all nativistic theories - that ready-made ideas
of objects can be produced by means of organic mechanisms - appears
much more rash and questionable than the assumption of the empirical
theory that the non-cognitive materials of experience exist as
a result of external influences and that all ideas are formed
out of these materials according to the laws of thought.</p>
<p>
In the third place, the nativistic assumptions are unnecessary.
The single objection that can be raised against the empirical
theory concerns the sureness of the movements of many newborn
or newly hatched animals. The smaller the mental endowment of
these animals, the sooner they learn how to do all that they are
capable of doing. The narrower the path on which their thoughts
must travel, the easier they find their way. The newborn human
child, on the other hand, is at first awkward in vision; it requires
several days to learn to judge by its visual images the direction
in which to turn its head in order to reach its mother's breast.</p>
<p>
The behaviour of young animals is, in general, quite independent
of individual experience. Whatever these instincts are which
guide them - whether they are the direct hereditary transmission
of their parents' ideas, whether they have to do only with pleasure
and pain, or whether they are motor impulses related to certain
aggregates of experience - we do not know. In the case of human
beings the last phenomenon is becoming increasingly well understood.
Careful and critically employed investigations are most urgently
needed on this whole subject.</p>
<p>
Arrangements such as those which the nativistic hypotheses assume
can at best have only a certain pedagogical value; that is, they
may facilitate the initial understanding of uniform, lawful relations.
And the empirical position is, to be sure, in agreement with
the nativistic on a number of points - for example, that local signs
of adjacent places on the retina are more similar than those farther
apart and that the corresponding points on the two retina are
more similar than those that do not correspond. For our present
purposes, however, it is sufficient to know that complete spatial
intuition can be achieved by the blind and that for people with
vision, even if the nativistic hypotheses should prove partially
correct, the final and most exact determinations of spatial relations
are obtained through observations made while moving in various
ways.</p>
<p>
I should like, now, to return to the discussion of the most fundamental
facts of perception. As we have seen, we not only have changing
sense impressions which come to us without our doing anything;
we also perceive while we are being active or moving about. In
this way we acquire knowledge of the uniform relations between
our innervations and the various aggregates of impressions included
in the circles of <em>presentabilia. </em>Each movement we make
by which we alter the appearance of objects should be thought
of as an experiment designed to test whether we have understood
correctly the invariant relations of the phenomena before us,
that is, their existence in definite spatial relations.
</p><p>
The persuasive force of these experiments is much greater than
the conviction we feel when observations are carried out without
any action on our part, for with these experiments the chains
of causes run through our consciousness. One factor in these
causes is our volitions, which are known to us by an inner intuition;
we know, moreover, from what motives they arise. In these volitions
originates the chain of physical causes which results in the final
effect of the experiment, so we are dealing with a process passing
from a known beginning to a known result. The two essential conditions
necessary for the highest degree of conviction are (1) that our
volitions not be determined by the physical causes which simultaneously
determine the physical processes and (2) that our volitions not
influence psychically the resulting perceptions.</p>
<p>
These last points should be considered more fully. The volition
for a spe<strong>cific </strong>movement is a psychic act, and the perceptible
change in sensation which results from it is also a psychic event.
is it possible for the first to bring about the second by some
purely mental process? It is certainly not absolutely impossible.
Whenever we dream, something similar to this takes place.</p>
<p>
While dreaming we believe that we are executing some movement,
and then we dream further that the natural results of this movement
occur. We dream that we climb into a boat, shove it off from
shore, guide it over the water, watch the surrounding objects
shift position, and so on. In cases like this it seems to the
dreamer that he sees the consequences of his actions and that
the perceptions in the dream are brought about by means of purely
Psychical processes. Who can say how long and how finely spun,
how richly elaborated, such dreams may be! If everything in dreams
were to occur in ultimate accordance with the laws of nature,
there would be no distinction between dreaming and waking, except
that the person who is awake may break off the series of impressions
he is experiencing.</p>
<p>
I do not see how a system of even the most extreme subjective
idealism, even one which treats life as a dream, can be refuted.
One can show it to be as improbable, as unsatisfactory as possible
(in this connection I concur with the severest expressions of
condemnation), but it can be developed in a logically consistent
manner, and it seems to me important to keep this in mind. How
ingeniously Calderon carried out this theme in <em>Life Is a Dream
</em>is well known.</p>
<p>
Fichte also believed and taught that the Ego constructs the Non-Ego,
that is, the world of phenomena, which it requires for the development
of its Psychical activities. His idealism is to be distinguished
from the one mentioned above, however, by the fact that he considered
other individuals not to be dream images but, on the basis of
moral laws, to be other Egos with equal reality. Since the images
by which all these Egos represent the Non-Ego must be in agreement,
he considered all the individual Egos to be part of or emanations
from an Absolute Ego. The world in which they find themselves
is the conceptual world which the World Spirit constructs. From
this a conception of reality results similar to that of Hegel.</p>
<p>
The realistic hypothesis, on the other hand, accepts the evidence
of ordinary personal experience, according to which the changes
in perception which result from an act have more than a mere psychical
connection with the antecedent volition. It accepts what seems
to be established by our daily perception, that is, that the material
world about us exists independently of our ideas. Undoubtedly
the realistic hypothesis is the simplest that can be formulated.
It is based upon and confirmed by an extraordinarily large number
of cases. It is sharply defined in all specific instances and
is therefore unusually useful and fruitful as a foundation for
behaviour.</p>
<p>
Even if we take the idealistic position, we can hardly talk about
the lawful regularity of our sensations other than by saying:
"Perceptions occur as if the things of the material world
referred to in the realistic hypothesis actually did exist."
We cannot eliminate the "as if" construction completely,
however, for we cannot consider the realistic interpretation to
be more than an exceedingly useful and practical hypothesis.
We cannot assert that it is necessarily true, for opposed to it
there is always the possibility of other irrefutable idealistic
hypotheses.</p>
<p>
It is always well to keep this in mind in order not to infer from
the facts more than can rightly be inferred from them. The various
idealistic and realistic interpretations are metaphysical hypotheses
which, as long as they are recognised as such, are scientifically
completely justified. They may become dangerous, however, if
they are presented as dogmas or as alleged necessities of thought.
Science must consider thoroughly all admissible hypotheses in
order to obtain a complete picture of all possible modes of explanation.
Furthermore, hypotheses are necessary to someone doing research,
for one cannot always wait until a reliable scientific conclusion
has been reached; one must sometimes make judgments according
to either probability or aesthetic or moral feelings. Metaphysical
hypotheses are not to be objected to here either. A thinker is
unworthy of science, however, if he forgets the hypothetical origin
of his assertions. The arrogance and vehemence with which such
hidden hypotheses are sometimes defended are usually the result
of a lack of confidence which their advocates feel in the hidden
depths of their minds about the qualifications of their claims.</p>
<p>
What we unquestionably can find as a fact, without any hypothetical
element whatsoever, is the lawful regularity of phenomena. From
the very first, in the case where we perceive stationary objects
distributed before us in space, this perception involves the recognition
of a uniform or law-like connection between our movements and
the sensations which result from them. Thus even the most elementary
ideas contain a mental element and occur in accordance with the
laws of thought. everything that is added in intuition to the
raw materials of sensation may be considered mental, provided
of course that we accept the extended meaning of <em>mental </em>discussed
earlier.</p>
<p>
If "to conceive" means "to form concepts,"
and if it is true that in a concept we gather together a class
of objects which possess some common characteristic, then it follows
by analogy that the concept of some phenomenon which changes in
time must encompass that which remains the same during that period
of time. As Schiller said, the wise man</p>
<p class="quoteb">
Seeks for the familiar law amidst the awesome multiplicity of
accidental occurrences,<br>
Seeks for the eternal Pole Star amidst the constant flight of
appearances.
</p>
<p>
That which, independently of any and everything else, remains
the same during all temporal changes, we call a <em>substance;
</em>the invariant relation between variable but related quantities
we call a <em>law. </em>We perceive only the latter directly.
Knowledge of substances can be attained only through extensive
investigation, and as further investigation is always possible,
such knowledge remains open to question. At an earlier time both
light and heat were thought to be substances; later it turned
out that both were only transitory forms of motion. We must therefore
always be prepared for some new analysis of what are now known
as the chemical elements.</p>
<p>
The first product of the rational conception of phenomena is its
lawfulness or regularity. If we have fully investigated some
regularity, have established its conditions completely and with
certainty and, at the same time, with complete generality, so
that for all possible subsequent cases the effect is unequivocally
determined - and if we have therefore arrived at the conviction
that the law is true and will continue to hold true at all times
and in all cases - then we recognise it as something existing independently
of our ideas, and we label it a <em>cause, </em>or that which underlies
or hes behind the changes taking place. (Note that the meaning
I give to the word <em>cause </em>and its application are both exactly
specified, although in ordinary language the word is also variously
used to mean antecedent or motive.)</p>
<p>
Insofar as we recognise a law as a power analogous to our will,
that is, as something giving rise to our perceptions as well as
determining the course of natural processes, we call it a <em>force.
</em>The idea of a force acting in opposition to us arises directly
out of the nature of our simplest perceptions and the way in which
they occur. From the beginning of our lives, the changes which
we cause ourselves by the acts of our will are distinguished from
those which are neither made nor can be set aside by our will.
Pain, in particular, gives us the most compelling awareness of
the power or force of reality. The emphasis falls here on the
observable fact that the perceived circle of <em>presentabilia</em>
is not created by a conscious act of our mind or will. Fichte's
<em>Non-Ego </em>is an apt and precise expression for this. In
dreaming, too, that which a person believes he sees and feels
does not appear to be called forth by his will or by the known
relations of his ideas, for these also may often be unconscious.
They constitute a Non-Ego for the dreamer too. It is the same
for the idealists who see the Non-Ego as the world of ideas of
the World Spirit.</p>
<p>
We have in the German language a most appropriate word for that
which stands behind the changes of phenomena and acts, namely,
"the real". This word implies only action; it lacks
the collateral meaning of existing as substance, which the concept
of "the actual" or "the essential" includes.
In the concept of "the objective"<em>, </em>on the other
hand, the notion of the complete form of objects is introduced,
something that does not correspond to anything in our most basic
perceptions. In the case of the logically consistent dreamer,
it should be noted, we must use the words "effective"
and "real" to characterise those Psychical conditions
or motives whose sensations correspond uniformly to, and which
are experienced as the momentary states of, his dreamed world.</p>
<p>
In general, it is clear that a distinction between thought and
reality is possible only when we know how to make the distinction
between that which the ego can and that which it cannot change.
This, however, is possible only when we know the uniform consequences
which volitions have in time. From this fact it can be seen that
conformity to law is the essential condition which something must
satisfy in order to be considered real.</p>
<p>
I need not go into the fact that it is a <em>contradictio in abjecto
</em>to try to present the actual or Kant's <em>ding an sich </em>in
positive statements without comprehending it within our forms
of representation. This fact has been pointed out often enough
already. What we can attain, however, is knowledge of the lawful
order in the realm of reality, since this can actually be presented
in the sign system of our sense impressions.</p>
<p class="quoteb">
All things transitory<br>
But as symbols are sent. [<em>Faust</em>]
</p><p>
I take it to be a propitious sign that we find Goethe with us
here, as well as further along on this same path. Whenever we
are dealing with a question requiring a broad outlook, we can
trust completely his clear, impartial view as to where the truth
lies. He demanded of science that it be only an artistic arrangement
of facts and that it form no abstract concepts concerning them,
for he considered abstract concepts to be empty names which only
hide the facts. In somewhat the same sense, Gustav Kirchhoff
has recently stated that the task of the most abstract of the
natural sciences, mechanics, is to describe completely and in
the simplest possible way the kinds of motion appearing in nature.</p>
<p>
As to the question whether abstract concepts hide the facts or
not, this indeed happens if we remain in the realm of abstract
concepts and do not examine their factual content, that is, if
we do not try to make clear what new and observable invariant
relations follow from them. A correctly formulated hypothesis,
as we observed a moment ago, has its empirical content expressed
in the form of a general law of nature. The hypothesis itself
is an attempt to rise to more general and more comprehensive uniformities
or regularities. Anything new, however, that an hypothesis asserts
about facts must be established or confirmed by observation and
experiment. Hypotheses which do not have such factual reference
or which do not lead to trustworthy, unequivocal statements concerning
the facts falling under them should be considered only worthless
phrases.</p>
<p>
Every reduction of some phenomenon to underlying substances and
forces indicates that something unchangeable and final has been
found. We are never justified, of course, in making an unconditional
assertion of such a reduction. Such a claim is not permissible
because of the incompleteness of our knowledge and because of
the nature of the inductive inferences upon which our perception
of reality depends.</p>
<p>
Every inductive inference is based upon the belief that some given
relation, previously observed to be regular or uniform, will continue
to hold in all cases which may be observed. In effect, every
inductive inference is based upon a belief in the lawful regularity
of everything that happens. This uniformity or lawful regularity,
however, is also the condition of conceptual understanding. Thus
belief in uniformity or lawful regularity is at the same time
belief in the possibility of understanding natural phenomena conceptually.
If we assume that this comprehension or understanding of natural
phenomena can be achieved - that is, if we believe that we shall
be able to discern something fundamental and unchanging which
is the cause of the changes we observe - then we accept a regulative
principle in our thinking. It is called the law of causality,
and it expresses our belief in the complete comprehensibility
of the world.</p>
<p>
Conceptual understanding, in the sense in which I have just described
it, is the method by which the world is submitted to our thoughts,
facts are ordered, and the future predicted. It is our right
and duty to extend the application of this method to all occurrences,
and significant results have already been achieved in this way.
We have no justification other than its results, however, for
the application of the law of causality. We might have lived
in a world in which every atom was different from every other
one and where nothing was stable. In such a world there would
be no regularity whatsoever, and our conscious activities would
cease.</p>
<p>
The law of causality is in reality a transcendental law, a law
which is given a priori. It is impossible to prove it by experience,
for, as we have seen, even the most elementary levels of experience
are impossible without inductive inferences, that is, without
the law of causality. And even if the most complete experience
should teach us that everything previously observed has occurred
uniformly - a point concerning which we are not yet certain - we could
conclude only by inductive inferences, that is, by presupposing
the law of causality, that the law of causality will also be valid
in the future. We can do no more than accept the proverb, "Have
faith and keep on!"</p>
<p class="quoteb">
The earth's inadequacies<br>
Will then prove fruitful. [<em>Faust</em>]
</p>
<p>
That is the answer we must give to the question: what is true
in our ideas? In giving this answer we find ourselves at the
foundation of Kant's system and in agreement with what has always
seemed to me the most fundamental advance in his philosophy.</p>
<p>
I have frequently noted in my previous works the agreement between
the more recent physiology of the senses and Kant's teachings.
I have not meant, of course, that I would swear <em>in verbs magistri
</em>to all his more minor points. I believe that the most fundamental
advance of recent times must be judged to be the analysis of the
concept of intuition into the elementary processes of thought.
Kant failed to carry out this analysis or resolution; this is
one reason why he considered the axioms of geometry to be transcendental
propositions. It has been the physiological investigations of
sense perception which have
led us to recognise the most basic or elementary kinds of judgment,
to inferences which are not expressible in words. These judgments
or inferences will, of course, remain unknown and inaccessible
to philosophers as long as they inquire only into knowledge expressed
in language.</p>
<p>
Some philosophers who retain an inclination toward metaphysical
speculation consider what we have treated as a defect in Kant's
system, resulting from the lack of progress of the special sciences
in his time, to be the most fundamental part of his philosophy.
Indeed, Kant's proof of the possibility of metaphysics, the alleged
science he did nothing further to develop, rests completely upon
the belief that the axioms of geometry and the related principles
of mechanics are transcendental propositions, given a priori.
As a matter of fact, however, Kant's entire system really conflicts
with the possibility of metaphysics, and the more obscure points
in his theory of knowledge, over which so much has been argued,
stem from this conflict.</p>
<p>
Be that as it may, the natural sciences have a secure, well-established
foundation from which they can search for the laws of reality,
a wonderfully rich and fertile field of endeavour. As long as
they restrict themselves to this search, they need not be troubled
with any idealistic doubts. Such work will, of course, always
seem modest to some people when compared to the high-flown designs
of the metaphysicians.</p>
<p class="quoteb">
For with Gods must<br>
Never a mortal<br>
Measure himself.<br>
If he mounts upwards,<br>
Till his head<br>
Touch the star-spangled heavens,<br>
His unstable feet<br>
Feel no ground beneath them;<br>
Winds and wild storm-clouds<br>
Make him their plaything;-<br>
Or if, with sturdy,<br>
Firm-jointed bones, he<br>
Treads the solid, unwavering<br>
Floor of the earth; yet<br>
Reaches he not<br>
Commonest oaks, nor<br>
E'en with the vine may<br>
Measure his greatness. [Goethe, <em>The Limits of Man</em>]
</p>
<p>
The author of this poem has provided us with a model of a man
who still retains clear eyes for the truth and for reality, even
when he touches the stars with the crown of his head. The true
scientist must always have something of the vision of an artist,
something of the vision which led Goethe and Leonardo da Vinci
to great scientific thoughts. Both artists and scientists strive,
even if in different ways, toward the goal of discovering new
uniformities or lawful regularities. But one must never produce
idle swarms and mad fantasies in place of artistic vision. The
true artist and the true scientist both know how to work steadily
and how to give their work a convincing, truthful form.</p>
<p>
Moreover, reality has always unveiled the truth of its laws to
the sciences in a much richer, more sublime fashion than she has
painted it for even the most consummate efforts of mystical fantasy
and metaphysical speculation. What have all the monstrous offspring
of indiscreet fancy, heapings of gigantic dimensions and numbers,
to say of the reality of the universe, of the period of time during
which the sun and earth were formed, or of the geological ages
during which life evolved, adapting itself always in the most
thoroughgoing way to the increasingly more moderate physical conditions
of our planet?</p>
<p>
What metaphysics has concepts in readiness to explain the effects
of magnetic and induced electrical forces upon each other - effects
which physics is now struggling to reduce to well-established
elementary forces, without having reached any clear solution?
Already, however, in physics light appears to be nothing more
than another form of movement of these two agents, and the ether
(the electrical and magnetic medium which pervades all space)
has come to have completely new characteristics or properties.</p>
<p>
And in what schema of scholastic concepts shall we put the store
of energy capable of doing work, whose constancy is stated in
the law of the conservation of energy and which, indestructible
and incapable of increase like a substance, is acting as the motive
power in every movement of inanimate as well as animate materials
store of energy which is neither mind nor matter, yet is like
a Proteus, clothing itself always in new forms; capable of acting
throughout infinite space, yet not infinitely divisible like space;
the effective cause of every effect, the mover in every movement?
Did the poet have a notion of it?</p>
<p class="quoteb">
In the tides of Life, in Action's storm, A fluctuant wave,<br>
A shuttle free,<br>
Birth and the Grave, An eternal sea,<br>
A weaving, flowing<br>
Life, all-glowing,<br>
Thus at Time's humming loom't is my hand prepares<br>
The garment of Life which the Deity wears ! [<em>Faust</em>]
</p>
<p>
We are particles of dust on the surface of our planet, which is
itself scarcely a grain of sand in the infinite space of the universe.
We are the youngest species among the living things of the earth,
hardly out of the cradle according to the time reckoning of geology,
still in the learning stage, hardly half-grown, said to be mature
only through mutual agreement. Nevertheless, because of the mighty
stimulus of the law of causality, we have already grown beyond
our fellow creatures and are overcoming them in the struggle for
existence. We truly have reason to be proud that it has been
given to us to understand, slowly and through hard work, the incomprehensibly
great scheme of things. Surely we need not feel in the least
ashamed if we have not achieved this understanding upon the first
flight of an Icarus.</p>
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Hermann Helmholtz (1878)
The Facts of Perception
Source: The Facts of Perception (1878) from Selected Writings of Hermann Helmholtz, Wesleyan University Press. The Whole speech, barring inrtoductory paragraphs and appendices are repoduced here.
The problems which that earlier period considered fundamental
to all science were those of the theory of knowledge: What
is true in our sense perceptions and thought? and In what way
do our ideas correspond to reality? Philosophy and the natural
sciences attack these questions from opposite directions, but
they are the common problems of both. Philosophy, which is concerned
with the mental aspect, endeavours to separate out whatever in
our knowledge and ideas is due to the effects of the material
world, in order to determine the nature of pure mental activity.
The natural sciences, on the other hand, seek to separate out
definitions, systems of symbols, patterns of representation, and
hypotheses, in order to study the remainder, which pertains to
the world of reality whose laws they seek, in a pure form. Both
try to achieve the same separation, though each is interested
in a different part of the divided field.
The natural scientist no more than the philosopher can ignore
epistemological questions when he is dealing with sense perception
or when he is concerned with the fundamental principles of geometry,
mechanics, or physics. Since my work has entered many times into
both the region of science and the region of philosophy, I should
like to attempt to survey what has been done from the side of
the natural sciences to answer the questions which have just been
stated. The laws of thought, after all, are the same for the
scientist as for the philosopher.
In all cases where the facts of daily experience, which are already
very copious, afford a clear-sighted thinker with a disinterested
sense of the truth sufficient information for making correct judgments,
the scientist must be satisfied to recognise that a methodologically
complete collection of the facts of experience will simply confirm
those judgments, though there are occasionally, of course, some
conflicting cases. This is my excuse (if it must be excused)
for the fact that in general, in the following paper, no completely
new answers - on the contrary, only rather old answers, long since
given to the questions to be dealt with - will be presented to you.
Often enough, of course, even old concepts gain new illumination
and new meaning from newly ascertained facts.
Shortly before the beginning of the present century, Kant expounded
a theory of that which, in cognition, is prior or antecedent to
all experience; that is, he developed a theory of what he called
the transcendental forms of intuition and thought. These
are forms into which the content of our sensory experience must
necessarily be fitted if it is to be transformed into ideas.
As to the qualities of sensations themselves, Locke had earlier
pointed out the role which our bodily and mental structure or
organisation plays in determining the way things appear to us.
Along this latter line, investigations of the physiology of the
senses, in particular those which Johannes Müller carried
out and formulated in the law of the specific energies of the
senses, have brought (one can almost say, to a completely unanticipated
degree) the fullest confirmation. Further, these investigations
have established the nature of - and in a very decisive manner have
clarified the significance of - the antecedently given subjective
forms of intuition. This subject has already been discussed rather
frequently, so I can begin with it at once today.
Among the various kinds of sensations, two quite different distinctions
must be noted. The most fundamental is that among sensations
which belong to different senses, such as the differences among
blue, warm, sweet, and high-pitched. In an earlier work I referred
to these as differences in the modality of the sensations.
They are so fundamental as to exclude any possible transition
from one to another and any relationship of greater or less similarity.
For example, one cannot ask whether sweet is more like red or
more like blue.
The second distinction, which is less fundamental, is that among
the various sensations of the same sense. I have referred to
these as differences in quality. Fichte thought of all
the qualities of a single sense as constituting a circle of
quality; what I have called differences of modality, he designated
differences between circles of quality. Transitions and comparisons
are possible only within each circle; we can cross over from blue
through violet and carmine to scarlet, for example, and we can
say that yellow is more like orange than like blue.
Physiological studies now teach that. the more fundamental differences
are completely independent of the kind of external agent by which
the sensations are excited. They are determined solely and exclusively
by the nerves of sense which receive the excitations. Excitations
of the optic nerves produce only sensations of light, whether
the nerves are excited by objective light (that is, by the vibrations
in the ether), by electric currents conducted through the eye,
by a blow on the eyeball, or by a strain in the nerve trunk during
the eyes' rapid movements in vision. The sensations which result
from the latter processes are so similar to those caused by objective
light that for a long time men believed it was possible to produce
light in the eye itself. It was Johannes Müller who showed
that internal production of light does not take place and that
the sensation of light exists only when the optic nerve is excited.
Every sensory nerve, then, when excited by even the most varied
stimuli, produces a sensation only within its own specific circle
of quality. The same external stimulus, therefore, if it strikes
different nerves, produces diverse sensations, which are always
within the circles of quality of the nerves excited. The same
vibrations of the ether which the eye experiences as light, the
skin feels as heat. The same vibrations of the air which the
skin feels as a flutter, the ear hears as sound. In the former
case the differences between the sensations are so great that
physicists once felt justified in postulating two agents, analogous
and in part, equivalent to each other, one of which appears to
us as light and the other as radiant heat. Only later, after
careful, exhaustive experimental investigations, was the complete
similarity of the physical characteristics of these two agents
established.
Within the circle of quality of each individual sense, where the
nature of the stimulating object determines at least in part the
quality of the resulting sensation, the most unexpected incongruities
have also been found. In this connection a comparison of sight
and hearing is instructive, for the objects of both - light and
sound - are vibrational movements which, depending upon the frequency
of the vibrations, produce sensations of different colours in
vision and differences of pitch in hearing. If, for greater clarity,
we refer to the relationships among the vibrations of light
in terms of the musical intervals formed by sound vibrations,
the following points are evident: The ear is sensitive to about
ten octaves of different tones, while the eye is sensitive to
only a musical sixth. With both sound and light, however, vibrations
exist outside of these ranges, and their physical existence can
be demonstrated.
In its short scale the eye has only three independent, fundamental
sensations - red, green, and blue-violet - out of which all of the
other colours are formed by various combinations. These three
sensations are combined in vision without being altered or disturbed.
The ear, on the other hand, distinguishes an enormous number
of tones of different pitch, and no one chord sounds exactly like
another made up of different tones. In vision, the same sensation
of white can be produced by combining the red and the green-blue
of the spectrum; or green, red, and violet; or yellow and ultramarine
blue; or green-yellow and violet; or any two, or three, or indeed
all of these combinations together. If the same thing occurred
in hearing, the simultaneous striking of c and f with d
and g, or with e and a, or with c, d, e, f, g, a, and
so on, would all produce the same sound. Thus it should be emphasised,
with reference to the objective significance of colours, that
except for the effect on the eye there is no single objective
combination of colours which can be related invariantly to any
one sensation of colour.
Finally, consonance and dissonance in music are due entirely to
the phenomenon of beats. These in turn are due to the rapid variations
in the intensity of sound which result when two tones of almost
equal pitch are alternatively in and out of phase, thus causing
first strong and then weak vibrations in any body oscillating
harmonically with them. As a physical phenomenon, beats can be
produced just as readily by the interaction of two trains of light
waves as by the interaction of two trains of sound waves. In
order to be aware of them, however, the nerves would have to be
affected by both wave trains, and the alternations between strong
and weak intensities would have to follow each other at just the
right intervals. In this respect the auditory nerves are greatly
superior to the optic nerves.
Each fibre among the auditory nerves is sensitive to only a single
tone from a narrow interval of the scale, so that in general only
tones lying close together can interact with one another, while
those at a distance cannot. If the latter do interact, they produce
not beats but an overtone or some combination tone. It is in
connection with these, as you know, that the difference between
harmonic and non-harmonic intervals, that is, between consonance
and dissonance, makes its appearance. In contrast again, every
optic nerve fibre is sensitive to the entire spectrum, although,
to be sure, they are sensitive in different degrees to different
parts of the spectrum. If it were possible to detect by means
of the optic nerves the enormously rapid beats resulting from
the interaction of different vibrations of light, every mixed
colour would appear as a dissonance.
It is apparent that all these differences among the effects of
light and sound are determined by the way in which the nerves
of sense react. Our sensations are simply effects which are produced
in our organs by objective causes; precisely how these effects
manifest themselves depends principally and in essence upon the
type of apparatus that reacts to the objective causes. What information,
then, can the qualities of such sensations give us about the characteristics
of the external causes and influences which produce them? Only
this: our sensations are signs, not images, of such characteristics.
One expects an image to be similar in some respect to the object
of which it is an image; in a statue one expects similarity of
form, in a drawing similarity of perspective, in a painting similarity
of colour. A sign, however, need not be similar in any way to
that of which it is a sign. The sole relationship between them
is that the same object, appearing under the same conditions,
must evoke the same sign; thus different signs always signify
different causes or influences.
To popular opinion, which accepts on faith and trust the complete
veridicality of the images which our senses apparently furnish
of external objects, this relationship may seem very insignificant.
In truth it is not, for with it something of the greatest importance
can be accomplished: we can discover the lawful regularities in
the processes of the external world. And natural laws assert that
from initial conditions which are the same in some specific way,
there always follow consequences which are the same in some other
specific way. If the same kinds of things in the world of experience
are indicated by the same signs, then the lawful succession of
equal effects from equal causes will be related to a similar regular
succession in the realm of our sensations. If, for example, some
kind of berry in ripening forms a red pigment and sugar at the
same time, we shall always find a red colour and a sweet taste
together in our sensations of berries of this kind.
Thus, even if in their qualities our sensations are only signs
whose specific nature depends completely upon our make-up or organisation,
they are not to be discarded as empty appearances. They are still
signs of something - something existing or something taking place - and
given them we can determine the laws of these objects or these
events. And that is something of the greatest importance!
Thus, our physiological make-up incorporates a pure form of intuition,
insofar as the qualities of sensation are concerned. Kant, however,
went further. He claimed that, not only the qualities of sense
experience, but also space and time are determined by the nature
of our faculty of intuition, since we cannot perceive anything
in the external world which does not occur at some time and in
some place and since temporal location is also a characteristic
of all subjective experience. Kant therefore called time the
a priori and necessary transcendental form of the inner, and space
the corresponding form of the outer, intuition. Further, Kant
considered that spatial characteristics belong no more to the
world of reality (the dinge an sich) than the colours we
see belong to external objects. On the contrary, according to
him, space is carried to objects by our eyes.
Even in this claim, scientific opinion can go along with Kant
up to a certain point. Let us consider whether any sensible marks
are present in ordinary, immediate experience to which all perception
of objects in space can be related. Indeed, we find such marks
in connection with the fact that our body's movement sets us in
varying spatial relations to the objects we perceive, so that
the impressions which these objects make upon us change as we
move. The impulse to move, which we initiate through the innervation
of our motor nerves, is immediately perceptible. We feel that
we are doing something when we initiate such an impulse. We do
not know directly, of course, all that occurs; it is only through
the science of physiology that we learn how we set the motor nerves
in an excited condition, how these excitations are conducted to
the muscles, and how the muscles in turn contract and move the
limbs. We are aware, however, without any scientific study, of
the perceptible effects which follow each of the various innervations
we initiate.
The fact that we become aware of these effects through frequently
repeated trials and observations can be demonstrated in many,
many ways. Even as adults we can still learn the innervations
necessary to pronounce the words of a foreign language, or in
singing to produce some special kind of voice formation. We can
learn the innervations necessary to move our ears, to turn our
eyes inward or outward, to focus them upward or downward, and
so on. The only difficulty in learning to do these things is that
we must try to do them by using innervations which are unknown,
innervations which have not been necessary in movement previously
executed. We know these innervations in no form and by no definable
characteristics other than the fact that they produce the observable
effects intended. This alone distinguishes the various innervations
from one another.
If we initiate an impulse to move - if we shift our gaze, say, or
move our hands, or walk back and forth - the sensations belonging
to some circles of quality (namely, those sensations due to objects
in space) may be altered. Other Psychical states and conditions
that we are aware of in ourselves, however, such as recollections,
intentions, desires, and moods, remain unchanged. In this way
a thoroughgoing distinction may be established in our immediate
experience between the former and the latter. If we use the term
spatial to designate those relations which we can alter
directly by our volition but whose nature may still remain conceptually
unknown to us, an awareness of mental states or conditions does
not enter into spatial relations at all.
All sensations of external senses, however, must be preceded by
some kind of innervation, that is, they must be spatially determined.
Thus space, charged with the qualities of our sensations of movement,
will appear to us as that through which we move or that about which
we gaze. In this sense spatial intuition is a subjective form
of intuition, just as the qualities of sensation (red, sweet,
cold) are. Naturally, this does not mean that the determination
of the position of a specific object is only an illusion, any
more than the qualities of sensation are.
From this point of view, space is the necessary form of outer
intuition, since we consider only what we perceive as spatially
determined to constitute the external world. Those things which
are not perceived in any spatial relation we think of as belonging
to the world of inner intuition, the world of self-consciousness.
Space is an a priori form of intuition, necessarily prior to all
experience, insofar as the perception of it is related to the
possibility of motor volitions, the mental and physical capacity
for which must be provided by our physiological make-up before
we can have intuitions of space.
There can be no doubt about the relationship between the sensible
signs or marks mentioned above and the changes in our perception
of objects in space which result from our movements. We still
must consider the question, however, whether it is only from
this source that all the specific characteristics of our intuition
of space originate. To this end we must reflect further upon
some of the conclusions concerning perception at which we have
just arrived.
Let us try to set ourselves back to the state or condition of
a man without any experience at all. In order to begin without
any intuition of space, we must assume that such an individual
no longer recognises the effects of his own innervations, except
to the extent that he has now learned how, by means of his memory
of a first innervation or by the execution of a second one contrary
to the first, to return to the state out of which he originally
moved. Since this mutual self-annulment of different innervations
is completely independent of what is actually perceived, the individual
can discover how to initiate innervations without any prior knowledge
of the external world.
Let us assume that the man at first finds himself to be just one
object in a region of stationary objects. As long as he initiates
no motor impulses, his sensations will remain unchanged. However,
if he makes some movement (if he moves his eyes or his hands,
for example, or moves forward), his sensations will change. And
if he returns (in memory or by another movement) to his initial
state, all his sensations will again be the same as they were
earlier.
If we call the entire group of sensation aggregates which can
potentially be brought to consciousness during a certain period
of time by a specific, limited group of volitions the temporary
presentabilia in contrast to the present, that is,
the sensation aggregate within this group which is the object
of immediate awareness - then our hypothetical individual is limited
at any one time to a specific circle of presentabilia, out
of which, however, he can make any aggregate present at any given
moment by executing the proper movement. Every individual member
of this group of presentabilia, therefore, appears to him
to exist at every moment of the period of time, regardless of
his immediate present, for he has been able to observe any of
them at any moment he wished to do so. This conclusion - that he
could have observed them at any other moment of the period if
he had wished - should be regarded as a kind of inductive inference,
since from any moment a successful inference can easily be made
to any other moment of the given period of time.
In this way the idea of the simultaneous and continuous existence
of a group of different but adjacent objects may be attained.
Adjacent is a term with spatial connotations, but it is
legitimate to use it here, since we have used spatial to
define those relations which can be changed by volition. Moreover,
we need not restrict the term adjacent so that it refers
only to material objects. For example, it can legitimately be
said that "to the right it is bright, to the left dark,"
and "forward there is opposition, behind there is nothing,"
in the case where "right" and "left" are only
names for specific movements of the eyes and "forward"
and "behind" for specific movements of the hands.
At other times the circles of presentabilia related to
this same group of volitions are different. In this way circles
of presentabilia, along with their individual members,
come to be something given to us, that is, they come to be objects.
Those changes which we are able to bring about or put an
end to by familiar acts of volition come to be separated from
those which do not result from and cannot be set aside by such
acts. This last statement is negative: in Fichte's quite appropriate
terminology, the Non-Ego forces the recognition that it is distinct
from the Ego.
When we inquire into the empirical conditions under which our
intuition of space is formed, we must concentrate in particular
upon the sense of touch, for the blind can form complete intuitions
of space without the aid of vision. Even if space turns out to
be less rich in objects for them than for people with vision,
it seems highly improbable that the foundation of the intuition
of space is completely different for the two classes of people.
If, in the dark or with our eyes closed, we try to perceive only
by touch, we are definitely able to feel the shapes of the objects
lying around us, and we can determine them with accuracy and certainty.
Moreover, we are able to do this with just one finger or even
with a pencil held in the hand the way a surgeon holds a probe.
Ordinarily, of course, if we want to find our way about in the
dark we touch large objects with five or ten fingertips simultaneously.
In this way we get from five to ten times as much information
in a given period of time as we do with one finger. We also use
the fingers to measure the sizes of objects, just as we measure
with the tips of an open pair of compasses.
It should be emphasised that with the sense of touch, the fact
that we have an extended skin surface with many sensitive points
on it is of secondary importance. What we are able to find
out, for example, about the impression on a medal by the sensations
in the skin when our hand is stationary is very slight and crude
in comparison with what we can discover even with the tip of a
pencil when we move our hand. With the sense of sight, perception
is more complicated due to the fact that besides the most sensitive
spot on the retina, the fovea central, or pit, which in
vision rushes as it were about the visual field, there are also
a great many other sensitive points acting at the same time and
in a much richer way than is the case with the sense of touch.
It is easy to see that by moving our fingers over an object, we
can learn the sequences in which impressions of it present themselves
and that these sequences are unchanging, regardless which finger
we use. Further, these are not single-valued or fixed sequences,
whose elements must always be covered, either forward or backward,
in the same order. They are not linear sequences; on the contrary,
they form a plane coextension or, using Riemann's terminology,
a manifold of the second order. The fingers are moved over a
surface by means of motor impulses which differ from those necessary
to carry them from one point on the surface to another, and different
surfaces require different movements for the fingers to glide
over them. Consequently, the space in which the fingers move
requires a manifold of a higher order than that of a surface;
the third dimension must be introduced.
Three dimensions are sufficient, however, for all our experience,
since a closed surface completely divides space as we know it.
Moreover, substances in a gaseous or fluid state, which are not
dependent at all on the nature of man's mental faculties, cannot
escape from a completely closed surface. And, just as a continuous
line can enclose only a surface and not a space - that is, a spatial
form of two and not of three dimensions - so a surface can enclose
only a space of three and not of four dimensions.
It is thus that our knowledge of the spatial arrangement of objects
is attained. Judgments concerning their size result from observations
of the congruence of our hand with parts or points of an object's
surface, or from the congruence of the retina with parts or points
of the retinal image.
A strange consequences characteristic of the ideas in the minds
of individuals with at least some experience - follows from the
fact that the perceived spatial ordering of things originates
in the sequences in which the qualities of sensations are presented
by our moving sense organs: the objects in the space around us
appear to possess the qualities of our sensations. They appear
to be red or green, cold or warm, to have an odour or a taste,
and so on. Yet these qualities of sensations belong only to our
nervous system and do not extend at all into the space around
us. Even when we know this, however, the illusion does not cease,
for it is the primary and fundamental truth. The illusion
is quite simply the sensations which are given to us in spatial
order to begin with.
You can see how the most fundamental properties of our spatial
intuition can be obtained in this way. Commonly, however, an
intuition is taken to be something which is simply given, something
which occurs without reflection or effort, something which above
all cannot be reduced to other mental processes. This popular
interpretation, at least insofar as the intuition of space is
concerned, is due in part to certain theorists in physiological
optics and in part to a strict adherence to the philosophy of
Kant. As is well known, Kant taught, not only that the general
form of the intuition of space is given transcendentally, but
also that this form possesses, originally and prior to a possible
experience, certain more specific characteristics which are commonly
given expression in the axioms of geometry. These axioms may
be reduced to the following propositions:
1. Between two points there is only one possible shortest line.
We call such a line straight.
2. A plane is determined by three points. A plane is a surface
which contains completely any straight line between any two of
its points.
3. Through any point there is only one possible line parallel
to a given straight line. Two straight lines are parallel if
they lie in the same plane and do not intersect upon any finite
extension.
Kant used the alleged fact that these propositions of geometry
appear to us necessarily true, along with the fact that we cannot
imagine or represent to ourselves any irregularities in spatial
relations, as direct proof that the axioms must be given prior
to all experience. It follows that the conception of space contained
in them or implied by them must also constitute a transcendental
form of intuition independent of all experience.
I would like to emphasise here, in connection with the controversies
which have sprung up during the past few years as to whether the
axioms of geometry are transcendental or empirical propositions,
that this question is absolutely different from the one mentioned
earlier, namely, whether space in general is a transcendental
form of intuition or not.
Our eyes see everything in the field of vision as a number of
colored plane surfaces. That is their form of intuition. However,
the particular colours that appear at any one time, the relationships
among them, and the order in which they appear are the effects
of external causes and are not determined by any law of our organisation.
Equally, the fact that space is a form of intuition implies just
as little concerning the facts which are expressed by the axioms.
If these axioms are not empirical propositions but rather pertain
to a necessary form of intuition, this is a further and quite
specific characteristic of the general form, and the same reasoning
which was used to establish that the general form of intuition
of space is transcendental is not necessarily sufficient to establish
that the axioms also have a transcendental origin.
In his assertion that it is impossible to conceive of spatial
relations which contradict the axioms of geometry, as well as
in his general interpretation of intuition as a simple, irreducible
mental process, Kant was influenced by the mathematics and the
physiology of the senses of his time.
In order to try to conceive of something which has never been
seen before, it is necessary to know how to imagine in detail
the series of sense impressions which, in accordance with well-known
laws, would be experienced if the thing in question - and any changes
in it - were actually perceived by any of the sense organs from
all possible positions. Further, these impressions must be such
that all possible interpretations of them except one can be eliminated.
If these series of sense impressions can be specified completely
and uniquely in this way, then in my opinion one must admit that
the object clearly is conceivable.
Since by hypothesis the object has never been observed before,
no previous experience can come to our aid and guide our imagination
to the required series of impressions. Such guidance can be provided
only by the concepts of the objects and relationships to be represented.
Such concepts are first developed analytically as much as is
necessary for the investigation at hand. Indeed, the concepts
of spatial forms to which nothing in ordinary experience corresponds
can be developed with certainty only by the use of analytic geometry.
It was Gauss who, in 1828 in his treatise on the curvature of
surfaces, first presented the analytical tools necessary for the
solution of the present problem, the tools which Riemann later
used to establish the logical possibility of his system of geometry.
These investigations have been called, not improperly, meta-mathematical.
Furthermore, in 1829 and in 1840 Lobachevsky, using the ordinary,
intuitive, synthetic method, developed a geometry without the
axiom of parallels which is in complete agreement with the corresponding
parts of the new analytical investigations. Beltrami has given
us a method for representing meta-mathematical spaces in parts
of Euclidean space, a method by which it is possible to imagine
the appearance of such spaces in perspective vision with relative
ease. Finally, Lipschitz has pointed out how the general principles
of mechanics can be transferred to such spaces, so that the series
of sense impressions which would occur in them can be specified
completely. Thus, in my opinion, the conceivability of such spaces
in the sense just indicated has been established.
There is considerable disagreement, however, on this issue. For
a demonstration of conceivability I require only that, for every
means of observation, the corresponding sense impressions be sketched
out clearly and unambiguously, if necessary with the aid of scientific
knowledge of the laws of these methods of observation. To anyone
who knows these laws, the objects or relationships to be represented
seem almost real. Indeed, the task of representing the various
spatial relationships of meta-mathematical spaces requires training
in the understanding of analytical methods, perspective constructions,
and optical phenomena.
This, however, goes counter to the older conception of intuition,
according to which only those things whose ideas come instantly - that
is, without reflection and effort - to consciousness along with
the sense impressions are to be regarded as given through intuition.
It is true that our attempts to represent meta-mathematical spaces
do not have the effortlessness, speed, or immediate clarity of
our perceptions of, say, the shape of a room which we enter for
the first time or of the arrangement and shape of the objects
in it, the materials out of which they are made, and many other
things. If this kind of immediate evidence is really a fundamental,
necessary characteristic of an intuition, we cannot rightly claim
the conceivability of meta-mathematical spaces.
But upon further consideration we find that there are a large
number of experiences which show that we can develop speed and
certainty in forming specific ideas after receiving specific sense
impressions, even in cases where there are no natural connections
between the ideas and the impressions. One of the most striking
examples of this is learning a native language. Words are arbitrarily
or accidentally selected signs, and in every language they are
different. Knowledge of these signs is not inherited; to a German
child who has been raised among French-speaking people and who
has never heard German spoken, it is a foreign language. A child
learns the meanings of words and sentences only by examples of
their use; and before he understands the language, it is impossible
to make intelligible to him the fact that the sounds he hears
are signs which have meaning. Finally, however, after he has
grown up, he understands these words and sentences without reflection,
without effort, and without knowing when, where, or through what
examples he learned them. He understands the most subtle shifts
in their meaning, shifts which are often so subtle that any attempt
to define them logically could be carried out only with difficulty.
It is not necessary for me to add further examples; our daily
life is more than rich enough in them. Art, most clearly poetry
and the plastic arts, is based directly upon such experiences.
The highest kind of perception, that which we find in the artist's
vision, is an example of this same basic kind of understanding,
in this case the understanding of new aspects of man and nature.
Among the traces which frequently repeated perceptions leave
behind in the memory, the ones conforming to law and repeated
with the greatest regularity are strengthened, while those which
vary accidentally are obliterated. In a receptive, attentive
observer, intuitive images of the characteristic aspects of the
things that interest him come to exist; afterward he knows no
more about how these images arose than a child knows about the
examples from which he learned the meanings of words. That an
artist has beheld the truth follows from the fact that we too
are seized with the conviction of truth when he leads us away
from currents of accidentally related qualities. An artist is
superior to us in that he knows how to find the truth amid all
the confusion and chance events of daily experience.
So much to remind ourselves how effective these mental processes
are, from the lowest to the highest reaches of our intellectual
life. In some of my earlier works I called the connections of
ideas which take place in these processes unconscious inferences.
These inferences are unconscious insofar as their major premise
is not necessarily expressed in the form of a proposition; it
is formed from a series of experiences whose individual members
have entered consciousness only in the form of sense impressions
which have long since disappeared from memory. Some fresh sense
impression forms the minor premise, to which the rule impressed
upon us by previous observations is applied. Recently I have
refrained from using the phrase unconscious inference in
order to avoid confusion with what seems to me a completely obscure
and unjustified idea which Schopenhauer and his followers have
designated by the same name. Obviously we are concerned here
with the elementary processes which are the real basis of all
thought, even though they lack the critical certainty and refinement
to be found in the scientific formation of concepts and in the
individual steps of scientific inferences.
Returning now to the question of the origin of the axioms of geometry,
our lack of facility in developing ideas of meta-mathematical
spatial relations because of insufficient experience cannot be
used validly as an argument against their conceivability. On
the contrary, these spatial relations are completely conceivable.
Kant's proof of the transcendental nature of the geometrical
axioms is therefore untenable. Indeed, investigation of the facts
of experience shows that the axioms of geometry, taken in the
only sense in which they can be applied to the external world,
are subject to proof or disproof by experience.
The memory traces of previous experience play an even more extensive
and influential role in our visual observations. An observer
who is not completely inexperienced receives without moving his
eyes (this condition can be realised experimentally by using the
momentary illumination of an electric discharge or by carefully
and deliberately staring) images of the objects in front of him
which are quite rich in content. We can easily confirm with our
own eyes, however, that these images are much richer and especially
much more precise if the gaze is allowed to move about the field
of vision, in this way making use of the kind of spatial observations
which I have previously described as the most fundamental. Indeed,
we are so used to letting our eyes wander over the objects we
are looking at that considerable practice is required before we
succeed in making them - for purposes of research in physiological
optics - fix on a point without wandering.
In my work on physiological optics I have tried to explain how
our knowledge of the field open to vision is gained from
visual images experienced as we move our eyes, given that there
are some perceptible differences of location on the retina among
otherwise qualitatively similar sensations. Following Lotze's
terminology, these spatially different retinal sensations were
called local signs. It is not necessary to know prior
to visual experience that these signs are local signs, that is,
that they are related to various objective differences in place.
The fact that people blind from birth who afterward gain their
sight by an operation cannot, before they have touched them, distinguish
between such simple forms as a circle and a square by the use
of their eyes has been confirmed even more fully by recent studies.
Investigations in physiology show that with the eyes alone we
can achieve rather precise and reliable comparisons of various
lines and angles in the field of vision, provided that through
the eyes' normal movements the images of these figures can be
formed quickly one after another on the retina. We can even estimate
the actual size and distance of objects which are not too far
away from us with considerable accuracy by means of changing perspectives
in our visual field, although making such judgments in the three
dimensions of space is much more complicated than it is in the
case of a plane image. As is well known, one of the greatest
difficulties in drawing is being able to free oneself from the
influence which the idea of the true size of a perceived object
involuntarily has upon us. These are all facts which we would
expect if we obtain our knowledge of local signs through experience.
We can learn the changing sensory signs of something which remains
objectively constant much more easily and reliably than we can
the signs of something which changes with every movement of the
body, as perspective images do.
To a great many physiologists, however, whose point of view we
shall call nativistic, in contrast to the empirical position which
I have sought to defend, the idea that knowledge of the field
of vision is acquired is unacceptable. It is unacceptable to
them because they have not made clear to themselves what even
the example of learning a language shows so clearly, namely, how
much can be explained in terms of the accumulation of memory impressions.
Because of this lack of appreciation of the power of memory,
a number of different attempts have been made to account for at
least part of visual perception through innate mechanisms by means
of which specific sensory impressions supposedly induce specific
innate spatial ideas. In an earlier work I tried to show that
all hypotheses of this kind which had been formulated were insufficient,
since cases were always being discovered in which our visual perceptions
are more precisely in agreement with reality than is stated in
these hypotheses. With each of them we are forced to the additional
assumption that ultimately experience acquired during movement
may very well prevail over the hypothetical inborn intuition and
thus accomplish in opposition to it what, according to the empirical
hypothesis, it would have accomplished without such a hindrance.
Thus nativistic hypotheses concerning knowledge of the field of
vision explain nothing. In the first place, they only acknowledge
the existence of the facts to be explained, while refusing to
refer these facts to well-confirmed mental processes which even
they must rely on in certain cases. In the second place, the
assumption common to all nativistic theories - that ready-made ideas
of objects can be produced by means of organic mechanisms - appears
much more rash and questionable than the assumption of the empirical
theory that the non-cognitive materials of experience exist as
a result of external influences and that all ideas are formed
out of these materials according to the laws of thought.
In the third place, the nativistic assumptions are unnecessary.
The single objection that can be raised against the empirical
theory concerns the sureness of the movements of many newborn
or newly hatched animals. The smaller the mental endowment of
these animals, the sooner they learn how to do all that they are
capable of doing. The narrower the path on which their thoughts
must travel, the easier they find their way. The newborn human
child, on the other hand, is at first awkward in vision; it requires
several days to learn to judge by its visual images the direction
in which to turn its head in order to reach its mother's breast.
The behaviour of young animals is, in general, quite independent
of individual experience. Whatever these instincts are which
guide them - whether they are the direct hereditary transmission
of their parents' ideas, whether they have to do only with pleasure
and pain, or whether they are motor impulses related to certain
aggregates of experience - we do not know. In the case of human
beings the last phenomenon is becoming increasingly well understood.
Careful and critically employed investigations are most urgently
needed on this whole subject.
Arrangements such as those which the nativistic hypotheses assume
can at best have only a certain pedagogical value; that is, they
may facilitate the initial understanding of uniform, lawful relations.
And the empirical position is, to be sure, in agreement with
the nativistic on a number of points - for example, that local signs
of adjacent places on the retina are more similar than those farther
apart and that the corresponding points on the two retina are
more similar than those that do not correspond. For our present
purposes, however, it is sufficient to know that complete spatial
intuition can be achieved by the blind and that for people with
vision, even if the nativistic hypotheses should prove partially
correct, the final and most exact determinations of spatial relations
are obtained through observations made while moving in various
ways.
I should like, now, to return to the discussion of the most fundamental
facts of perception. As we have seen, we not only have changing
sense impressions which come to us without our doing anything;
we also perceive while we are being active or moving about. In
this way we acquire knowledge of the uniform relations between
our innervations and the various aggregates of impressions included
in the circles of presentabilia. Each movement we make
by which we alter the appearance of objects should be thought
of as an experiment designed to test whether we have understood
correctly the invariant relations of the phenomena before us,
that is, their existence in definite spatial relations.
The persuasive force of these experiments is much greater than
the conviction we feel when observations are carried out without
any action on our part, for with these experiments the chains
of causes run through our consciousness. One factor in these
causes is our volitions, which are known to us by an inner intuition;
we know, moreover, from what motives they arise. In these volitions
originates the chain of physical causes which results in the final
effect of the experiment, so we are dealing with a process passing
from a known beginning to a known result. The two essential conditions
necessary for the highest degree of conviction are (1) that our
volitions not be determined by the physical causes which simultaneously
determine the physical processes and (2) that our volitions not
influence psychically the resulting perceptions.
These last points should be considered more fully. The volition
for a specific movement is a psychic act, and the perceptible
change in sensation which results from it is also a psychic event.
is it possible for the first to bring about the second by some
purely mental process? It is certainly not absolutely impossible.
Whenever we dream, something similar to this takes place.
While dreaming we believe that we are executing some movement,
and then we dream further that the natural results of this movement
occur. We dream that we climb into a boat, shove it off from
shore, guide it over the water, watch the surrounding objects
shift position, and so on. In cases like this it seems to the
dreamer that he sees the consequences of his actions and that
the perceptions in the dream are brought about by means of purely
Psychical processes. Who can say how long and how finely spun,
how richly elaborated, such dreams may be! If everything in dreams
were to occur in ultimate accordance with the laws of nature,
there would be no distinction between dreaming and waking, except
that the person who is awake may break off the series of impressions
he is experiencing.
I do not see how a system of even the most extreme subjective
idealism, even one which treats life as a dream, can be refuted.
One can show it to be as improbable, as unsatisfactory as possible
(in this connection I concur with the severest expressions of
condemnation), but it can be developed in a logically consistent
manner, and it seems to me important to keep this in mind. How
ingeniously Calderon carried out this theme in Life Is a Dream
is well known.
Fichte also believed and taught that the Ego constructs the Non-Ego,
that is, the world of phenomena, which it requires for the development
of its Psychical activities. His idealism is to be distinguished
from the one mentioned above, however, by the fact that he considered
other individuals not to be dream images but, on the basis of
moral laws, to be other Egos with equal reality. Since the images
by which all these Egos represent the Non-Ego must be in agreement,
he considered all the individual Egos to be part of or emanations
from an Absolute Ego. The world in which they find themselves
is the conceptual world which the World Spirit constructs. From
this a conception of reality results similar to that of Hegel.
The realistic hypothesis, on the other hand, accepts the evidence
of ordinary personal experience, according to which the changes
in perception which result from an act have more than a mere psychical
connection with the antecedent volition. It accepts what seems
to be established by our daily perception, that is, that the material
world about us exists independently of our ideas. Undoubtedly
the realistic hypothesis is the simplest that can be formulated.
It is based upon and confirmed by an extraordinarily large number
of cases. It is sharply defined in all specific instances and
is therefore unusually useful and fruitful as a foundation for
behaviour.
Even if we take the idealistic position, we can hardly talk about
the lawful regularity of our sensations other than by saying:
"Perceptions occur as if the things of the material world
referred to in the realistic hypothesis actually did exist."
We cannot eliminate the "as if" construction completely,
however, for we cannot consider the realistic interpretation to
be more than an exceedingly useful and practical hypothesis.
We cannot assert that it is necessarily true, for opposed to it
there is always the possibility of other irrefutable idealistic
hypotheses.
It is always well to keep this in mind in order not to infer from
the facts more than can rightly be inferred from them. The various
idealistic and realistic interpretations are metaphysical hypotheses
which, as long as they are recognised as such, are scientifically
completely justified. They may become dangerous, however, if
they are presented as dogmas or as alleged necessities of thought.
Science must consider thoroughly all admissible hypotheses in
order to obtain a complete picture of all possible modes of explanation.
Furthermore, hypotheses are necessary to someone doing research,
for one cannot always wait until a reliable scientific conclusion
has been reached; one must sometimes make judgments according
to either probability or aesthetic or moral feelings. Metaphysical
hypotheses are not to be objected to here either. A thinker is
unworthy of science, however, if he forgets the hypothetical origin
of his assertions. The arrogance and vehemence with which such
hidden hypotheses are sometimes defended are usually the result
of a lack of confidence which their advocates feel in the hidden
depths of their minds about the qualifications of their claims.
What we unquestionably can find as a fact, without any hypothetical
element whatsoever, is the lawful regularity of phenomena. From
the very first, in the case where we perceive stationary objects
distributed before us in space, this perception involves the recognition
of a uniform or law-like connection between our movements and
the sensations which result from them. Thus even the most elementary
ideas contain a mental element and occur in accordance with the
laws of thought. everything that is added in intuition to the
raw materials of sensation may be considered mental, provided
of course that we accept the extended meaning of mental discussed
earlier.
If "to conceive" means "to form concepts,"
and if it is true that in a concept we gather together a class
of objects which possess some common characteristic, then it follows
by analogy that the concept of some phenomenon which changes in
time must encompass that which remains the same during that period
of time. As Schiller said, the wise man
Seeks for the familiar law amidst the awesome multiplicity of
accidental occurrences,
Seeks for the eternal Pole Star amidst the constant flight of
appearances.
That which, independently of any and everything else, remains
the same during all temporal changes, we call a substance;
the invariant relation between variable but related quantities
we call a law. We perceive only the latter directly.
Knowledge of substances can be attained only through extensive
investigation, and as further investigation is always possible,
such knowledge remains open to question. At an earlier time both
light and heat were thought to be substances; later it turned
out that both were only transitory forms of motion. We must therefore
always be prepared for some new analysis of what are now known
as the chemical elements.
The first product of the rational conception of phenomena is its
lawfulness or regularity. If we have fully investigated some
regularity, have established its conditions completely and with
certainty and, at the same time, with complete generality, so
that for all possible subsequent cases the effect is unequivocally
determined - and if we have therefore arrived at the conviction
that the law is true and will continue to hold true at all times
and in all cases - then we recognise it as something existing independently
of our ideas, and we label it a cause, or that which underlies
or hes behind the changes taking place. (Note that the meaning
I give to the word cause and its application are both exactly
specified, although in ordinary language the word is also variously
used to mean antecedent or motive.)
Insofar as we recognise a law as a power analogous to our will,
that is, as something giving rise to our perceptions as well as
determining the course of natural processes, we call it a force.
The idea of a force acting in opposition to us arises directly
out of the nature of our simplest perceptions and the way in which
they occur. From the beginning of our lives, the changes which
we cause ourselves by the acts of our will are distinguished from
those which are neither made nor can be set aside by our will.
Pain, in particular, gives us the most compelling awareness of
the power or force of reality. The emphasis falls here on the
observable fact that the perceived circle of presentabilia
is not created by a conscious act of our mind or will. Fichte's
Non-Ego is an apt and precise expression for this. In
dreaming, too, that which a person believes he sees and feels
does not appear to be called forth by his will or by the known
relations of his ideas, for these also may often be unconscious.
They constitute a Non-Ego for the dreamer too. It is the same
for the idealists who see the Non-Ego as the world of ideas of
the World Spirit.
We have in the German language a most appropriate word for that
which stands behind the changes of phenomena and acts, namely,
"the real". This word implies only action; it lacks
the collateral meaning of existing as substance, which the concept
of "the actual" or "the essential" includes.
In the concept of "the objective", on the other
hand, the notion of the complete form of objects is introduced,
something that does not correspond to anything in our most basic
perceptions. In the case of the logically consistent dreamer,
it should be noted, we must use the words "effective"
and "real" to characterise those Psychical conditions
or motives whose sensations correspond uniformly to, and which
are experienced as the momentary states of, his dreamed world.
In general, it is clear that a distinction between thought and
reality is possible only when we know how to make the distinction
between that which the ego can and that which it cannot change.
This, however, is possible only when we know the uniform consequences
which volitions have in time. From this fact it can be seen that
conformity to law is the essential condition which something must
satisfy in order to be considered real.
I need not go into the fact that it is a contradictio in abjecto
to try to present the actual or Kant's ding an sich in
positive statements without comprehending it within our forms
of representation. This fact has been pointed out often enough
already. What we can attain, however, is knowledge of the lawful
order in the realm of reality, since this can actually be presented
in the sign system of our sense impressions.
All things transitory
But as symbols are sent. [Faust]
I take it to be a propitious sign that we find Goethe with us
here, as well as further along on this same path. Whenever we
are dealing with a question requiring a broad outlook, we can
trust completely his clear, impartial view as to where the truth
lies. He demanded of science that it be only an artistic arrangement
of facts and that it form no abstract concepts concerning them,
for he considered abstract concepts to be empty names which only
hide the facts. In somewhat the same sense, Gustav Kirchhoff
has recently stated that the task of the most abstract of the
natural sciences, mechanics, is to describe completely and in
the simplest possible way the kinds of motion appearing in nature.
As to the question whether abstract concepts hide the facts or
not, this indeed happens if we remain in the realm of abstract
concepts and do not examine their factual content, that is, if
we do not try to make clear what new and observable invariant
relations follow from them. A correctly formulated hypothesis,
as we observed a moment ago, has its empirical content expressed
in the form of a general law of nature. The hypothesis itself
is an attempt to rise to more general and more comprehensive uniformities
or regularities. Anything new, however, that an hypothesis asserts
about facts must be established or confirmed by observation and
experiment. Hypotheses which do not have such factual reference
or which do not lead to trustworthy, unequivocal statements concerning
the facts falling under them should be considered only worthless
phrases.
Every reduction of some phenomenon to underlying substances and
forces indicates that something unchangeable and final has been
found. We are never justified, of course, in making an unconditional
assertion of such a reduction. Such a claim is not permissible
because of the incompleteness of our knowledge and because of
the nature of the inductive inferences upon which our perception
of reality depends.
Every inductive inference is based upon the belief that some given
relation, previously observed to be regular or uniform, will continue
to hold in all cases which may be observed. In effect, every
inductive inference is based upon a belief in the lawful regularity
of everything that happens. This uniformity or lawful regularity,
however, is also the condition of conceptual understanding. Thus
belief in uniformity or lawful regularity is at the same time
belief in the possibility of understanding natural phenomena conceptually.
If we assume that this comprehension or understanding of natural
phenomena can be achieved - that is, if we believe that we shall
be able to discern something fundamental and unchanging which
is the cause of the changes we observe - then we accept a regulative
principle in our thinking. It is called the law of causality,
and it expresses our belief in the complete comprehensibility
of the world.
Conceptual understanding, in the sense in which I have just described
it, is the method by which the world is submitted to our thoughts,
facts are ordered, and the future predicted. It is our right
and duty to extend the application of this method to all occurrences,
and significant results have already been achieved in this way.
We have no justification other than its results, however, for
the application of the law of causality. We might have lived
in a world in which every atom was different from every other
one and where nothing was stable. In such a world there would
be no regularity whatsoever, and our conscious activities would
cease.
The law of causality is in reality a transcendental law, a law
which is given a priori. It is impossible to prove it by experience,
for, as we have seen, even the most elementary levels of experience
are impossible without inductive inferences, that is, without
the law of causality. And even if the most complete experience
should teach us that everything previously observed has occurred
uniformly - a point concerning which we are not yet certain - we could
conclude only by inductive inferences, that is, by presupposing
the law of causality, that the law of causality will also be valid
in the future. We can do no more than accept the proverb, "Have
faith and keep on!"
The earth's inadequacies
Will then prove fruitful. [Faust]
That is the answer we must give to the question: what is true
in our ideas? In giving this answer we find ourselves at the
foundation of Kant's system and in agreement with what has always
seemed to me the most fundamental advance in his philosophy.
I have frequently noted in my previous works the agreement between
the more recent physiology of the senses and Kant's teachings.
I have not meant, of course, that I would swear in verbs magistri
to all his more minor points. I believe that the most fundamental
advance of recent times must be judged to be the analysis of the
concept of intuition into the elementary processes of thought.
Kant failed to carry out this analysis or resolution; this is
one reason why he considered the axioms of geometry to be transcendental
propositions. It has been the physiological investigations of
sense perception which have
led us to recognise the most basic or elementary kinds of judgment,
to inferences which are not expressible in words. These judgments
or inferences will, of course, remain unknown and inaccessible
to philosophers as long as they inquire only into knowledge expressed
in language.
Some philosophers who retain an inclination toward metaphysical
speculation consider what we have treated as a defect in Kant's
system, resulting from the lack of progress of the special sciences
in his time, to be the most fundamental part of his philosophy.
Indeed, Kant's proof of the possibility of metaphysics, the alleged
science he did nothing further to develop, rests completely upon
the belief that the axioms of geometry and the related principles
of mechanics are transcendental propositions, given a priori.
As a matter of fact, however, Kant's entire system really conflicts
with the possibility of metaphysics, and the more obscure points
in his theory of knowledge, over which so much has been argued,
stem from this conflict.
Be that as it may, the natural sciences have a secure, well-established
foundation from which they can search for the laws of reality,
a wonderfully rich and fertile field of endeavour. As long as
they restrict themselves to this search, they need not be troubled
with any idealistic doubts. Such work will, of course, always
seem modest to some people when compared to the high-flown designs
of the metaphysicians.
For with Gods must
Never a mortal
Measure himself.
If he mounts upwards,
Till his head
Touch the star-spangled heavens,
His unstable feet
Feel no ground beneath them;
Winds and wild storm-clouds
Make him their plaything;-
Or if, with sturdy,
Firm-jointed bones, he
Treads the solid, unwavering
Floor of the earth; yet
Reaches he not
Commonest oaks, nor
E'en with the vine may
Measure his greatness. [Goethe, The Limits of Man]
The author of this poem has provided us with a model of a man
who still retains clear eyes for the truth and for reality, even
when he touches the stars with the crown of his head. The true
scientist must always have something of the vision of an artist,
something of the vision which led Goethe and Leonardo da Vinci
to great scientific thoughts. Both artists and scientists strive,
even if in different ways, toward the goal of discovering new
uniformities or lawful regularities. But one must never produce
idle swarms and mad fantasies in place of artistic vision. The
true artist and the true scientist both know how to work steadily
and how to give their work a convincing, truthful form.
Moreover, reality has always unveiled the truth of its laws to
the sciences in a much richer, more sublime fashion than she has
painted it for even the most consummate efforts of mystical fantasy
and metaphysical speculation. What have all the monstrous offspring
of indiscreet fancy, heapings of gigantic dimensions and numbers,
to say of the reality of the universe, of the period of time during
which the sun and earth were formed, or of the geological ages
during which life evolved, adapting itself always in the most
thoroughgoing way to the increasingly more moderate physical conditions
of our planet?
What metaphysics has concepts in readiness to explain the effects
of magnetic and induced electrical forces upon each other - effects
which physics is now struggling to reduce to well-established
elementary forces, without having reached any clear solution?
Already, however, in physics light appears to be nothing more
than another form of movement of these two agents, and the ether
(the electrical and magnetic medium which pervades all space)
has come to have completely new characteristics or properties.
And in what schema of scholastic concepts shall we put the store
of energy capable of doing work, whose constancy is stated in
the law of the conservation of energy and which, indestructible
and incapable of increase like a substance, is acting as the motive
power in every movement of inanimate as well as animate materials
store of energy which is neither mind nor matter, yet is like
a Proteus, clothing itself always in new forms; capable of acting
throughout infinite space, yet not infinitely divisible like space;
the effective cause of every effect, the mover in every movement?
Did the poet have a notion of it?
In the tides of Life, in Action's storm, A fluctuant wave,
A shuttle free,
Birth and the Grave, An eternal sea,
A weaving, flowing
Life, all-glowing,
Thus at Time's humming loom't is my hand prepares
The garment of Life which the Deity wears ! [Faust]
We are particles of dust on the surface of our planet, which is
itself scarcely a grain of sand in the infinite space of the universe.
We are the youngest species among the living things of the earth,
hardly out of the cradle according to the time reckoning of geology,
still in the learning stage, hardly half-grown, said to be mature
only through mutual agreement. Nevertheless, because of the mighty
stimulus of the law of causality, we have already grown beyond
our fellow creatures and are overcoming them in the struggle for
existence. We truly have reason to be proud that it has been
given to us to understand, slowly and through hard work, the incomprehensibly
great scheme of things. Surely we need not feel in the least
ashamed if we have not achieved this understanding upon the first
flight of an Icarus.
Further Reading:
Biography |
Kant |
Fichte |
Schelling |
Schopenhauer |
Wundt |
Brentano |
Pavlov |
Freud |
Poincaré |
Mach |
Schlick |
Einstein
Philosophy Archive @ marxists.org
|
./articles/Poincaré-Henri/https:..www.marxists.org.reference.subject.philosophy.works.ge.einstein | <body>
<p class="title">Albert Einstein (1949)</p>
<h2>Einstein's Reply to Criticisms</h2>
<hr class="end">
<p class="information">
<span class="info">Source</span>: From <em>Albert Einstein: Philosopher-Scientist</em> (1949), from <em>The Library of Living Philosophers</em> Series;<br>
<span class="info">Published</span>: by Cambridge University Press, 1949. Including Neils Bohr's report of conversations with Einstein and Einstein's, reply reproduced here.</p>
<hr class="end">
<p><img src="../../../../../glossary/people/e/pics/einstein.jpg" height="328" width="238" align="LEFT" hspace="6" alt="einstein"></p>
<p>
BY WAY of introduction I must remark that it was not easy for
me to do justice to the task of expressing myself concerning the
essays contained in this volume. The reason lies in the fact that
the essays refer to entirely too many subjects, which, at the
present state of our knowledge, are only loosely connected with
each other. I first attempted to discuss the essays individually.
However, I abandoned this procedure because nothing even approximately
homogeneous resulted, so that the reading of it could hardly have
been either useful or enjoyable. I finally decided, therefore,
to order these remarks, as far as possible, according to topical
considerations.</p>
<p>
Furthermore, after some vain efforts, I discovered that the mentality
which underlies a few of the essays differs so radically from
my own, that I am incapable of saying anything useful about them.
This is not to be interpreted that I regard those essays - insofar
as their content is at all meaningful to me - less highly than
I do those which lie closer to my own ways of thinking, to which
[latter] I dedicate the following remarks.</p>
<p>
To begin with I refer to the essays of Wolfgang Pauli and Max
Born. They describe the content of my work concerning quanta and
statistics in general in their inner consistency and in their
participation in the evolution of physics during the last half
century. It is meritorious that they have done this: For only
those who have successfully wrestled with the problematic situations
of their own age can have a deep insight into those situations;
unlike the later historian, who finds it difficult to make abstractions
from those concepts and views which appear to his generation as
established, or even as self-evident. Both authors deprecate the
fact that I reject the basic idea of contemporary statistical
quantum theory, insofar as I do not believe that this fundamental
concept will provide a useful basis for the whole of physics.
More of this later.</p>
<p>
I now come to what is probably the most interesting subject which
absolutely must be discussed in connection with the detailed arguments
of my highly esteemed colleagues Born, Pauli, Heitler, Bohr, and
Margenau. They are all firmly convinced that the riddle of the
double nature of all corpuscles (corpuscular and undulatory character)
has in essence found its final solution in the statistical quantum
theory. On the strength of the successes of this theory they consider
it proved that a theoretically complete description of a system
can, in essence, involve only statistical assertions concerning
the measurable quantities of this system. They are apparently
all of the opinion that Heisenberg's indeterminacy-relation (the
correctness of which is, from my own point of view, rightfully
regarded as finally demonstrated) is essentially prejudicial in
favour of the character of all thinkable reasonable physical theories
in the mentioned sense. In what follows I wish to adduce reasons
which keep me from falling in line with the opinion of almost
all contemporary theoretical physicists. I am, in fact, firmly
convinced that the essentially statistical character of contemporary
quantum theory is solely to be ascribed to the fact that this
[theory] operates with an incomplete description of physical systems.</p>
<p>
Above all, however, the reader should be convinced that I fully
recognise the very important progress which the statistical quantum
theory has brought to theoretical physics. In the field of <em>mechanical</em>
problems - i.e., wherever it is possible to consider the interaction
of structures and of their parts with sufficient accuracy by postulating
a potential energy between material points - [this theory] even
now presents a system which, in its closed character, correctly
describes the empirical relations between statable phenomena as
they were theoretically to be expected. This theory is until now
the only one which unites the corpuscular and undulatory dual
character of matter in a logically satisfactory fashion; and the
(testable) relations, which are contained in it, are, within the
natural limits fixed by the indeterminacy-relation, <em>complete</em>.
The formal relations which are given in this theory - i.e., its
entire mathematical formalism - will probably have to be contained,
in the form of logical inferences, in every useful future theory.</p>
<p>
What does not satisfy me in that theory, from the standpoint of
principle, is its attitude towards that which appears to me to
be the programmatic aim of all physics: the complete description
of any (individual) real situation (as it supposedly exists irrespective
of any act of observation or substantiation). Whenever the positivistically
inclined modern physicist hears such a formulation his reaction
is that of a pitying smile. He says to himself: "there we
have the naked formulation of a metaphysical prejudice, empty
of content, a prejudice, moreover, the conquest of which constitutes
the major epistemological achievement of physicists within the
last quarter-century. Has any man ever perceived a 'real physical
situation'? How is it possible that a reasonable person could
today still believe that he can refute our essential knowledge
and understanding by drawing up such a bloodless ghost?"
Patience! The above laconic characterisation was not meant to
convince anyone; it was merely to indicate the point of view around
which the following elementary considerations freely group themselves.
In doing this I shall proceed as follows: I shall first of all
show in simple special cases what seems essential to me, and then
I shall make a few remarks about some more general ideas which
are involved.</p>
<p>
We consider as a physical system, in the first instance, a radioactive
atom of definite average decay time, which is practically exactly
localised at a point of the coordinate system. The radioactive
process consists in the emission of a (comparatively light) particle.
For the sake of simplicity we neglect the motion of the residual
atom after the disintegration process. Then it is possible for
us, following Gamow, to replace the rest of the atom by a space
of atomic order of magnitude, surrounded by a closed potential
energy barrier which, at a time t = 0, encloses the particle to
be emitted. The radioactive process thus schematised is then,
as is well known, to be described - in the sense of elementary
quantum mechanics - by a Psi-function in three dimensions, which
at the time t= 0 is different from zero only inside of the barrier,
but which, for positive times, expands into the outer space. This
Psi-function yields the probability that the particle, at some
chosen instant, is actually in a chosen part of space (i.e., is
actually found there by a measurement of position). On the other
hand, the Psi-function does not imply any assertion <em>concerning
the time instant of the disintegration</em> of the radioactive
atom.</p>
<p>
Now we raise the question: Can this theoretical description be
taken as the complete description of the disintegration of a single
individual atom? The immediately plausible answer is: No. For
one is, first of all, inclined to assume that the individual atom
decays at a definite time; however, such a definite time-value
is not implied in the description by the Psi-function. If, therefore,
the individual atom has a definite disintegration time, then as
regards the individual atom its description by means of the Psi-function
must be interpreted as an incomplete description. In this case
the Psi-function is to be taken as the description, not of a singular
system, but of an ideal ensemble of systems. In this case one
is driven to the conviction that a complete description of a single
system should, after all, be possible, but for such complete description
there is no room in the conceptual world of statistical quantum
theory.</p>
<p>
To this the quantum theorist will reply: This consideration stands
and falls with the assertion that there actually is such a thing
as a definite time of disintegration of the individual atom (an
instant of time existing independently of any observation). But
this assertion is, from my point of view, not merely arbitrary
but actually meaningless. The assertion of the existence of a
definite time-instant for the disintegration makes sense only
if I can in principle determine this time-instant empirically.
Such an assertion, however, (which, finally, leads to the attempt
to prove the existence of the particle outside of the force barrier),
involves a definite disturbance of the system in which we are
interested, so that the result of the determination does not permit
a conclusion concerning the status of the undisturbed system.
The supposition, therefore, that a radioactive atom has a definite
disintegration-time is not justified by anything whatsoever; it
is, therefore, not demonstrated either that the Psi-function can
not be conceived as a complete description of the individual system.
The entire alleged difficulty proceeds from the fact that one
postulates something not observable as "real." (This
the answer of the quantum theorist.)</p>
<p>
What I dislike in this kind of argumentation is the basic positivistic
attitude, which from my point of view is untenable, and which
seems to me to come to the same thing as Berkeley's principle,
<em>esse est percipi</em>. "Being" is always something
which is mentally constructed by us, that is, something which
we freely posit (in the logical sense). The justification of such
constructs does not lie in their derivation from what is given
by the senses. Such a type of derivation (in the sense of logical
deducibility) is nowhere to be had, not even in the domain of
pre-scientific thinking. The justification of the constructs,
which represent "reality" for us, lies alone in their
quality of making intelligible what is sensorily given (the vague
character of this expression is here forced upon me by my striving
for brevity). Applied to the specifically chosen example this
consideration tells us the following:</p>
<p>
One may not merely ask: "Does a definite time instant for
the transformation of a single atom exist?" but rather: "Is
it, within the framework of our theoretical total construction,
reasonable to posit the existence of a definite point of time
for the transformation of a single atom?" One may not even
ask what this assertion <em>means</em>. One can only ask whether
such a proposition, within the framework of the chosen conceptual
system - with a view to its ability to grasp theoretically what
is empirically given - is reasonable or not.</p>
<p>
Insofar, then, as a quantum-theoretician takes the position that
the description by means of a Psi-function refers only to an ideal
systematic totality but in no wise to the individual system, he
may calmly assume a definite point of time for the transformation.
But, if he represents the assumption that his description by way
of the Psi-function is to be taken as the complete description of
the individual system, then he must reject the postulation of
a specific decay-time. He can justifiably point to the fact that
a determination of the instant of disintegration is not possible
on an isolated system, but would require disturbances of such
a character that they must not be neglected in the critical examination
of the situation. It would, for example, not be possible to conclude
from the empirical statement that the transformation has already
taken place, that this would have been the case if the disturbances
of the system had not taken place.</p>
<p>
As far as I know, it was E. Schrödinger who first called
attention to a modification of this consideration, which shows
an interpretation of this type to be impracticable. Rather than
considering a system which comprises only a radioactive atom (and
its process of transformation), one considers a system which includes
also the means for ascertaining the radioactive transformation
- for example, a Geiger-counter with automatic registration-mechanism.
Let this latter include a registration-strip, moved by a clockwork,
upon which a mark is made by tripping the counter. True, from
the point of view of quantum mechanics this total system is very
complex and its configuration space is of very high dimension.
But there is in principle no objection to treating this entire
system from the standpoint of quantum mechanics. Here too the
theory determines the probability of each configuration of all
its co-ordinates for every time instant. If one considers all
configurations of the coordinates, for a time large compared with
the average decay time of the radioactive atom, there will be
(at most) <em>one</em> such registration-mark on the paper strip.
To each coordinate configuration corresponds a definite position
of the mark on the paper strip. But, inasmuch as the theory yields
only the relative probability of the thinkable co-ordinate-configurations,
it also offers only relative probabilities for the positions of
the mark on the paper strip, but no definite location for this
mark.</p>
<p>
In this consideration the location of the mark on the strip plays
the role played in the original consideration by the time of the
disintegration. The reason for the introduction of the system
supplemented by the registration-mechanism lies in the following.
The location of the mark on the registration-strip is a fact which
belongs entirely within the sphere of macroscopic concepts, in
contradistinction to the instant of disintegration of a single
atom. If we attempt [to work with] the interpretation that the
quantum-theoretical description is to be understood as a complete
description of the individual system, we are forced to the interpretation
that the location of the mark on the strip is nothing which belongs
to the system per se, but that the existence of that location
is essentially dependent upon the carrying out of an observation
made on the registration-strip. Such an interpretation is certainly
by no means absurd from a purely logical standpoint, yet there
is hardly likely to be anyone who would be inclined to consider
it seriously. For, in the macroscopic sphere it simply is considered
certain that one must adhere to the program of a realistic description
in space and time; whereas in the sphere of microscopic situations
one is more readily inclined to give up, or at least to modify,
this program.</p>
<p>
This discussion was only to bring out the following. One arrives
at very implausible theoretical conceptions, if one attempts to
maintain the thesis that the statistical quantum theory is in
principle capable of producing a complete description of an individual
physical system. On the other hand, those difficulties of theoretical
interpretation disappear, if one views the quantum-mechanical
description as the description of ensembles of systems.</p>
<p>
I reached this conclusion as the result of quite different types
of considerations. I am convinced that everyone who will take
the trouble to carry through such reflections conscientiously
will find himself finally driven to this interpretation of quantum-theoretical
description (the Psi-function is to be understood as the description
not of a single system but of an ensemble of systems).</p>
<p>
Roughly stated the conclusion is this: Within the framework of
statistical quantum theory there is no such thing as a complete
description of the individual system. More cautiously it might
be put as follows: The attempt to conceive the quantum-theoretical
description as the complete description of the individual systems
leads to unnatural theoretical interpretations, which become immediately
unnecessary if one accepts the interpretation that the description
refers to ensembles of systems and not to individual systems.
In that case the whole "egg-walking" performed in order
to avoid the "physically real" becomes superfluous.
There exists, however, a simple psychological reason for the fact
that this most nearly obvious interpretation is being shunned.
For if the statistical quantum theory does not pretend to describe
the individual system (and its development in time) completely,
it appears unavoidable to look elsewhere for a complete description
of the individual system; in doing so it would be clear from the
very beginning that the elements of such a description are not
contained within the conceptual scheme of the statistical quantum
theory. With this one would admit that, in principle, this scheme
could not serve as the basis of theoretical physics. Assuming
the success of efforts to accomplish a complete physical description,
the statistical quantum theory would, within the framework of
future physics, take an approximately analogous position to the
statistical mechanics within the framework of classical mechanics.
I am rather firmly convinced that the development of theoretical
physics will be of this type; but the path will be lengthy and
difficult.</p>
<p>
I now imagine a quantum theoretician who may even admit that the
quantum-theoretical description refers to ensembles of systems
and not to individual systems, but who, nevertheless, clings to
the idea that the type of description of the statistical quantum
theory will, in its essential features, be retained in the future.
He may argue as follows: True, I admit that the quantum-theoretical
description is an incomplete description of the individual system.
I even admit that a complete theoretical description is, in principle,
thinkable. But I consider it proven that the search for such a
complete description would be aimless. For the lawfulness of nature
is thus constituted that the laws can be completely and suitably
formulated within the framework of our incomplete description.</p>
<p>
To this I can only reply as follows: Your point of view - taken
as theoretical possibility - is incontestable. For me, however,
the expectation that the adequate formulation of the universal
laws involves the use of <em>all</em> conceptual elements which
are necessary for a complete description, is more natural. It
is furthermore not at all surprising that, by using an incomplete
description, (in the main) only statistical statements can be
obtained out of such description. If it should be possible to
move forward to a complete description, it is likely that the
laws would represent relations among all the conceptual elements
of this description which, <em>per se</em>, have nothing to do with
statistics.</p>
<p>
A few more remarks of a general nature concerning concepts and
[also] concerning the insinuation that a concept - for example
that of the real - is something metaphysical (and therefore to
be rejected). A basic conceptual distinction, which is a necessary
prerequisite of scientific and pre-scientific thinking, is the
distinction between "sense-impressions" (and the recollection
of such) on the one hand and mere ideas on the other. There is
no such thing as a conceptual definition of this distinction (aside
from, circular definitions, i.e., of such as make a hidden use
of the object to be defined). Nor can it be maintained that at
the base of this distinction there is a type of evidence, such
as underlies, for example, the distinction between red and blue.
Yet, one needs this distinction in order to be able to overcome
solipsism. Solution: we shall make use of this distinction unconcerned
with the reproach that, in doing so, we are guilty of the metaphysical
"original sin." We regard the distinction as a category
which we use in order that we might the better find our way in
the world of immediate sensations. The "sense" and the
justification of this distinction lies simply in this achievement.
But this is only a first step. We represent the sense-impressions
as conditioned by an "objective" and by a "subjective"
factor. For this conceptual distinction there also is no logical-philosophical
justification. But if we reject it, we cannot escape solipsism.
It is also the presupposition of every kind of physical thinking.
Here too, the only justification lies in its usefulness. We are
here concerned with "categories" or schemes of thought,
the selection of which is, in principle, entirely open to us and
whose qualification can only be judged by the degree to which
its use contributes to making the totality of the contents of
consciousness "intelligible." The above mentioned "objective
factor" is the totality of such concepts and conceptual relations
as are thought of as independent of experience, viz., of perceptions.
So long as we move within the thus programmatically fixed sphere
of thought we are thinking physically. Insofar as physical thinking
justifies itself, in the more than once indicated sense, by its
ability to grasp experiences intellectually, we regard it as "knowledge
of the real."</p>
<p>
After what has been said, the "real" in physics is to
be taken as a type of program, to which we are, however, not forced
to cling <em>a priori</em>. No one is likely to be inclined to attempt
to give up this program within the realm of the "macroscopic"
(location of the mark on the paper strip "real"). But
the "macroscopic" and the "microscopic" are
so inter-related that it appears impracticable to give up this
program in the "microscopic" alone. Nor can I see any
occasion anywhere within the observable facts of the quantum-field
for doing so, unless, indeed, one clings <em>a priori</em> to the
thesis that the description of nature by the statistical scheme
of quantum-mechanics is final.</p>
<p>
The theoretical attitude here advocated is distinct from that
of Kant only by the fact that we do not conceive of the "categories"
as unalterable (conditioned by the nature of the understanding)
but as (in the logical sense) free conventions. They appear to
be <em>a priori</em> only insofar as thinking without the positing
of categories and of concepts in general would be as impossible
as is breathing in a vacuum.</p>
<p>
From these meagre remarks one will see that to me it must seem
a mistake to permit theoretical description to be directly dependent
upon acts of empirical assertions, as it seems to me to be intended
[for example] in Bohr's principle of complementarity, the sharp
formulation of which, moreover, I have been unable to achieve
despite much effort which I have expended on it. From my point
of view [such] statements or measurements can occur only as special
instances, viz., parts, of physical description, to which I cannot
ascribe any exceptional position above the rest.</p>
<p>
The above mentioned essays by Bohr and Pauli contain a historical
appreciation of my efforts in the area of physical statistics
and quanta and, in addition, an accusation which is brought forward
in the friendliest of fashion. In briefest formulation this latter
runs as follows: "Rigid adherence to classical theory."
This accusation demands either a defence or the confession of
guilt. The one or the other is, however, being rendered much more
difficult because it is by no means immediately clear what is
meant by "classical theory." Newton's theory deserves
the name of a classical theory. It has nevertheless been abandoned
since Maxwell and Hertz have shown that the idea of forces at
a distance has to be relinquished and that one cannot manage without
the idea of continuous "fields." The opinion that continuous
fields are to be viewed as the only acceptable basic concepts,
which must also be assumed to underlie the theory of the material
particles, soon won out. Now this conception became, so to speak,
"classical;" but a proper, and in principle complete,
<em>theory</em> has not grown out of it. Maxwell's theory of the
electric field remained a torso, because it was unable to set
up laws for the behaviour of electric density, without which there
can, of course, be no such thing as an electro-magnetic field.
Analogously the general theory of relativity furnished then a
field theory of gravitation, but no theory of the field-creating
masses. (These remarks presuppose it as self-evident that a field-theory
may not contain any singularities, i.e., any positions or parts
in space in which the field laws are not valid.)</p>
<p>
Consequently there is, strictly speaking, today no such thing
as a classical field-theory; one can, therefore, also not rigidly
adhere to it. Nevertheless, field-theory does exist as a program:
"Continuous functions in the four-dimensional [continuum]
as basic concepts of the theory." Rigid adherence to this
program can rightfully be asserted of me. The deeper ground for
this lies in the following: The theory of gravitation showed me
that the non-linearity of these equations results in the fact
that this theory yields interactions among structures (localised
things) at all. But the theoretical search for non-linear equations
is hopeless (because of too great variety of possibilities), if
one does not use the general principle of relativity (invariance
under general continuous co-ordinate-transformations). In the
meantime, however, it does not seem possible to formulate this
principle, if one seeks to deviate from the above program. Herein
lies a coercion which I cannot evade. This for my justification.</p>
<p>
Nevertheless I am forced to weaken this justification by a confession.
If one disregards quantum structure, one can justify the introduction
of the g<sub>ik</sub> "operationally" by pointing to the fact that
one can hardly doubt the physical reality of the elementary light
cone which belongs to a point. In doing so one implicitly makes
use of the existence of an arbitrarily sharp optical signal. Such
a signal, however, as regards the quantum facts, involves infinitely
high frequencies and energies, and therefore a complete destruction
of the field to be determined. That kind of a physical justification
for the introduction of the g<sub>ik</sub> falls by the wayside, unless one
limits himself to the "macroscopic." The application
of the formal basis of the general theory of relativity to the
"microscopic" can, therefore, be based only upon the
fact that that tensor is the formally simplest covariant structure
which can come under consideration. Such argumentation, however,
carries no weight with anyone who doubts that we have to adhere
to the continuum at all. All honour to his doubt - but where else
is there a passable road?</p>
<p>
Now I come to the theme of the relation of the theory of relativity
to philosophy. Here it is Reichenbach's piece of work which, by
the precision of deductions and by the sharpness of his assertions,
irresistibly invites a brief commentary. Robertson's lucid discussion
also is interesting mainly from the standpoint of general epistemology,
although it limits itself to the narrower theme of "the theory
of relativity and geometry." To the question: Do you consider
true what Reichenbach has here asserted, I can answer only with
Pilate's famous question: "<em>What is truth?</em>"</p>
<p>
Let us first take a good look at the question: Is a geometry -
looked at from the physical point of view - verifiable (viz.,
falsifiable) or not? Reichenbach, together with Helmholtz, says:
Yes, provided that the empirically given solid body realises the
concept of "distance." Poincare says no and consequently
is condemned by Reichenbach. Now the following short conversation
takes place:</p>
<p>
<em><strong>Poincare</strong></em>: The empirically given bodies are not rigid,
and consequently can not be used for the embodiment of geometric
intervals. Therefore, the theorems of geometry are not verifiable.</p>
<p>
<em><strong>Reichenbach</strong></em>: I admit that there are no bodies which
can be immediately adduced for the "real definition"
of the interval. Nevertheless, this real definition can be achieved
by taking the thermal volume-dependence, elasticity, electro-
and magnetostriction, etc., into consideration. That this is really
[and] without contradiction possible, classical physics has surely
demonstrated.</p>
<p>
<em><strong>Poincare</strong></em>: In gaining the real definition improved
by yourself you have made use of physical laws, the formulation
of which presupposes (in this case) Euclidean geometry. The verification,
of which you have spoken, refers, therefore, not merely to geometry
but to the entire system of physical laws which constitute its
foundation. An examination of geometry by itself is consequently
not thinkable. - Why should it consequently not be entirely up
to me to choose geometry according to my own convenience (i.e.,
Euclidean) and to fit the remaining (in the usual sense "physical")
laws to this choice in such manner that there can arise no contradiction
of the whole with experience?</p>
<p>
(The conversation cannot be continued in this fashion because
the respect of the [present] writer for Poincare's superiority
as thinker and author does not permit it; in what follows therefore,
an anonymous non-positivist is substituted for Poincare. - )</p>
<p>
<em><strong>Reichenbach</strong></em>: There is something quite attractive
in this conception. But, on the other hand, it is noteworthy that
the adherence to the objective meaning of length and to the interpretation
of the differences of co-ordinates as distances (in pre-relativistic
physics) has not led to complications. Should we not, on the basis
of this astounding fact, be justified in operating further at
least tentatively with the concept of the measurable length, as
if there were such things as rigid measuring-rods. In any case
it would have been impossible for Einstein de facto (even if not
theoretically) to set up the theory of general relativity, if
he had not adhered to the objective meaning of length.</p>
<p>
Against Poincare's suggestion it is to be pointed out that what
really matters is not merely the greatest possible simplicity
of the geometry alone, but rather the greatest possible simplicity
of all of physics (inclusive of geometry). This is what is, in
the first instance, involved in the fact that today we must decline
as unsuitable the suggestion to adhere to Euclidean geometry.</p>
<p>
<em><strong>Non-Positivist</strong></em>: If, under the stated circumstances,
you hold distance to be a legitimate concept, how then is it with
your basic principle (meaning = verifiability) ? Do you not have
to reach the point where you must deny the meaning of geometrical
concepts and theorems and to acknowledge meaning only within the
completely developed theory of relativity (which, however, does
not yet exist at all as a finished product)? Do you not have to
admit that, in your sense of the word, no "meaning"
can be attributed to the individual concepts and assertions of
a physical theory at all, and to the entire system only insofar
as it makes what is given in experience "intelligible?"
Why do the individual concepts which occur in a theory require
any specific Justification anyway, if they are only indispensable
within the framework of the logical structure of the theory, and
the theory only in its entirety validates itself?</p>
<p>
It seems to me, moreover, that you have not at all done justice
to the really significant philosophical achievement of Kant. From
Hume Kant had learned that there are concepts (as, for example,
that of causal connection), which play a dominating role in our
thinking, and which, nevertheless, can not be deduced by means
of a logical process from the empirically given (a fact which
several empiricists recognise, it is true, but seem always again
to forget). What justifies the use of such concepts? Suppose he
had replied in this sense: Thinking is necessary in order to understand
the empirically given, and concepts <em>and "categories"
are necessary as indispensable elements of thinking</em>. If he
had remained satisfied with this type of an answer, he would have
avoided scepticism and you would not have been able to find fault
with him. He, however, was misled by the erroneous opinion, difficult
to avoid in his time - that Euclidean geometry is necessary to
thinking and offers <em>assured</em> (i.e., not dependent upon sensory
experience) knowledge concerning the objects of "external"
perception. From this easily understandable error he concluded
the existence of synthetic judgments <em>a priori</em>, which are
produced by the reason alone, and which, consequently, can lay
claim to absolute validity. I think your censure is directed less
against Kant himself than against those who today still adhere
to the errors of "synthetic judgments <em>a priori</em>."</p>
<hr class="section">
<p>
I can hardly think of anything more stimulating as the basis for
discussion in an epistemological seminar than this brief essay
by Reichenbach (best taken together with Robertson's essay).</p>
<p>
What has been discussed thus far is closely related to Bridgman's
essay, so that it will be possible for me to express myself quite
briefly without having to harbour too much fear that I shall be
misunderstood. In order to be able to consider a logical system
as physical theory it is not necessary to demand that all of its
assertions can be independently interpreted and "tested"
"operationally;" <em>de facto</em> this has never yet
been achieved by any theory and can not at all be achieved. In
order to be able to consider a theory as a <em>physical</em> theory
it is only necessary that it implies empirically testable assertions
in general.</p>
<p>
This formulation is insofar entirely unprecise as "testability"
is a quality which refers not merely to the assertion itself but
also to the co-ordination of concepts, contained in it, with experience.
But it is probably hardly necessary for me to enter upon a discussion
of this ticklish problem, inasmuch as it is not likely that there
exist any essential differences of opinion at this point. - </p>
<p>
<em><strong>Margenau</strong></em>;. This essay contains several original
specific remarks, which I must consider separately:</p>
<p>
To his Sec. I: "Einstein's position . . . contains features
of rationalism and extreme empiricism...." This remark is
entirely correct. From whence comes this fluctuation? A logical
conceptual system is physics insofar as its concepts and assertions
are necessarily brought into relationship with the world of experiences.
Whoever desires to set up such a system will find a dangerous
obstacle in arbitrary choice (<em>embarras de richesse</em>). This
is why he seeks to connect his concepts as directly and necessarily
as possible with the world of experience. In this case his attitude
is empirical. This path is often fruitful, but it is always open
to doubt, because the specific concept and the individual assertion
can, after all, assert something confronted by the empirically
given only in connection with the entire system. He then recognises
that there exists no logical path from the empirically given to
that conceptual world. His attitude becomes then more nearly rationalistic,
because he recognises the logical independence of the system.
The danger in this attitude lies in the fact that in the search
for the system one can lose every contact with the world of experience.
A wavering between these extremes appears to me unavoidable.</p>
<p>
To his Sec. 2: I did not grow up in the Kantian tradition, but
came to understand the truly valuable which is to be found in
his doctrine, alongside of errors which today are quite obvious,
only quite late. It is contained in the sentence: "The real
is not given to us, but put to us (<em>aufgegeben</em>) (by way
of a riddle)." This obviously means: There is such a thing
as a conceptual construction for the grasping of the inter-personal,
the authority of which lies purely in its validation. This conceptual
construction refers precisely to the "real" (by definition),
and every further question concerning the "nature of the
real" appears empty.</p>
<p>
To his Sec. 4: This discussion has not convinced me at all. For
it is clear <em>per se</em> that every magnitude and every assertion
of a theory lays claim to "objective meaning" (within
the framework of the theory). A problem arises only when we ascribe
group-characteristics to a theory, i.e., if we assume or postulate
that the same physical situation admits of several ways of description,
each of which is to be viewed as equally justified. For in this
case we obviously cannot ascribe complete objective meaning (for
example the x-component of the velocity of a particle or its x-coordinates)
to the individual (not eliminable) magnitudes. In this case, which
has always existed in physics, we have to limit ourselves to ascribing
objective meaning to the general laws of the theory, i.e., we
have to demand that these laws are valid for every description
of the system which is recognised as justified by the group. It
is, therefore, not true that "objectivity" presupposes
a group-characteristic, but that the group-characteristic forces
a refinement of the concept of objectivity. The positing of group
characteristics is heuristically so important for theory, because
this characteristic always considerably limits the variety of
the mathematically meaningful laws.</p>
<p>
Now there follows a claim that the group-characteristics determine
that the laws must have the form of differential equations; I
can not at all see this. Then Margenau insists that the laws expressed
by way of the differential equations (especially the partial ones)
are "least specific." Upon what does he base this contention?
If they could be proved to be correct, it is true that the attempt
to ground physics upon differential equations would then turn
out to be hopeless. We are, however, far from being able to judge
whether differential laws of the type to be considered have any
solutions at all which are everywhere singularity-free; and, if
so, whether there are too many such solutions.</p>
<p>
And now just a remark concerning the discussions about the Einstein-Podolski-Rosen
Paradox. I do not think that Margenau's defence of the "orthodox"
("orthodox" refers to the thesis that the t-function
characterises the individual system <em>exhaustively</em>) quantum
position hits the essential [aspects]. Of the "orthodox"
quantum theoreticians whose position I know, Niels Bohr's seems
to me to come nearest to doing justice to the problem. Translated
into my own way of putting it, he argues as follows:</p>
<p>
If the partial systems A and B form a total system which is described
by its Psi-function Psi/(<em>AB</em>), there is no reason why any
mutually independent existence (state of reality) should be ascribed
to the partial systems <em>A</em> and <em>B</em> viewed separately,
<em><strong>not even if the partial systems are spatially separated
from each other at the particular time under consideration</strong></em>.
The assertion that, in this latter case, the real situation of
<em>B</em> could not be (directly) influenced by any measurement
taken on <em>A</em> is, therefore, within the framework of quantum
theory, unfounded and (as the paradox shows) unacceptable.</p>
<p>
By this way of looking at the matter it becomes evident that the
paradox forces us to relinquish one of the following two assertions:</p>
<p class="indentb">
(1) the description by means of the Psi-function is <em>complete</em></p>
<p class="indentb">
(2) the real states of spatially separated objects are independent
of each other.</p>
<p>
On the other hand, it is possible to adhere to (2), if one regards
the Psi-function as the description of a (statistical) ensemble
of systems (and therefore relinquishes (1) ) . However, this
view blasts the framework of the "orthodox quantum theory."</p>
<p>
One more remark to Margenau's Sec. 7. In the characterisation
of quantum mechanics the brief little sentence will be found:
"on the classical level it corresponds to ordinary dynamics."
This is entirely correct - <em>cum grano salis</em>; and it is precisely
this granum salis which is significant for the question of interpretation.</p>
<p>
If our concern is with macroscopic masses (billiard balls or stars),
we are operating with very short de Broglie-waves, which are determinative
for the behaviour of the center of gravity of such masses. This
is the reason why it is possible to arrange the quantum-theoretical
description for a reasonable time in such a manner that for the
macroscopic way of viewing things, it becomes sufficiently precise
in position as well as in momentum. It is true also that this
sharpness remains for a long time and that the quasi-points thus
represented behave just like the mass-points of classical mechanics.
However, the theory shows also that, after a sufficiently long
time, the point-like character of the Psi-function is completely
lost to the center of gravity-co-ordinates, so that one can no
longer speak of any quasi-localisation of the centers of gravity.
The picture then becomes, for example in the case of a single
macro-mass-point, quite similar to that involved in a single free
electron.</p>
<p>
If now, in accordance with the orthodox position, I view the Psi-function
as the complete description of a real matter of fact for the individual
case, I cannot but consider the essentially unlimited lack of
sharpness of the position of the (macroscopic) body as <em>real</em>.
On the other hand, however, we know that, by illuminating the
body by means of a lantern at rest against the system of co-ordinates,
we get a (macroscopically judged) sharp determination of position.
In order to comprehend this I must assume that that sharply defined
position is determined not merely by the real situation of the
observed body, but also by the act of illumination. This is again
a paradox (similar to the mark on the paper strip in the above
mentioned example). The spook disappears only if one relinquishes
the orthodox standpoint, according to which the Psi-function is
accepted as a complete description of the single system.</p>
<p>
It may appear as if all such considerations were just superfluous
learned hairsplitting, which have nothing to do with physics proper.
However, it depends precisely upon such considerations in which
direction one believes one must look for the future conceptual
basis of physics.</p>
<p>
I close these expositions, which have grown rather lengthy, concerning
the interpretation of quantum theory with the reproduction of
a brief conversation which I had with an important theoretical
physicist. He: "I am inclined to believe in telepathy."
I: "This has probably more to do with physics than with psychology."
He: "Yes."</p>
<hr class="section">
<p>
The essays by Lenzen and Northrop both aim to treat my occasional
utterances of epistemological content systematically. From those
utterances Lenzen constructs a synoptic total picture, in which
what is missing in the utterances is carefully and with delicacy
of feeling supplied. Everything said therein appears to me convincing
and correct. Northrop uses these utterances as point of departure
for a comparative critique of the major epistemological systems.
I see in this critique a masterpiece of unbiased thinking and
concise discussion, which nowhere permits itself to be diverted
from the essential.</p>
<p>
The reciprocal relationship of epistemology and science is of
noteworthy kind. They are dependent upon each other. Epistemology
without contact with science becomes an empty scheme. Science
without epistemology is - insofar as it is thinkable at all -
primitive and muddled. However, no sooner has the epistemologist,
who is seeking a clear system, fought his way through to such
a system, than he is inclined to interpret the thought-content
of science in the sense of his system and to reject whatever does
not fit into his system. The scientist, however, cannot afford
to carry his striving for epistemological systematic that far.
He accepts gratefully the epistemological conceptual analysis;
but the external conditions, which are set for him by the facts
of experience, do not permit him to let himself be too much restricted
in the construction of his conceptual world by the adherence to
an epistemological system. He therefore must appear to the systematic
epistemologist as a type of unscrupulous opportunist: he appears
as <em><strong>realist</strong></em> insofar as he seeks to describe a world
independent of the acts of perception; as <em><strong>idealist</strong></em>
insofar as he looks upon the concepts and theories as the free
inventions of the human spirit (not logically derivable from what
is empirically given); as <em><strong>positivist</strong></em> insofar as
he considers his concepts and theories justified only to the extent
to which they furnish a logical representation of relations among
sensory experiences. He may even appear as <em><strong>Platonist</strong></em>
or <em><strong>Pythagorean</strong></em> insofar as he considers the viewpoint
of logical simplicity as an indispensable and effective tool of
his research.</p>
<p>
All of this is splendidly elucidated in Lenzen's and Northrop's
essays.</p>
<hr class="section">
<p>
And now a few remarks concerning the essays by E. A. Milne, G.
Lemaitre, and L. Infeld as concerns the cosmological problem:</p>
<p>
Concerning Milne's ingenious reflections I can only say that I
find their theoretical basis too narrow. From my point of view
one cannot arrive, by way of theory, at any at least somewhat
reliable results in the field of cosmology, if one makes no use
of the principle of general relativity.</p>
<p>
As concerns Lemaître's arguments in favour of the so-called
"cosmological constant" in the equations of gravitation,
I must admit that these arguments do not appear to me as sufficiently
convincing in view of the present state of our knowledge.</p>
<p>
The introduction of such a constant implies a considerable renunciation
of the logical simplicity of theory, a renunciation which appeared
to me unavoidable only so long as one had no reason to doubt the
essentially static nature of space. After Hubble's discovery of
the "expansion" of the stellar system, and since Friedmann's
discovery that the unsupplemented equations involve the possibility
of the existence of an average (positive) density of matter in
an expanding universe, the introduction of such a constant appears
to me, from the theoretical standpoint, at present unjustified.</p>
<p>
The situation becomes complicated by the fact that the entire
duration of the expansion of space to the present, based on the
equations in their simplest form, turns out smaller than appears
credible in view of the reliably known age of terrestrial minerals.
But the introduction of the "cosmological constant"
offers absolutely no natural escape from the difficulty. This
latter difficulty is given by way of the numerical value of Hubble's
expansion-constant and the age-measurement of minerals, completely
independent of any cosmological theory, provided that one interprets
the Hubble-effect as Doppler effect.</p>
<p>
Everything finally depends upon the question: Can a spectral line
be considered as a measure of a "proper time" (<em>Eigen-Zeit</em>) ds
(ds<sup>2</sup> = g<sub>ik</sub>dx<sub>i</sub>dx<sub>k</sub>), (if one takes into consideration regions of
cosmic dimensions)? Is there such a thing as a natural object
which incorporates the "natural-measuring-stick" independently
of its position in four-dimensional space? The affirmation of
this question made the invention of the general theory of relativity
<em>psychologically</em> possible; however this supposition is logically
not necessary. For the construction of the present theory of relativity
the following is essential:</p>
<p class="indentb">
(1) Physical things are described by continuous functions, field-variables
of four co-ordinates. As long as the topological connection is
preserved, these latter can be freely chosen.</p>
<p class="indentb">
(2) The field-variables are tensor-components; among the tensors
is a symmetrical tensor g<sub>ik</sub> for the description of the gravitational
field.</p>
<p class="indentb">
(3) There are physical objects, which (in the macroscopic field)
measure the invariant <em>ds</em>.</p>
<p>
If (1) and (2) are accepted, (3) is plausible, but not necessary.
The construction of mathematical theory rests exclusively upon
(1) and (2).</p>
<p>
A complete theory of physics as a totality, in accordance with
(1) and (2) does not yet exist. If it did exist, there would be
no room for the supposition (3). For the objects used as tools
for measurement do not lead an independent existence alongside
of the objects implicated by the field-equations. - - It is not
necessary that one should permit one's cosmological considerations
to be restrained by such a sceptical attitude; but neither should
one close one's mind towards them from the very beginning.</p>
<hr class="section">
<p>
These reflections bring me to Karl Menger's essay. For the quantum-facts
suggest the suspicion that doubt may also be raised concerning
the ultimate usefulness of the program characterised in (1) and
(2). There exists the possibility of doubting only (2) and, in
doing so, to question the possibility of being able adequately
to formulate the laws by means of differential equations, without
dropping (1). The more radical effort of surrendering (1) with
(2) appears to me - and I believe to Dr. Menger also - to lie
more closely at hand. So long as no one has new concepts, which
appear to have sufficient constructive power, mere doubt remains;
this is, unfortunately, my own situation. Adhering to the continuum
originates with me not in a prejudice, but arises out of the fact
that I have been unable to think up anything organic to take its
place. How is one to conserve four-dimensionality in essence (or
in near approximation) and [at the same time] surrender the continuum?</p>
<hr class="section">
<p>
L. Infeld's essay is an independently understandable, excellent
introduction into the so-called "cosmological problem"
of the theory of relativity, which critically examines all essential
points.</p>
<hr class="section">
<p>
Max von Laue: An historical investigation of the development of
the conservation postulates, which, in my opinion, is of lasting
value. I think it would be worth while to make this essay easily
accessible to students by way of independent publication.</p>
<hr class="section">
<p>
In spite of serious efforts I have not succeeded in quite understanding
H. Dingle's essay, not even as concerns its aim. Is the idea of
the special theory of relativity to be expanded in the sense that
new group-characteristics, which are not implied by the Lorentz-invariance,
are to be postulated? Are these postulates empirically founded
or only by way of a trial "posited"? Upon what does
the confidence in the existence of such group-characteristics
rest?</p>
<hr class="section">
<p>
Kurt Gödel's essay constitutes, in my opinion, an important
contribution to the general theory of relativity, especially to
the analysis of the concept of time. The problem here involved
disturbed me already at the time of the building up of the general
theory of relativity, without my having succeeded in clarifying
it. Entirely aside from the relation of the theory of relativity
to idealistic philosophy or to any philosophical formulation of
questions, the problem presents itself as follows:</p>
<p><img src="../../images/einstei2.gif" vspace="3" hspace="3" align="right" alt="event space">
</p><p>
If <em>P</em> is a world-point, a "light-cone" (ds<sup>2</sup>= 0)
belongs to it. We draw a "time-like" world-line through
P and on this line observe the close world-points <em>B</em> and
<em>A</em>, separated by <em>P</em>. Does it make any sense to provide
the world-line with an arrow, and to assert that <em>B</em> is before
<em>P</em>, <em>A</em> after <em>P</em>? Is what remains of temporal
connection between world-points in the theory of relativity an
asymmetrical relation, or would one be just as much justified,
from the physical point of view, to indicate the arrow in the
opposite direction and to assert that <em>A is before P</em>,
<em>B after P?</em></p>
<p>
In the first instance the alternative is decided in the negative,
if we are justified in saying: If it is possible to send (to telegraph)
a signal (also passing by in the close proximity of <em>P</em>)
from <em>B</em> to <em>A</em>, but not from <em>A</em> to <em>B</em>,
then the one-sided (asymmetrical) character of time is secured,
i.e., there exists no free choice for the direction of the arrow.
What is essential in this is the fact that the sending of a signal
is, in the sense of thermodynamics, an irreversible process, a
process which is connected with the growth of entropy (<em>whereas,
according to our present knowledge</em>, all elementary processes
are reversible).</p>
<p>
If, therefore, <em>B</em> and <em>A</em> are two, sufficiently neighbouring,
world-points, which can be connected by a time-like line, then
the assertion: "<em>B</em> is before <em>A</em>," makes
physical sense. But does this assertion still make sense, if the
points, which are connectable by the time-like line, are arbitrarily
far separated from each other? Certainly not, if there exist point-series
connectable by time-like lines in such a way that each point precedes
temporally the preceding one, <em>and if the series is closed in
itself</em>. In that case the distinction "earlier-later"
is abandoned for world-points which lie far apart in a cosmological
sense, and those paradoxes, regarding the <em>direction</em> of
the causal connection, arise, of which Mr. Gödel has spoken.</p>
<p>
Such cosmological solutions of the gravitation-equations (with
not vanishing A-constant) have been found by Mr. Gödel. It
will be interesting to weigh whether these are not to be excluded
on physical grounds.</p>
<hr class="section">
<p>
I have the distressing feeling that I have expressed myself, in
this reply, not merely somewhat longwindedly but also rather sharply.
This observation may serve as my excuse: one can really quarrel
only with his brothers or close friends; others are too alien
[for that].</p>
<hr class="section">
<p>
P.S. The preceding remarks refer to essays which were in my hands
at the end of January 1949. Inasmuch as the volume was to have
appeared in March, it was high time to write down these reflections.</p>
<p>
After they had been concluded I learned that the publication of
the volume would experience a further delay and that some additional
important essays had come in. I decided, nevertheless, not to
expand my remarks further, which had already become too long,
and to desist from taking any position with reference to those
essays which came into my hands after the conclusion of my remarks.</p>
<hr class="end">
<p class="footer">
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</body> |
Albert Einstein (1949)
Einstein's Reply to Criticisms
Source: From Albert Einstein: Philosopher-Scientist (1949), from The Library of Living Philosophers Series;
Published: by Cambridge University Press, 1949. Including Neils Bohr's report of conversations with Einstein and Einstein's, reply reproduced here.
BY WAY of introduction I must remark that it was not easy for
me to do justice to the task of expressing myself concerning the
essays contained in this volume. The reason lies in the fact that
the essays refer to entirely too many subjects, which, at the
present state of our knowledge, are only loosely connected with
each other. I first attempted to discuss the essays individually.
However, I abandoned this procedure because nothing even approximately
homogeneous resulted, so that the reading of it could hardly have
been either useful or enjoyable. I finally decided, therefore,
to order these remarks, as far as possible, according to topical
considerations.
Furthermore, after some vain efforts, I discovered that the mentality
which underlies a few of the essays differs so radically from
my own, that I am incapable of saying anything useful about them.
This is not to be interpreted that I regard those essays - insofar
as their content is at all meaningful to me - less highly than
I do those which lie closer to my own ways of thinking, to which
[latter] I dedicate the following remarks.
To begin with I refer to the essays of Wolfgang Pauli and Max
Born. They describe the content of my work concerning quanta and
statistics in general in their inner consistency and in their
participation in the evolution of physics during the last half
century. It is meritorious that they have done this: For only
those who have successfully wrestled with the problematic situations
of their own age can have a deep insight into those situations;
unlike the later historian, who finds it difficult to make abstractions
from those concepts and views which appear to his generation as
established, or even as self-evident. Both authors deprecate the
fact that I reject the basic idea of contemporary statistical
quantum theory, insofar as I do not believe that this fundamental
concept will provide a useful basis for the whole of physics.
More of this later.
I now come to what is probably the most interesting subject which
absolutely must be discussed in connection with the detailed arguments
of my highly esteemed colleagues Born, Pauli, Heitler, Bohr, and
Margenau. They are all firmly convinced that the riddle of the
double nature of all corpuscles (corpuscular and undulatory character)
has in essence found its final solution in the statistical quantum
theory. On the strength of the successes of this theory they consider
it proved that a theoretically complete description of a system
can, in essence, involve only statistical assertions concerning
the measurable quantities of this system. They are apparently
all of the opinion that Heisenberg's indeterminacy-relation (the
correctness of which is, from my own point of view, rightfully
regarded as finally demonstrated) is essentially prejudicial in
favour of the character of all thinkable reasonable physical theories
in the mentioned sense. In what follows I wish to adduce reasons
which keep me from falling in line with the opinion of almost
all contemporary theoretical physicists. I am, in fact, firmly
convinced that the essentially statistical character of contemporary
quantum theory is solely to be ascribed to the fact that this
[theory] operates with an incomplete description of physical systems.
Above all, however, the reader should be convinced that I fully
recognise the very important progress which the statistical quantum
theory has brought to theoretical physics. In the field of mechanical
problems - i.e., wherever it is possible to consider the interaction
of structures and of their parts with sufficient accuracy by postulating
a potential energy between material points - [this theory] even
now presents a system which, in its closed character, correctly
describes the empirical relations between statable phenomena as
they were theoretically to be expected. This theory is until now
the only one which unites the corpuscular and undulatory dual
character of matter in a logically satisfactory fashion; and the
(testable) relations, which are contained in it, are, within the
natural limits fixed by the indeterminacy-relation, complete.
The formal relations which are given in this theory - i.e., its
entire mathematical formalism - will probably have to be contained,
in the form of logical inferences, in every useful future theory.
What does not satisfy me in that theory, from the standpoint of
principle, is its attitude towards that which appears to me to
be the programmatic aim of all physics: the complete description
of any (individual) real situation (as it supposedly exists irrespective
of any act of observation or substantiation). Whenever the positivistically
inclined modern physicist hears such a formulation his reaction
is that of a pitying smile. He says to himself: "there we
have the naked formulation of a metaphysical prejudice, empty
of content, a prejudice, moreover, the conquest of which constitutes
the major epistemological achievement of physicists within the
last quarter-century. Has any man ever perceived a 'real physical
situation'? How is it possible that a reasonable person could
today still believe that he can refute our essential knowledge
and understanding by drawing up such a bloodless ghost?"
Patience! The above laconic characterisation was not meant to
convince anyone; it was merely to indicate the point of view around
which the following elementary considerations freely group themselves.
In doing this I shall proceed as follows: I shall first of all
show in simple special cases what seems essential to me, and then
I shall make a few remarks about some more general ideas which
are involved.
We consider as a physical system, in the first instance, a radioactive
atom of definite average decay time, which is practically exactly
localised at a point of the coordinate system. The radioactive
process consists in the emission of a (comparatively light) particle.
For the sake of simplicity we neglect the motion of the residual
atom after the disintegration process. Then it is possible for
us, following Gamow, to replace the rest of the atom by a space
of atomic order of magnitude, surrounded by a closed potential
energy barrier which, at a time t = 0, encloses the particle to
be emitted. The radioactive process thus schematised is then,
as is well known, to be described - in the sense of elementary
quantum mechanics - by a Psi-function in three dimensions, which
at the time t= 0 is different from zero only inside of the barrier,
but which, for positive times, expands into the outer space. This
Psi-function yields the probability that the particle, at some
chosen instant, is actually in a chosen part of space (i.e., is
actually found there by a measurement of position). On the other
hand, the Psi-function does not imply any assertion concerning
the time instant of the disintegration of the radioactive
atom.
Now we raise the question: Can this theoretical description be
taken as the complete description of the disintegration of a single
individual atom? The immediately plausible answer is: No. For
one is, first of all, inclined to assume that the individual atom
decays at a definite time; however, such a definite time-value
is not implied in the description by the Psi-function. If, therefore,
the individual atom has a definite disintegration time, then as
regards the individual atom its description by means of the Psi-function
must be interpreted as an incomplete description. In this case
the Psi-function is to be taken as the description, not of a singular
system, but of an ideal ensemble of systems. In this case one
is driven to the conviction that a complete description of a single
system should, after all, be possible, but for such complete description
there is no room in the conceptual world of statistical quantum
theory.
To this the quantum theorist will reply: This consideration stands
and falls with the assertion that there actually is such a thing
as a definite time of disintegration of the individual atom (an
instant of time existing independently of any observation). But
this assertion is, from my point of view, not merely arbitrary
but actually meaningless. The assertion of the existence of a
definite time-instant for the disintegration makes sense only
if I can in principle determine this time-instant empirically.
Such an assertion, however, (which, finally, leads to the attempt
to prove the existence of the particle outside of the force barrier),
involves a definite disturbance of the system in which we are
interested, so that the result of the determination does not permit
a conclusion concerning the status of the undisturbed system.
The supposition, therefore, that a radioactive atom has a definite
disintegration-time is not justified by anything whatsoever; it
is, therefore, not demonstrated either that the Psi-function can
not be conceived as a complete description of the individual system.
The entire alleged difficulty proceeds from the fact that one
postulates something not observable as "real." (This
the answer of the quantum theorist.)
What I dislike in this kind of argumentation is the basic positivistic
attitude, which from my point of view is untenable, and which
seems to me to come to the same thing as Berkeley's principle,
esse est percipi. "Being" is always something
which is mentally constructed by us, that is, something which
we freely posit (in the logical sense). The justification of such
constructs does not lie in their derivation from what is given
by the senses. Such a type of derivation (in the sense of logical
deducibility) is nowhere to be had, not even in the domain of
pre-scientific thinking. The justification of the constructs,
which represent "reality" for us, lies alone in their
quality of making intelligible what is sensorily given (the vague
character of this expression is here forced upon me by my striving
for brevity). Applied to the specifically chosen example this
consideration tells us the following:
One may not merely ask: "Does a definite time instant for
the transformation of a single atom exist?" but rather: "Is
it, within the framework of our theoretical total construction,
reasonable to posit the existence of a definite point of time
for the transformation of a single atom?" One may not even
ask what this assertion means. One can only ask whether
such a proposition, within the framework of the chosen conceptual
system - with a view to its ability to grasp theoretically what
is empirically given - is reasonable or not.
Insofar, then, as a quantum-theoretician takes the position that
the description by means of a Psi-function refers only to an ideal
systematic totality but in no wise to the individual system, he
may calmly assume a definite point of time for the transformation.
But, if he represents the assumption that his description by way
of the Psi-function is to be taken as the complete description of
the individual system, then he must reject the postulation of
a specific decay-time. He can justifiably point to the fact that
a determination of the instant of disintegration is not possible
on an isolated system, but would require disturbances of such
a character that they must not be neglected in the critical examination
of the situation. It would, for example, not be possible to conclude
from the empirical statement that the transformation has already
taken place, that this would have been the case if the disturbances
of the system had not taken place.
As far as I know, it was E. Schrödinger who first called
attention to a modification of this consideration, which shows
an interpretation of this type to be impracticable. Rather than
considering a system which comprises only a radioactive atom (and
its process of transformation), one considers a system which includes
also the means for ascertaining the radioactive transformation
- for example, a Geiger-counter with automatic registration-mechanism.
Let this latter include a registration-strip, moved by a clockwork,
upon which a mark is made by tripping the counter. True, from
the point of view of quantum mechanics this total system is very
complex and its configuration space is of very high dimension.
But there is in principle no objection to treating this entire
system from the standpoint of quantum mechanics. Here too the
theory determines the probability of each configuration of all
its co-ordinates for every time instant. If one considers all
configurations of the coordinates, for a time large compared with
the average decay time of the radioactive atom, there will be
(at most) one such registration-mark on the paper strip.
To each coordinate configuration corresponds a definite position
of the mark on the paper strip. But, inasmuch as the theory yields
only the relative probability of the thinkable co-ordinate-configurations,
it also offers only relative probabilities for the positions of
the mark on the paper strip, but no definite location for this
mark.
In this consideration the location of the mark on the strip plays
the role played in the original consideration by the time of the
disintegration. The reason for the introduction of the system
supplemented by the registration-mechanism lies in the following.
The location of the mark on the registration-strip is a fact which
belongs entirely within the sphere of macroscopic concepts, in
contradistinction to the instant of disintegration of a single
atom. If we attempt [to work with] the interpretation that the
quantum-theoretical description is to be understood as a complete
description of the individual system, we are forced to the interpretation
that the location of the mark on the strip is nothing which belongs
to the system per se, but that the existence of that location
is essentially dependent upon the carrying out of an observation
made on the registration-strip. Such an interpretation is certainly
by no means absurd from a purely logical standpoint, yet there
is hardly likely to be anyone who would be inclined to consider
it seriously. For, in the macroscopic sphere it simply is considered
certain that one must adhere to the program of a realistic description
in space and time; whereas in the sphere of microscopic situations
one is more readily inclined to give up, or at least to modify,
this program.
This discussion was only to bring out the following. One arrives
at very implausible theoretical conceptions, if one attempts to
maintain the thesis that the statistical quantum theory is in
principle capable of producing a complete description of an individual
physical system. On the other hand, those difficulties of theoretical
interpretation disappear, if one views the quantum-mechanical
description as the description of ensembles of systems.
I reached this conclusion as the result of quite different types
of considerations. I am convinced that everyone who will take
the trouble to carry through such reflections conscientiously
will find himself finally driven to this interpretation of quantum-theoretical
description (the Psi-function is to be understood as the description
not of a single system but of an ensemble of systems).
Roughly stated the conclusion is this: Within the framework of
statistical quantum theory there is no such thing as a complete
description of the individual system. More cautiously it might
be put as follows: The attempt to conceive the quantum-theoretical
description as the complete description of the individual systems
leads to unnatural theoretical interpretations, which become immediately
unnecessary if one accepts the interpretation that the description
refers to ensembles of systems and not to individual systems.
In that case the whole "egg-walking" performed in order
to avoid the "physically real" becomes superfluous.
There exists, however, a simple psychological reason for the fact
that this most nearly obvious interpretation is being shunned.
For if the statistical quantum theory does not pretend to describe
the individual system (and its development in time) completely,
it appears unavoidable to look elsewhere for a complete description
of the individual system; in doing so it would be clear from the
very beginning that the elements of such a description are not
contained within the conceptual scheme of the statistical quantum
theory. With this one would admit that, in principle, this scheme
could not serve as the basis of theoretical physics. Assuming
the success of efforts to accomplish a complete physical description,
the statistical quantum theory would, within the framework of
future physics, take an approximately analogous position to the
statistical mechanics within the framework of classical mechanics.
I am rather firmly convinced that the development of theoretical
physics will be of this type; but the path will be lengthy and
difficult.
I now imagine a quantum theoretician who may even admit that the
quantum-theoretical description refers to ensembles of systems
and not to individual systems, but who, nevertheless, clings to
the idea that the type of description of the statistical quantum
theory will, in its essential features, be retained in the future.
He may argue as follows: True, I admit that the quantum-theoretical
description is an incomplete description of the individual system.
I even admit that a complete theoretical description is, in principle,
thinkable. But I consider it proven that the search for such a
complete description would be aimless. For the lawfulness of nature
is thus constituted that the laws can be completely and suitably
formulated within the framework of our incomplete description.
To this I can only reply as follows: Your point of view - taken
as theoretical possibility - is incontestable. For me, however,
the expectation that the adequate formulation of the universal
laws involves the use of all conceptual elements which
are necessary for a complete description, is more natural. It
is furthermore not at all surprising that, by using an incomplete
description, (in the main) only statistical statements can be
obtained out of such description. If it should be possible to
move forward to a complete description, it is likely that the
laws would represent relations among all the conceptual elements
of this description which, per se, have nothing to do with
statistics.
A few more remarks of a general nature concerning concepts and
[also] concerning the insinuation that a concept - for example
that of the real - is something metaphysical (and therefore to
be rejected). A basic conceptual distinction, which is a necessary
prerequisite of scientific and pre-scientific thinking, is the
distinction between "sense-impressions" (and the recollection
of such) on the one hand and mere ideas on the other. There is
no such thing as a conceptual definition of this distinction (aside
from, circular definitions, i.e., of such as make a hidden use
of the object to be defined). Nor can it be maintained that at
the base of this distinction there is a type of evidence, such
as underlies, for example, the distinction between red and blue.
Yet, one needs this distinction in order to be able to overcome
solipsism. Solution: we shall make use of this distinction unconcerned
with the reproach that, in doing so, we are guilty of the metaphysical
"original sin." We regard the distinction as a category
which we use in order that we might the better find our way in
the world of immediate sensations. The "sense" and the
justification of this distinction lies simply in this achievement.
But this is only a first step. We represent the sense-impressions
as conditioned by an "objective" and by a "subjective"
factor. For this conceptual distinction there also is no logical-philosophical
justification. But if we reject it, we cannot escape solipsism.
It is also the presupposition of every kind of physical thinking.
Here too, the only justification lies in its usefulness. We are
here concerned with "categories" or schemes of thought,
the selection of which is, in principle, entirely open to us and
whose qualification can only be judged by the degree to which
its use contributes to making the totality of the contents of
consciousness "intelligible." The above mentioned "objective
factor" is the totality of such concepts and conceptual relations
as are thought of as independent of experience, viz., of perceptions.
So long as we move within the thus programmatically fixed sphere
of thought we are thinking physically. Insofar as physical thinking
justifies itself, in the more than once indicated sense, by its
ability to grasp experiences intellectually, we regard it as "knowledge
of the real."
After what has been said, the "real" in physics is to
be taken as a type of program, to which we are, however, not forced
to cling a priori. No one is likely to be inclined to attempt
to give up this program within the realm of the "macroscopic"
(location of the mark on the paper strip "real"). But
the "macroscopic" and the "microscopic" are
so inter-related that it appears impracticable to give up this
program in the "microscopic" alone. Nor can I see any
occasion anywhere within the observable facts of the quantum-field
for doing so, unless, indeed, one clings a priori to the
thesis that the description of nature by the statistical scheme
of quantum-mechanics is final.
The theoretical attitude here advocated is distinct from that
of Kant only by the fact that we do not conceive of the "categories"
as unalterable (conditioned by the nature of the understanding)
but as (in the logical sense) free conventions. They appear to
be a priori only insofar as thinking without the positing
of categories and of concepts in general would be as impossible
as is breathing in a vacuum.
From these meagre remarks one will see that to me it must seem
a mistake to permit theoretical description to be directly dependent
upon acts of empirical assertions, as it seems to me to be intended
[for example] in Bohr's principle of complementarity, the sharp
formulation of which, moreover, I have been unable to achieve
despite much effort which I have expended on it. From my point
of view [such] statements or measurements can occur only as special
instances, viz., parts, of physical description, to which I cannot
ascribe any exceptional position above the rest.
The above mentioned essays by Bohr and Pauli contain a historical
appreciation of my efforts in the area of physical statistics
and quanta and, in addition, an accusation which is brought forward
in the friendliest of fashion. In briefest formulation this latter
runs as follows: "Rigid adherence to classical theory."
This accusation demands either a defence or the confession of
guilt. The one or the other is, however, being rendered much more
difficult because it is by no means immediately clear what is
meant by "classical theory." Newton's theory deserves
the name of a classical theory. It has nevertheless been abandoned
since Maxwell and Hertz have shown that the idea of forces at
a distance has to be relinquished and that one cannot manage without
the idea of continuous "fields." The opinion that continuous
fields are to be viewed as the only acceptable basic concepts,
which must also be assumed to underlie the theory of the material
particles, soon won out. Now this conception became, so to speak,
"classical;" but a proper, and in principle complete,
theory has not grown out of it. Maxwell's theory of the
electric field remained a torso, because it was unable to set
up laws for the behaviour of electric density, without which there
can, of course, be no such thing as an electro-magnetic field.
Analogously the general theory of relativity furnished then a
field theory of gravitation, but no theory of the field-creating
masses. (These remarks presuppose it as self-evident that a field-theory
may not contain any singularities, i.e., any positions or parts
in space in which the field laws are not valid.)
Consequently there is, strictly speaking, today no such thing
as a classical field-theory; one can, therefore, also not rigidly
adhere to it. Nevertheless, field-theory does exist as a program:
"Continuous functions in the four-dimensional [continuum]
as basic concepts of the theory." Rigid adherence to this
program can rightfully be asserted of me. The deeper ground for
this lies in the following: The theory of gravitation showed me
that the non-linearity of these equations results in the fact
that this theory yields interactions among structures (localised
things) at all. But the theoretical search for non-linear equations
is hopeless (because of too great variety of possibilities), if
one does not use the general principle of relativity (invariance
under general continuous co-ordinate-transformations). In the
meantime, however, it does not seem possible to formulate this
principle, if one seeks to deviate from the above program. Herein
lies a coercion which I cannot evade. This for my justification.
Nevertheless I am forced to weaken this justification by a confession.
If one disregards quantum structure, one can justify the introduction
of the gik "operationally" by pointing to the fact that
one can hardly doubt the physical reality of the elementary light
cone which belongs to a point. In doing so one implicitly makes
use of the existence of an arbitrarily sharp optical signal. Such
a signal, however, as regards the quantum facts, involves infinitely
high frequencies and energies, and therefore a complete destruction
of the field to be determined. That kind of a physical justification
for the introduction of the gik falls by the wayside, unless one
limits himself to the "macroscopic." The application
of the formal basis of the general theory of relativity to the
"microscopic" can, therefore, be based only upon the
fact that that tensor is the formally simplest covariant structure
which can come under consideration. Such argumentation, however,
carries no weight with anyone who doubts that we have to adhere
to the continuum at all. All honour to his doubt - but where else
is there a passable road?
Now I come to the theme of the relation of the theory of relativity
to philosophy. Here it is Reichenbach's piece of work which, by
the precision of deductions and by the sharpness of his assertions,
irresistibly invites a brief commentary. Robertson's lucid discussion
also is interesting mainly from the standpoint of general epistemology,
although it limits itself to the narrower theme of "the theory
of relativity and geometry." To the question: Do you consider
true what Reichenbach has here asserted, I can answer only with
Pilate's famous question: "What is truth?"
Let us first take a good look at the question: Is a geometry -
looked at from the physical point of view - verifiable (viz.,
falsifiable) or not? Reichenbach, together with Helmholtz, says:
Yes, provided that the empirically given solid body realises the
concept of "distance." Poincare says no and consequently
is condemned by Reichenbach. Now the following short conversation
takes place:
Poincare: The empirically given bodies are not rigid,
and consequently can not be used for the embodiment of geometric
intervals. Therefore, the theorems of geometry are not verifiable.
Reichenbach: I admit that there are no bodies which
can be immediately adduced for the "real definition"
of the interval. Nevertheless, this real definition can be achieved
by taking the thermal volume-dependence, elasticity, electro-
and magnetostriction, etc., into consideration. That this is really
[and] without contradiction possible, classical physics has surely
demonstrated.
Poincare: In gaining the real definition improved
by yourself you have made use of physical laws, the formulation
of which presupposes (in this case) Euclidean geometry. The verification,
of which you have spoken, refers, therefore, not merely to geometry
but to the entire system of physical laws which constitute its
foundation. An examination of geometry by itself is consequently
not thinkable. - Why should it consequently not be entirely up
to me to choose geometry according to my own convenience (i.e.,
Euclidean) and to fit the remaining (in the usual sense "physical")
laws to this choice in such manner that there can arise no contradiction
of the whole with experience?
(The conversation cannot be continued in this fashion because
the respect of the [present] writer for Poincare's superiority
as thinker and author does not permit it; in what follows therefore,
an anonymous non-positivist is substituted for Poincare. - )
Reichenbach: There is something quite attractive
in this conception. But, on the other hand, it is noteworthy that
the adherence to the objective meaning of length and to the interpretation
of the differences of co-ordinates as distances (in pre-relativistic
physics) has not led to complications. Should we not, on the basis
of this astounding fact, be justified in operating further at
least tentatively with the concept of the measurable length, as
if there were such things as rigid measuring-rods. In any case
it would have been impossible for Einstein de facto (even if not
theoretically) to set up the theory of general relativity, if
he had not adhered to the objective meaning of length.
Against Poincare's suggestion it is to be pointed out that what
really matters is not merely the greatest possible simplicity
of the geometry alone, but rather the greatest possible simplicity
of all of physics (inclusive of geometry). This is what is, in
the first instance, involved in the fact that today we must decline
as unsuitable the suggestion to adhere to Euclidean geometry.
Non-Positivist: If, under the stated circumstances,
you hold distance to be a legitimate concept, how then is it with
your basic principle (meaning = verifiability) ? Do you not have
to reach the point where you must deny the meaning of geometrical
concepts and theorems and to acknowledge meaning only within the
completely developed theory of relativity (which, however, does
not yet exist at all as a finished product)? Do you not have to
admit that, in your sense of the word, no "meaning"
can be attributed to the individual concepts and assertions of
a physical theory at all, and to the entire system only insofar
as it makes what is given in experience "intelligible?"
Why do the individual concepts which occur in a theory require
any specific Justification anyway, if they are only indispensable
within the framework of the logical structure of the theory, and
the theory only in its entirety validates itself?
It seems to me, moreover, that you have not at all done justice
to the really significant philosophical achievement of Kant. From
Hume Kant had learned that there are concepts (as, for example,
that of causal connection), which play a dominating role in our
thinking, and which, nevertheless, can not be deduced by means
of a logical process from the empirically given (a fact which
several empiricists recognise, it is true, but seem always again
to forget). What justifies the use of such concepts? Suppose he
had replied in this sense: Thinking is necessary in order to understand
the empirically given, and concepts and "categories"
are necessary as indispensable elements of thinking. If he
had remained satisfied with this type of an answer, he would have
avoided scepticism and you would not have been able to find fault
with him. He, however, was misled by the erroneous opinion, difficult
to avoid in his time - that Euclidean geometry is necessary to
thinking and offers assured (i.e., not dependent upon sensory
experience) knowledge concerning the objects of "external"
perception. From this easily understandable error he concluded
the existence of synthetic judgments a priori, which are
produced by the reason alone, and which, consequently, can lay
claim to absolute validity. I think your censure is directed less
against Kant himself than against those who today still adhere
to the errors of "synthetic judgments a priori."
I can hardly think of anything more stimulating as the basis for
discussion in an epistemological seminar than this brief essay
by Reichenbach (best taken together with Robertson's essay).
What has been discussed thus far is closely related to Bridgman's
essay, so that it will be possible for me to express myself quite
briefly without having to harbour too much fear that I shall be
misunderstood. In order to be able to consider a logical system
as physical theory it is not necessary to demand that all of its
assertions can be independently interpreted and "tested"
"operationally;" de facto this has never yet
been achieved by any theory and can not at all be achieved. In
order to be able to consider a theory as a physical theory
it is only necessary that it implies empirically testable assertions
in general.
This formulation is insofar entirely unprecise as "testability"
is a quality which refers not merely to the assertion itself but
also to the co-ordination of concepts, contained in it, with experience.
But it is probably hardly necessary for me to enter upon a discussion
of this ticklish problem, inasmuch as it is not likely that there
exist any essential differences of opinion at this point. -
Margenau;. This essay contains several original
specific remarks, which I must consider separately:
To his Sec. I: "Einstein's position . . . contains features
of rationalism and extreme empiricism...." This remark is
entirely correct. From whence comes this fluctuation? A logical
conceptual system is physics insofar as its concepts and assertions
are necessarily brought into relationship with the world of experiences.
Whoever desires to set up such a system will find a dangerous
obstacle in arbitrary choice (embarras de richesse). This
is why he seeks to connect his concepts as directly and necessarily
as possible with the world of experience. In this case his attitude
is empirical. This path is often fruitful, but it is always open
to doubt, because the specific concept and the individual assertion
can, after all, assert something confronted by the empirically
given only in connection with the entire system. He then recognises
that there exists no logical path from the empirically given to
that conceptual world. His attitude becomes then more nearly rationalistic,
because he recognises the logical independence of the system.
The danger in this attitude lies in the fact that in the search
for the system one can lose every contact with the world of experience.
A wavering between these extremes appears to me unavoidable.
To his Sec. 2: I did not grow up in the Kantian tradition, but
came to understand the truly valuable which is to be found in
his doctrine, alongside of errors which today are quite obvious,
only quite late. It is contained in the sentence: "The real
is not given to us, but put to us (aufgegeben) (by way
of a riddle)." This obviously means: There is such a thing
as a conceptual construction for the grasping of the inter-personal,
the authority of which lies purely in its validation. This conceptual
construction refers precisely to the "real" (by definition),
and every further question concerning the "nature of the
real" appears empty.
To his Sec. 4: This discussion has not convinced me at all. For
it is clear per se that every magnitude and every assertion
of a theory lays claim to "objective meaning" (within
the framework of the theory). A problem arises only when we ascribe
group-characteristics to a theory, i.e., if we assume or postulate
that the same physical situation admits of several ways of description,
each of which is to be viewed as equally justified. For in this
case we obviously cannot ascribe complete objective meaning (for
example the x-component of the velocity of a particle or its x-coordinates)
to the individual (not eliminable) magnitudes. In this case, which
has always existed in physics, we have to limit ourselves to ascribing
objective meaning to the general laws of the theory, i.e., we
have to demand that these laws are valid for every description
of the system which is recognised as justified by the group. It
is, therefore, not true that "objectivity" presupposes
a group-characteristic, but that the group-characteristic forces
a refinement of the concept of objectivity. The positing of group
characteristics is heuristically so important for theory, because
this characteristic always considerably limits the variety of
the mathematically meaningful laws.
Now there follows a claim that the group-characteristics determine
that the laws must have the form of differential equations; I
can not at all see this. Then Margenau insists that the laws expressed
by way of the differential equations (especially the partial ones)
are "least specific." Upon what does he base this contention?
If they could be proved to be correct, it is true that the attempt
to ground physics upon differential equations would then turn
out to be hopeless. We are, however, far from being able to judge
whether differential laws of the type to be considered have any
solutions at all which are everywhere singularity-free; and, if
so, whether there are too many such solutions.
And now just a remark concerning the discussions about the Einstein-Podolski-Rosen
Paradox. I do not think that Margenau's defence of the "orthodox"
("orthodox" refers to the thesis that the t-function
characterises the individual system exhaustively) quantum
position hits the essential [aspects]. Of the "orthodox"
quantum theoreticians whose position I know, Niels Bohr's seems
to me to come nearest to doing justice to the problem. Translated
into my own way of putting it, he argues as follows:
If the partial systems A and B form a total system which is described
by its Psi-function Psi/(AB), there is no reason why any
mutually independent existence (state of reality) should be ascribed
to the partial systems A and B viewed separately,
not even if the partial systems are spatially separated
from each other at the particular time under consideration.
The assertion that, in this latter case, the real situation of
B could not be (directly) influenced by any measurement
taken on A is, therefore, within the framework of quantum
theory, unfounded and (as the paradox shows) unacceptable.
By this way of looking at the matter it becomes evident that the
paradox forces us to relinquish one of the following two assertions:
(1) the description by means of the Psi-function is complete
(2) the real states of spatially separated objects are independent
of each other.
On the other hand, it is possible to adhere to (2), if one regards
the Psi-function as the description of a (statistical) ensemble
of systems (and therefore relinquishes (1) ) . However, this
view blasts the framework of the "orthodox quantum theory."
One more remark to Margenau's Sec. 7. In the characterisation
of quantum mechanics the brief little sentence will be found:
"on the classical level it corresponds to ordinary dynamics."
This is entirely correct - cum grano salis; and it is precisely
this granum salis which is significant for the question of interpretation.
If our concern is with macroscopic masses (billiard balls or stars),
we are operating with very short de Broglie-waves, which are determinative
for the behaviour of the center of gravity of such masses. This
is the reason why it is possible to arrange the quantum-theoretical
description for a reasonable time in such a manner that for the
macroscopic way of viewing things, it becomes sufficiently precise
in position as well as in momentum. It is true also that this
sharpness remains for a long time and that the quasi-points thus
represented behave just like the mass-points of classical mechanics.
However, the theory shows also that, after a sufficiently long
time, the point-like character of the Psi-function is completely
lost to the center of gravity-co-ordinates, so that one can no
longer speak of any quasi-localisation of the centers of gravity.
The picture then becomes, for example in the case of a single
macro-mass-point, quite similar to that involved in a single free
electron.
If now, in accordance with the orthodox position, I view the Psi-function
as the complete description of a real matter of fact for the individual
case, I cannot but consider the essentially unlimited lack of
sharpness of the position of the (macroscopic) body as real.
On the other hand, however, we know that, by illuminating the
body by means of a lantern at rest against the system of co-ordinates,
we get a (macroscopically judged) sharp determination of position.
In order to comprehend this I must assume that that sharply defined
position is determined not merely by the real situation of the
observed body, but also by the act of illumination. This is again
a paradox (similar to the mark on the paper strip in the above
mentioned example). The spook disappears only if one relinquishes
the orthodox standpoint, according to which the Psi-function is
accepted as a complete description of the single system.
It may appear as if all such considerations were just superfluous
learned hairsplitting, which have nothing to do with physics proper.
However, it depends precisely upon such considerations in which
direction one believes one must look for the future conceptual
basis of physics.
I close these expositions, which have grown rather lengthy, concerning
the interpretation of quantum theory with the reproduction of
a brief conversation which I had with an important theoretical
physicist. He: "I am inclined to believe in telepathy."
I: "This has probably more to do with physics than with psychology."
He: "Yes."
The essays by Lenzen and Northrop both aim to treat my occasional
utterances of epistemological content systematically. From those
utterances Lenzen constructs a synoptic total picture, in which
what is missing in the utterances is carefully and with delicacy
of feeling supplied. Everything said therein appears to me convincing
and correct. Northrop uses these utterances as point of departure
for a comparative critique of the major epistemological systems.
I see in this critique a masterpiece of unbiased thinking and
concise discussion, which nowhere permits itself to be diverted
from the essential.
The reciprocal relationship of epistemology and science is of
noteworthy kind. They are dependent upon each other. Epistemology
without contact with science becomes an empty scheme. Science
without epistemology is - insofar as it is thinkable at all -
primitive and muddled. However, no sooner has the epistemologist,
who is seeking a clear system, fought his way through to such
a system, than he is inclined to interpret the thought-content
of science in the sense of his system and to reject whatever does
not fit into his system. The scientist, however, cannot afford
to carry his striving for epistemological systematic that far.
He accepts gratefully the epistemological conceptual analysis;
but the external conditions, which are set for him by the facts
of experience, do not permit him to let himself be too much restricted
in the construction of his conceptual world by the adherence to
an epistemological system. He therefore must appear to the systematic
epistemologist as a type of unscrupulous opportunist: he appears
as realist insofar as he seeks to describe a world
independent of the acts of perception; as idealist
insofar as he looks upon the concepts and theories as the free
inventions of the human spirit (not logically derivable from what
is empirically given); as positivist insofar as
he considers his concepts and theories justified only to the extent
to which they furnish a logical representation of relations among
sensory experiences. He may even appear as Platonist
or Pythagorean insofar as he considers the viewpoint
of logical simplicity as an indispensable and effective tool of
his research.
All of this is splendidly elucidated in Lenzen's and Northrop's
essays.
And now a few remarks concerning the essays by E. A. Milne, G.
Lemaitre, and L. Infeld as concerns the cosmological problem:
Concerning Milne's ingenious reflections I can only say that I
find their theoretical basis too narrow. From my point of view
one cannot arrive, by way of theory, at any at least somewhat
reliable results in the field of cosmology, if one makes no use
of the principle of general relativity.
As concerns Lemaître's arguments in favour of the so-called
"cosmological constant" in the equations of gravitation,
I must admit that these arguments do not appear to me as sufficiently
convincing in view of the present state of our knowledge.
The introduction of such a constant implies a considerable renunciation
of the logical simplicity of theory, a renunciation which appeared
to me unavoidable only so long as one had no reason to doubt the
essentially static nature of space. After Hubble's discovery of
the "expansion" of the stellar system, and since Friedmann's
discovery that the unsupplemented equations involve the possibility
of the existence of an average (positive) density of matter in
an expanding universe, the introduction of such a constant appears
to me, from the theoretical standpoint, at present unjustified.
The situation becomes complicated by the fact that the entire
duration of the expansion of space to the present, based on the
equations in their simplest form, turns out smaller than appears
credible in view of the reliably known age of terrestrial minerals.
But the introduction of the "cosmological constant"
offers absolutely no natural escape from the difficulty. This
latter difficulty is given by way of the numerical value of Hubble's
expansion-constant and the age-measurement of minerals, completely
independent of any cosmological theory, provided that one interprets
the Hubble-effect as Doppler effect.
Everything finally depends upon the question: Can a spectral line
be considered as a measure of a "proper time" (Eigen-Zeit) ds
(ds2 = gikdxidxk), (if one takes into consideration regions of
cosmic dimensions)? Is there such a thing as a natural object
which incorporates the "natural-measuring-stick" independently
of its position in four-dimensional space? The affirmation of
this question made the invention of the general theory of relativity
psychologically possible; however this supposition is logically
not necessary. For the construction of the present theory of relativity
the following is essential:
(1) Physical things are described by continuous functions, field-variables
of four co-ordinates. As long as the topological connection is
preserved, these latter can be freely chosen.
(2) The field-variables are tensor-components; among the tensors
is a symmetrical tensor gik for the description of the gravitational
field.
(3) There are physical objects, which (in the macroscopic field)
measure the invariant ds.
If (1) and (2) are accepted, (3) is plausible, but not necessary.
The construction of mathematical theory rests exclusively upon
(1) and (2).
A complete theory of physics as a totality, in accordance with
(1) and (2) does not yet exist. If it did exist, there would be
no room for the supposition (3). For the objects used as tools
for measurement do not lead an independent existence alongside
of the objects implicated by the field-equations. - - It is not
necessary that one should permit one's cosmological considerations
to be restrained by such a sceptical attitude; but neither should
one close one's mind towards them from the very beginning.
These reflections bring me to Karl Menger's essay. For the quantum-facts
suggest the suspicion that doubt may also be raised concerning
the ultimate usefulness of the program characterised in (1) and
(2). There exists the possibility of doubting only (2) and, in
doing so, to question the possibility of being able adequately
to formulate the laws by means of differential equations, without
dropping (1). The more radical effort of surrendering (1) with
(2) appears to me - and I believe to Dr. Menger also - to lie
more closely at hand. So long as no one has new concepts, which
appear to have sufficient constructive power, mere doubt remains;
this is, unfortunately, my own situation. Adhering to the continuum
originates with me not in a prejudice, but arises out of the fact
that I have been unable to think up anything organic to take its
place. How is one to conserve four-dimensionality in essence (or
in near approximation) and [at the same time] surrender the continuum?
L. Infeld's essay is an independently understandable, excellent
introduction into the so-called "cosmological problem"
of the theory of relativity, which critically examines all essential
points.
Max von Laue: An historical investigation of the development of
the conservation postulates, which, in my opinion, is of lasting
value. I think it would be worth while to make this essay easily
accessible to students by way of independent publication.
In spite of serious efforts I have not succeeded in quite understanding
H. Dingle's essay, not even as concerns its aim. Is the idea of
the special theory of relativity to be expanded in the sense that
new group-characteristics, which are not implied by the Lorentz-invariance,
are to be postulated? Are these postulates empirically founded
or only by way of a trial "posited"? Upon what does
the confidence in the existence of such group-characteristics
rest?
Kurt Gödel's essay constitutes, in my opinion, an important
contribution to the general theory of relativity, especially to
the analysis of the concept of time. The problem here involved
disturbed me already at the time of the building up of the general
theory of relativity, without my having succeeded in clarifying
it. Entirely aside from the relation of the theory of relativity
to idealistic philosophy or to any philosophical formulation of
questions, the problem presents itself as follows:
If P is a world-point, a "light-cone" (ds2= 0)
belongs to it. We draw a "time-like" world-line through
P and on this line observe the close world-points B and
A, separated by P. Does it make any sense to provide
the world-line with an arrow, and to assert that B is before
P, A after P? Is what remains of temporal
connection between world-points in the theory of relativity an
asymmetrical relation, or would one be just as much justified,
from the physical point of view, to indicate the arrow in the
opposite direction and to assert that A is before P,
B after P?
In the first instance the alternative is decided in the negative,
if we are justified in saying: If it is possible to send (to telegraph)
a signal (also passing by in the close proximity of P)
from B to A, but not from A to B,
then the one-sided (asymmetrical) character of time is secured,
i.e., there exists no free choice for the direction of the arrow.
What is essential in this is the fact that the sending of a signal
is, in the sense of thermodynamics, an irreversible process, a
process which is connected with the growth of entropy (whereas,
according to our present knowledge, all elementary processes
are reversible).
If, therefore, B and A are two, sufficiently neighbouring,
world-points, which can be connected by a time-like line, then
the assertion: "B is before A," makes
physical sense. But does this assertion still make sense, if the
points, which are connectable by the time-like line, are arbitrarily
far separated from each other? Certainly not, if there exist point-series
connectable by time-like lines in such a way that each point precedes
temporally the preceding one, and if the series is closed in
itself. In that case the distinction "earlier-later"
is abandoned for world-points which lie far apart in a cosmological
sense, and those paradoxes, regarding the direction of
the causal connection, arise, of which Mr. Gödel has spoken.
Such cosmological solutions of the gravitation-equations (with
not vanishing A-constant) have been found by Mr. Gödel. It
will be interesting to weigh whether these are not to be excluded
on physical grounds.
I have the distressing feeling that I have expressed myself, in
this reply, not merely somewhat longwindedly but also rather sharply.
This observation may serve as my excuse: one can really quarrel
only with his brothers or close friends; others are too alien
[for that].
P.S. The preceding remarks refer to essays which were in my hands
at the end of January 1949. Inasmuch as the volume was to have
appeared in March, it was high time to write down these reflections.
After they had been concluded I learned that the publication of
the volume would experience a further delay and that some additional
important essays had come in. I decided, nevertheless, not to
expand my remarks further, which had already become too long,
and to desist from taking any position with reference to those
essays which came into my hands after the conclusion of my remarks.
Further Reading:
Biography |
Einstein Archive |
Bridgman |
Bohr
Philosophy Archive @ marxists.org
|
./articles/Poincaré-Henri/https:..www.marxists.org.reference.subject.philosophy.works.us.peirce | <body>
<img src="../../../../../glossary/people/p/pics/peirce.jpg" align="LEFT" hspace="12" vspace="2" alt="peirce" border="0">
<p class="title">Charles Peirce (1878)</p>
<h3><em>How to Make our Ideas Clear</em></h3>
<hr class="end">
<p class="information">
<span class="info">Source</span>: <em>How to make our Ideas Clear</em> (1878), from Writings of Charles S Peirce, Volume 3, Indiana University Press. 3 of 4 parts, excluding Part I reproduced here.</p>
<p class="information">See also <a href="../us/peirce1.htm">What Is a Sign?</a>, <a href="../us/peirce2.htm">Three Trichotomies of Signs</a>, <a href="../us/peirce3.htm">On Hegel</a>.</p>
<hr class="end">
<h3>II</h3>
<p class="fst">
The principles set forth in the first of these papers lead, at
once, to a method of reaching a clearness of thought of a far
higher grade than the "distinctness" of the logicians.
We have there found that the action of thought is excited by the
irritation of doubt, and ceases when belief is attained; so that
the production of belief is the sole function of thought. All
these words, however, are too strong for my purpose. It is as
if I had described the phenomena as they appear under a mental
microscope. Doubt and Belief, as the words are commonly employed,
relate to religious or other grave discussions. But here I use
them to designate the starting of any question, no matter how
small or how great, and the resolution of it. If, for instance,
in a horse-car, I pull out my purse and find a five-cent nickel
and five coppers, I decide, while my hand is going to the purse,
in which way I will pay my fare. To call such a question Doubt,
and my decision Belief, is certainly to use words very disproportionate
to the occasion. To speak of such a doubt as causing an irritation
which needs to be appeased, suggests a temper which is uncomfortable
to the verge of insanity. Yet, looking at the matter minutely,
it must be admitted that, if there is the least hesitation as
to whether I shall pay the five coppers or the nickel (as there
will be sure to be, unless I act from some previously contracted
habit in the matter), though irritation is too strong a word,
yet I am excited to such small mental activity as may be necessary
to deciding how I shall act. Most frequently doubts arise from
some indecision, however momentary, in our action. Sometimes it
is not so. I have, for example, to wait in a railway-station,
and to pass the time I read the advertisements on the walls, I
compare the advantages of different trains and different routes
which I never expect to take, merely fancying myself to be in
a state of hesitancy, because I am bored with having nothing to
trouble me. Feigned hesitancy, whether feigned for mere amusement
or with a lofty purpose, plays a great part in the production
of scientific inquiry. However the doubt may originate, it stimulates
the mind to an activity which may be slight or energetic, calm
or turbulent. Images pass rapidly through consciousness, one incessantly
melting into another, until at last, when all is over - it may be
in a fraction of a second, in an hour, or after long years - we
find ourselves decided as to how we should act under such circumstances
as those which occasioned our hesitation. In other words, we have
attained belief.</p>
<p>
In this process we observe two sorts of elements of consciousness,
the distinction between which may best be made clear by means
of an illustration. In a piece of music there are the separate
notes, and there is the air. A single tone may be prolonged for
an hour or a day, and it exists as perfectly in each second of
that time as in the whole taken together; so that, as long as
it is sounding, it might be present to a sense from which everything
in the past was as completely absent as the future itself. But
it is different with the air, the performance of which occupies
a certain time, during the portions of which only portions of
it are played. It consists in an orderliness in the succession
of sounds which strike the ear at different times; and to perceive
it there must be some continuity of consciousness which makes
the events of a lapse of time present to us. We certainly only
perceive the air by hearing the separate notes; yet we cannot
be said to directly hear it, for we hear only what is present
at the instant, and an orderliness of succession cannot exist
in an instant. These two sorts of objects, what we are immediately
conscious of and what we are <em>mediately</em> conscious of, are
found in all consciousness. Some elements (the sensations) are
completely present at every instant so long as they last, while
others (like thought) are actions having beginning, middle, and
end, and consist in a congruence in the succession of sensations
which flow through the mind. They cannot be immediately present
to us, but must cover some portion of the past or future. Thought
is a thread of melody running through the succession of our sensations.</p>
<p>
We may add that just as a piece of music may be written in parts,
each part having its own air, so various systems of relationship
of succession subsist together between the same sensations. These
different systems are distinguished by having different motives,
ideas, or functions. Thought is only one such system, for its
sole motive, idea, and function, is to produce belief, and whatever
does not concern that purpose belongs to some other system of
relations. The action of thinking may incidentally have other
results; it may serve to amuse us, for example, and among <em>dilettanti</em>
it is not rare to find those who have so perverted thought to
the purposes of pleasure that it seems to vex them to think that
the questions upon which they delight to exercise it may ever
get finally settled; and a positive discovery which takes a favorite
subject out of the arena of literary debate is met with ill-concealed
dislike. This disposition is the very debauchery of thought. But
the soul and meaning of thought, abstracted from the other elements
which accompany it, though it may be voluntarily thwarted, can
never be made to direct itself toward anything but the production
of belief. Thought in action has for its only possible motive
the attainment of thought at rest; and whatever does not refer
to belief is no part of the thought itself.</p>
<p>
And what, then, is belief? It is the demi-cadence which closes
a musical phrase in the symphony of our intellectual life. We
have seen that it has just three properties: First, it is something
that we are aware of; second, it appeases the irritation of doubt;
and, third, it involves the establishment in our nature of a rule
of action, or, say for short, a <em><strong>habit</strong></em>. As it appeases
the irritation of doubt, which is the motive for thinking, thought
relaxes, and comes to rest for a moment when belief is reached.
But, since belief is a rule for action, the application of which
involves further doubt and further thought, at the same time that
it is a stopping-place, it is also a new starting-place for thought.
That is why I have permitted myself to call it thought at rest,
although thought is essentially an action. The <em><strong>final</strong></em>
upshot of thinking is the exercise of volition, and of this thought
no longer forms a part; but belief is only a stadium of mental
action, an effect upon our nature due to thought, which will influence
future thinking. </p>
<p>
The essence of belief is the establishment of a habit, and different
beliefs are distinguished by the different modes of action to
which they give rise. If beliefs do not differ in this respect,
if they appease the same doubt by producing the same rule of action,
then no mere differences in the manner of consciousness of them
can make them different beliefs, any more than playing a tune
in different keys is playing different tunes. Imaginary distinctions
are often drawn between beliefs which differ only in their mode
of expression; - the wrangling which ensues is real enough, however.
To believe that any objects are arranged as in Fig. 1, and to
believe that they are arranged in Fig. 2, are one and the same
belief; yet it is conceivable that a man should assert one proposition
and deny the other. Such false distinctions do as much harm as
the confusion of beliefs really different, and are among the pitfalls
of which we ought constantly to beware, especially when we are
upon metaphysical ground. One singular deception of this sort,
which often occurs, is to mistake the sensation produced by our
own unclearness of thought for a character of the object we are
thinking. Instead of perceiving that the obscurity is purely subjective,
we fancy that we contemplate a quality of the object which is
essentially mysterious; and if our conception be afterward presented
to us in a clear form we do not recognise it as the same, owing
to the absence of the feeling of unintelligibility. So long as
this deception lasts, it obviously puts an impassable barrier
in the way of perspicuous thinking; so that it equally interests
the opponents of rational thought to perpetuate it, and its adherents
to guard against it.</p>
<h1><img src="../../images/peirce1.gif" align="middle" hspace="3" vspace="3" alt="figs 1 and 2"></h1>
<p>
Another such deception is to mistake a mere difference in the
grammatical construction of two words for a distinction between
the ideas they express. In this pedantic age, when the general
mob of writers attend so much more to words than to things, this
error is common enough. When I just said that thought is an <em><strong>action</strong></em>,
and that it consists in a <em><strong>relation</strong></em>, although a person
performs an action but not a relation, which can only be the result
of an action, yet there was no inconsistency in what I said, but
only a grammatical vagueness.</p>
<p>
From all these sophisms we shall be perfectly safe so long as
we reflect that the whole function of thought is to produce habits
of action; and that whatever there is connected with a thought,
but irrelevant to its purpose, is an accretion to it, but no part
of it. If there be a unity among our sensations which has no reference
to how we shall act on a given occasion, as when we listen to
a piece of music, why we do not call that thinking. To develop
its meaning, we have, therefore, simply to determine what habits
it produces, for what a thing means is simply what habits it involves.
Now, the identity of a habit depends on how it might lead us to
act, not merely under such circumstances as are likely to arise,
but under such as might possibly occur, no matter how improbable
they may be. What the habit is depends on <em><strong>when</strong></em> and
<em><strong>how</strong></em> it causes us to act. As for the <em><strong>when</strong></em>,
every stimulus to action is derived from perception; as for the
<em><strong>how</strong></em>, every purpose of action is to produce some
sensible result. Thus, we come down to what is tangible and practical,
as the root of every real distinction of thought, no matter how
subtle it may be; and there is no distinction of meaning so fine
as to consist in anything but a possible difference of practice.</p>
<p>
To see what this principle leads to, consider in the light of
it such a doctrine as that of transubstantiation. The Protestant
churches generally hold that the elements of the sacrament are
flesh and blood only in a tropical sense; they nourish our souls
as meat and the juice of it would our bodies. But the Catholics
maintain that they are literally just that; although they possess
all the sensible qualities of wafer-cakes and diluted wine. But
we can have no conception of wine except what may enter into a
belief, either:</p>
<ol class="numbered">
<li>That this, that, or the other, is wine; or,</li>
<li>That wine possesses certain properties.</li>
</ol>
<p>
Such beliefs are nothing but self-notifications that we should,
upon occasion, act in regard to such things as we believe to be
wine according to the qualities which we believe wine to possess.
The occasion of such action would be some sensible perception,
the motive of it to produce some sensible result. Thus our action
has exclusive reference to what affects the senses, our habit
has the same bearing as our action, our belief the same as our
habit, our conception the same as our belief; and we can consequently
mean nothing by wine but what has certain effects, direct or indirect,
upon our senses; and to talk of something as having all the sensible
characters of wine, yet being in reality blood, is senseless jargon.
Now, it is not my object to pursue the theological question; and
having used it as a logical example I drop it, without caring
to anticipate the theologian's reply. I only desire to point out
how impossible it is that we should have an idea in our minds
which relates to anything but conceived sensible effects of things.
Our idea of anything <em><strong>is</strong></em> our idea of its sensible
effects; and if we fancy that we have any other we deceive ourselves,
and mistake a mere sensation accompanying the thought for a part
of the thought itself. It is absurd to say that thought has any
meaning unrelated to its only function. It is foolish for Catholics
and Protestants to fancy themselves in disagreement about the
elements of the sacrament, if they agree in regard to all their
sensible effects, here or hereafter.</p>
<p>
It appears, then, that the rule for attaining the third grade
of clearness of apprehension is as follows: Consider what effects,
which might conceivably have practical bearings, we conceive the
object of our conception to have. Then, our conception of these
effects is the whole of our conception of the object.</p>
<h3>III</h3>
<p class="fst">
Let us illustrate this rule by some examples; and, to begin with
the simplest one possible, let us ask what we mean by calling
a thing <em>hard</em>. Evidently that it will not be scratched by
many other substances. The whole conception of this quality, as
of every other, lies in its conceived effects. There is absolutely
no difference between a hard thing and a soft thing so long as
they are not brought to the test. Suppose, then, that a diamond
could be crystallised in the midst of a cushion of soft cotton,
and should remain there until it was finally burned up. Would
it be false to say that that diamond was soft? This seems a foolish
question, and would be so, in fact, except in the realm of logic.
There such questions are often of the greatest utility as serving
to bring logical principles into sharper relief than real discussions
ever could. In studying logic we must not put them aside with
hasty answers, but must consider them with attentive care, in
order to make out the principles involved. We may, in the present
case, modify our question, and ask what prevents us from saying
that all hard bodies remain perfectly soft until they are touched,
when their hardness increases with the pressure until they are
scratched. Reflection will show that the reply is this: there
would be no <em><strong>falsity</strong></em> in such modes of speech. They
would involve a modification of our present usage of speech with
regard to the words hard and soft, but not of their meanings.
For they represent no fact to be different from what it is; only
they involve arrangements of facts which would be exceedingly
maladroit. This leads us to remark that the question of what would
occur under circumstances which do not actually arise is not a
question of fact, but only of the most perspicuous arrangement
of them. For example, the question of free-will and fate in its
simplest form, stripped of verbiage, is something like this: I
have done something of which I am ashamed; could I, by an effort
of the will, have resisted the temptation, and done otherwise?
The philosophical reply is, that this is not a question of fact,
but only of the arrangement of facts. Arranging them so as to
exhibit what is particularly pertinent to my question - namely,
that I ought to blame myself for having done wrong - it is perfectly
true to say that, if I had willed to do otherwise than I did,
I should have done otherwise. On the other hand, arranging the
facts so as to exhibit another important consideration, it is
equally true that, when a temptation has once been allowed to
work, it will, if it has a certain force, produce its effect,
let me struggle how I may. There is no objection to a contradiction
in what would result from a false supposition. The <em>reductio
ad absurdum</em> consists in showing that contradictory results
would follow from a hypothesis which is consequently judged to
be false. Many questions are involved in the free-will discussion,
and I am far from desiring to say that both sides are equally
right. On the contrary, I am of opinion that one side denies important
facts, and that the other does not. But what I do say is, that
the above single question was the origin of the whole doubt; that,
had it not been for this question, the controversy would never
have arisen; and that this question is perfectly solved in the
manner which I have indicated.</p>
<p>
Let us next seek a clear idea of Weight. This is another very
easy case. To say that a body is heavy means simply that, in the
absence of opposing force, it will fall. This (neglecting certain
specifications of how it will fall, etc., which exist in the mind
of the physicist who uses the word) is evidently the whole conception
of weight. It is a fair question whether some particular facts
may not <em>account</em> for gravity; but what we mean by the force
itself is completely involved in its effects.</p>
<p>
This leads us to undertake an account of the idea of Force in
general. This is the great conception which, developed in the
early part of the seventeenth century from the rude idea of a
cause, and constantly improved upon since, has shown us how to
explain all the changes of motion which bodies experience, and
how to think about all physical phenomena; which has given birth
to modern science, and changed the face of the globe; and which,
aside from its more special uses, has played a principal part
in directing the course of modern thought, and in furthering modern
social development. It is, therefore, worth some pains to comprehend
it. According to our rule, we must begin by asking what is the
immediate use of thinking about force; and the answer is, that
we thus account for changes of motion. If bodies were left to
themselves, without the intervention of forces, every motion would
continue unchanged both in velocity and in direction. Furthermore,
change of motion never takes place abruptly; if its direction
is changed, it is always through a curve without angles; if its
velocity alters, it is by degrees. The gradual changes which are
constantly taking place are conceived by geometers to be compounded
together according to the rules of the parallelogram of forces.
If the reader does not already know what this is, he will find
it, I hope, to his advantage to endeavour to follow the following
explanation; but if mathematics are insupportable to him, pray
let him skip three paragraphs rather than that we should part
company here.</p>
<p>
A <em><strong>path</strong></em> is a line whose beginning and end are distinguished.
Two paths are considered to be equivalent, which, beginning at
the same point, lead to the same point. Thus the two paths, ABCDE
and AFGHE, are equivalent. Paths which do <em><strong>not</strong></em> begin
at the same point are considered to be equivalent, provided that,
on moving either of them without turning it, but keeping it always
parallel to its original position, when its beginning coincides
with that of the other path, the ends also coincide. Paths are
considered as geometrically added together, when one begins where
the other ends; thus the path AE is conceived to be a sum of AB,
BC, CD, and DE. In the parallelogram of Fig. 4 the diagonal AC
is the sum of AB and BC; or, since AD is geometrically equivalent
to BC, AC is the geometrical sum of AB and AD.</p>
<h1>
<img src="../../images/peirce2.gif" align="middle" hspace="2" vspace="2" alt="figs 3 and 4"></h1>
<p>
All this is purely conventional. It simply amounts to this: that
we choose to call paths having the relations I have described
equal or added. But, though it is a convention, it is a convention
with a good reason. The rule for geometrical addition may be applied
not only to paths, but to any other things which can be represented
by paths. Now, as a path is determined by the varying direction
and distance of the point which moves over it from the starting-point,
it follows that anything which from its beginning to its end is
determined by a varying direction and a varying magnitude is capable
of being represented by a line. Accordingly, <em><strong>velocities</strong></em>
may be represented by lines, for they have only directions and
rates. The same thing is true of <em><strong>accelerations</strong></em>,
or changes of velocities. This is evident enough in the case of
velocities; and it becomes evident for accelerations if we consider
that precisely what velocities are to positions - namely, states
of change of them - that accelerations are to velocities.</p>
<p>
The so-called "parallelogram of forces" is simply a
rule for compounding accelerations. The rule is, to represent
the accelerations by paths, and then to geometrically add the
paths. The geometers, however, not only use the "parallelogram
of forces" to compound different accelerations, but also
to resolve one acceleration into a sum of several. Let AB (Fig.
5) be the path which represents a certain acceleration - say, such
a change in the motion of a body that at the end of one second
the body will, under the influence of that change, be in a position
different from what it would have had if its motion had continued
unchanged such that a path equivalent to AB would lead from the
latter position to the former. This acceleration may be considered
as the sum of the accelerations represented by AC and CB. It may
also be considered as the sum of the very different accelerations
represented by AD and DB, where AD is almost the opposite of AC.
And it is clear that there is an immense variety of ways in which
AB might be resolved into the sum of two accelerations.</p>
<h1>
<img src="../../images/peirce3.gif" align="middle" vspace="2" hspace="2" alt="fig 5"></h1>
<p>
After this tedious explanation, which I hope, in view of the extraordinary
interest of the conception of force, may not have exhausted the
reader's patience, we are prepared at last to state the grand
fact which this conception embodies. This fact is that if the
actual changes of motion which the different particles of bodies
experience are each resolved in its appropriate way, each component
acceleration is precisely such as is prescribed by a certain law
of Nature, according to which bodies in the relative positions
which the bodies in question actually have at the moment, always
receive certain accelerations, which, being compounded by geometrical
addition, give the acceleration which the body actually experiences.</p>
<p>
This is the only fact which the idea of force represents, and
whoever will take the trouble clearly to apprehend what this fact
is, perfectly comprehends what force is. Whether we ought to say
that a force is an acceleration, or that it causes an acceleration,
is a mere question of propriety of language, which has no more
to do with our real meaning than the difference between the French
idiom "<em>Il fait froid</em>" and its English equivalent
"<em>It is cold</em>." Yet it is surprising to see how
this simple affair has muddled men's minds. In how many profound
treatises is not force spoken of as a "mysterious entity,"
which seems to be only a way of confessing that the author despairs
of ever getting a clear notion of what the word means! In a recent
admired work on "Analytic Mechanics" it is stated that
we understand precisely the effect of force, but what force itself
is we do not understand! This is simply a self-contradiction.
The idea which the word force excites in our minds has no other
function than to affect our actions, and these actions can have
no reference to force otherwise than through its effects. Consequently,
if we know what the effects of force are, we are acquainted with
every fact which is implied in saying that a force exists, and
there is nothing more to know. The truth is, there is some vague
notion afloat that a question may mean something which the mind
cannot conceive; and when some hair-splitting philosophers have
been confronted with the absurdity of such a view, they have invented
an empty distinction between positive and negative conceptions,
in the attempt to give their non-idea a form not obviously nonsensical.
The nullity of it is sufficiently plain from the considerations
given a few pages back; and, apart from those considerations,
the quibbling character of the distinction must have struck every
mind accustomed to real thinking.</p>
<h3>IV</h3>
<p class="fst">
Let us now approach the subject of logic, and consider a conception
which particularly concerns it, that of <em><strong>reality</strong></em>.
Taking clearness in the sense of familiarity, no idea could be
clearer than this. Every child uses it with perfect confidence,
never dreaming that he does not understand it. As for clearness
in its second grade, however, it would probably puzzle most men,
even among those of a reflective turn of mind, to give an abstract
definition of the real. Yet such a definition may perhaps be reached
by considering the points of difference between reality and its
opposite, fiction. A figment is a product of somebody's imagination;
it has such characters as his thought impresses upon it. That
whose characters are independent of how you or I think is an external
reality. There are, however, phenomena within our own minds, dependent
upon our thought, which are at the same time real in the sense
that we really think them. But though their characters depend
on how we think, they do not depend on what we think those characters
to be. Thus, a dream has a real existence as a mental phenomenon,
if somebody has really dreamt it; that he dreamt so and so, does
not depend on what anybody thinks was dreamt, but is completely
independent of all opinion on the subject. On the other hand,
considering, not the fact of dreaming, but the thing dreamt, it
retains its peculiarities by virtue of no other fact than that
it was dreamt to possess them. Thus we may define the real as
that whose characters are independent of what anybody may think
them to be.</p>
<p>
But, however satisfactory such a definition may be found, it would
be a great mistake to suppose that it makes the idea of reality
perfectly clear. Here, then, let us apply our rules. According
to them, reality, like every other quality, consists in the peculiar
sensible effects which things partaking of it produce. The only
effect which real things have is to cause belief, for all the
sensations which they excite emerge into consciousness in the
form of beliefs. The question therefore is, how is true belief
(or belief in the real) distinguished from false belief (or belief
in fiction). Now, as we have seen in the former paper, the ideas
of truth and falsehood, in their full development, appertain exclusively
to the scientific method of settling opinion. A person who arbitrarily
chooses the propositions which he will adopt can use the word
truth only to emphasise the expression of his determination to
hold on to his choice. Of course, the method of tenacity never
prevailed exclusively; reason is too natural to men for that.
But in the literature of the dark ages we find some fine examples
of it. When Scotus Erigena is commenting upon a poetical passage
in which hellebore is spoken of as having caused the death of
Socrates, he does not hesitate to inform the inquiring reader
that Helleborus and Socrates were two eminent Greek philosophers,
and that the latter having been overcome in argument by the former
took the matter to heart and died of it! What sort of an idea
of truth could a man have who could adopt and teach, without the
qualification of a perhaps, an opinion taken so entirely at random?
The real spirit of Socrates, who I hope would have been delighted
to have been "overcome in argument," because he would
have learned something by it, is in curious contrast with the
naive idea of the glossist, for whom discussion would seem to
have been simply a struggle. When philosophy began to awake from
its long slumber, and before theology completely dominated it,
the practice seems to have been for each professor to seize upon
any philosophical position he found unoccupied and which seemed
a strong one, to intrench himself in it, and to sally forth from
time to time to give battle to the others. Thus, even the scanty
records we possess of those disputes enable us to make out a dozen
or more opinions held by different teachers at one time concerning
the question of nominalism and realism. Read the opening part
of the "<em>Historia Calamitatum</em>" of Abelard, who
was certainly as philosophical as any of his contemporaries, and
see the spirit of combat which it breathes. For him, the truth
is simply his particular stronghold. When the method of authority
prevailed, the truth meant little more than the Catholic faith.
All the efforts of the scholastic doctors are directed toward
harmonising their faith in Aristotle and their faith in the Church,
and one may search their ponderous folios through without finding
an argument which goes any further. It is noticeable that where
different faiths flourish side by side, renegades are looked upon
with contempt even by the party whose belief they adopt; so completely
has the idea of loyalty replaced that of truth-seeking. Since
the time of Descartes, the defect in the conception of truth has
been less apparent. Still, it will sometimes strike a scientific
man that the philosophers have been less intent on finding out
what the facts are, than on inquiring what belief is most in harmony
with their system. It is hard to convince a follower of the <em>a
priori</em> method by adducing facts; but show him that an opinion
he is defending is inconsistent with what he has laid down elsewhere,
and he will be very apt to retract it. These minds do not seem
to believe that disputation is ever to cease; they seem to think
that the opinion which is natural for one man is not so for another,
and that belief will, consequently, never be settled. In contenting
themselves with fixing their own opinions by a method which would
lead another man to a different result, they betray their feeble
hold of the conception of what truth is.</p>
<p>
On the other hand, all the followers of science are fully persuaded
that the processes of investigation, if only pushed far enough,
will give one certain solution to every question to which they
can be applied. One man may investigate the velocity of light
by studying the transits of Venus and the aberration of the stars;
another by the oppositions of Mars and the eclipses of Jupiter's
satellites; a third by the method of Fizeau; a fourth by that
of Foucault; a fifth by the motions of the curves of Lissajous;
a sixth, a seventh, an eighth, and a ninth, may follow the different
methods of comparing the measures of statical and dynamical electricity.
They may at first obtain different results, but, as each perfects
his method and his processes, the results will move steadily together
toward a destined centre. So with all scientific research. Different
minds may set out with the most antagonistic views, but the progress
of investigation carries them by a force outside of themselves
to one and the same conclusion. This activity of thought by which
we are carried, not where we wish, but to a foreordained goal,
is like the operation of destiny. No modification of the point
of view taken, no selection of other facts for study, no natural
bent of mind even, can enable a man to escape the predestinate
opinion. This great law is embodied in the conception of truth
and reality. The opinion which is fated to be ultimately agreed
to by all who investigate, is what we mean by the truth, and the
object represented in this opinion is the real. That is the way
I would explain reality. But it may be said that this view is
directly opposed to the abstract definition which we have given
of reality, inasmuch as it makes the characters of the real to
depend on what is ultimately thought about them. But the answer
to this is that, on the one hand, reality is independent, not
necessarily of thought in general, but only of what you or I or
any finite number of men may think about it; and that, on the
other hand, though the object of the final opinion depends on
what that opinion is, yet what that opinion is does not depend
on what you or I or any man thinks. Our perversity and that of
others may indefinitely postpone the settlement of opinion; it
might even conceivably cause an arbitrary proposition to be universally
accepted as long as the human race should last. Yet even that
would not change the nature of the belief, which alone could be
the result of investigation carried sufficiently far; and if,
after the extinction of our race, another should arise with faculties
and disposition for investigation, that true opinion must be the
one which they would ultimately come to. "Truth crushed to
earth shall rise again," and the opinion which would finally
result from investigation does not depend on how anybody may actually
think. But the reality of that which is real does depend on the
real fact that investigation is destined to lead, at last, if
continued long enough, to a belief in it.</p>
<p>
But I may be asked what I have to say to all the minute facts
of history, forgotten never to be recovered, to the lost books
of the ancients, to the buried secrets.</p>
<p class="quoteb">
Full many a gem of purest ray serene<br>
The dark, unfathomed caves of ocean bear;<br>
Full many a flower is born to blush unseen,<br>
And waste its sweetness on the desert air.
</p>
<p>
Do these things not really exist because they are hopelessly beyond
the reach of our knowledge? And then, after the universe is dead
(according to the prediction of some scientists), and all life
has ceased forever, will not the shock of atoms continue though
there will be no mind to know it? To this I reply that, though
in no possible state of knowledge can any number be great enough
to express the relation between the amount of what rests unknown
to the amount of the known, yet it is unphilosophical to suppose
that, with regard to any given question (which has any clear meaning),
investigation would not bring forth a solution of it, if it were
carried far enough. Who would have said, a few years ago, that
we could ever know of what substances stars are made whose light
may have been longer in reaching us than the human race has existed?
Who can be sure of what we shall not know in a few hundred years?
Who can guess what would be the result of continuing the pursuit
of science for ten thousand years, with the activity of the last
hundred? And if it were to go on for a million, or a billion,
or any number of years you please, how is it possible to say that
there is any question which might not ultimately be solved?</p>
<p>
But it may be objected, "Why make so much of these remote
considerations, especially when it is your principle that only
practical distinctions have a meaning?" Well, I must confess
that it makes very little difference whether we say that a stone
on the bottom of the ocean, in complete darkness, is brilliant
or not - that is to say, that it <em><strong>probably</strong></em> makes no
difference, remembering always that that stone may be fished up
tomorrow. But that there are gems at the bottom of the sea, flowers
in the untravelled desert, etc., are propositions which, like
that about a diamond being hard when it is not pressed, concern
much more the arrangement of our language than they do the meaning
of our ideas.</p>
<p>
It seems to me, however, that we have, by the application of our
rule, reached so clear an apprehension of what we mean by reality,
and of the fact which the idea rests on, that we should not, perhaps,
be making a pretension so presumptuous as it would be singular,
if we were to offer a metaphysical theory of existence for universal
acceptance among those who employ the scientific method of fixing
belief. However, as metaphysics is a subject much more curious
than useful, the knowledge of which, like that of a sunken reef,
serves chiefly to enable us to keep clear of it, I will not trouble
the reader with any more Ontology at this moment. I have already
been led much further into that path than I should have desired;
and I have given the reader such a dose of mathematics, psychology,
and all that is most abstruse, that I fear he may already have
left me, and that what I am now writing is for the compositor
and proofreader exclusively. I trusted to the importance of the
subject. There is no royal road to logic, and really valuable
ideas can only be had at the price of close attention. But I know
that in the matter of ideas the public prefer the cheap and nasty;
and in my next paper I am going to return to the easily intelligible,
and not wander from it again. The reader who has been at the pains
of wading through this month's paper, shall be rewarded in the
next one by seeing how beautifully what has been developed in
this tedious way can be applied to the ascertainment of the rules
of scientific reasoning.</p>
<p>
We have, hitherto, not crossed the threshold of scientific logic.
It is certainly important to know how to make our ideas clear,
but they may be ever so clear without being true. How to make
them so, we have next to study. How to give birth to those vital
and procreative ideas which multiply into a thousand forms and
diffuse themselves everywhere, advancing civilisation and making
the dignity of man, is an art not yet reduced to rules, but of
the secret of which the history of science affords some hints.</p>
<hr class="end">
<p class="footer">
Further Reading:<br>
<a href="../../../../../glossary/people/p/e.htm#peirce-charles-sanders" target="_top">Biography</a> |
<a href="../us/peirce2.htm">Three trichotomies of Signs</a> |
<a href="../us/peirce1.htm">What is a Sign?</a><br>
<a href="../us/james.htm">William James</a> |
<a href="../us/bridgman.htm">Percy Bridgman</a> |
<a href="../us/dewey.htm">John Dewey</a> |
<a href="../us/rorty.htm">Richard Rorty</a> |
<a href="../us/quine.htm">Willard Quine</a> |
<a href="../fr/durkheim.htm">Durkheim on Pragmatism</a> |
<a href="../ge/mach.htm">Mach</a> |
<a href="../ge/einstein.htm">Einstein</a>
</p>
<p class="footer">
<a href="../../index.htm" target="_top">Philosophy Archive @ marxists.org</a></p>
</body> |
Charles Peirce (1878)
How to Make our Ideas Clear
Source: How to make our Ideas Clear (1878), from Writings of Charles S Peirce, Volume 3, Indiana University Press. 3 of 4 parts, excluding Part I reproduced here.
See also What Is a Sign?, Three Trichotomies of Signs, On Hegel.
II
The principles set forth in the first of these papers lead, at
once, to a method of reaching a clearness of thought of a far
higher grade than the "distinctness" of the logicians.
We have there found that the action of thought is excited by the
irritation of doubt, and ceases when belief is attained; so that
the production of belief is the sole function of thought. All
these words, however, are too strong for my purpose. It is as
if I had described the phenomena as they appear under a mental
microscope. Doubt and Belief, as the words are commonly employed,
relate to religious or other grave discussions. But here I use
them to designate the starting of any question, no matter how
small or how great, and the resolution of it. If, for instance,
in a horse-car, I pull out my purse and find a five-cent nickel
and five coppers, I decide, while my hand is going to the purse,
in which way I will pay my fare. To call such a question Doubt,
and my decision Belief, is certainly to use words very disproportionate
to the occasion. To speak of such a doubt as causing an irritation
which needs to be appeased, suggests a temper which is uncomfortable
to the verge of insanity. Yet, looking at the matter minutely,
it must be admitted that, if there is the least hesitation as
to whether I shall pay the five coppers or the nickel (as there
will be sure to be, unless I act from some previously contracted
habit in the matter), though irritation is too strong a word,
yet I am excited to such small mental activity as may be necessary
to deciding how I shall act. Most frequently doubts arise from
some indecision, however momentary, in our action. Sometimes it
is not so. I have, for example, to wait in a railway-station,
and to pass the time I read the advertisements on the walls, I
compare the advantages of different trains and different routes
which I never expect to take, merely fancying myself to be in
a state of hesitancy, because I am bored with having nothing to
trouble me. Feigned hesitancy, whether feigned for mere amusement
or with a lofty purpose, plays a great part in the production
of scientific inquiry. However the doubt may originate, it stimulates
the mind to an activity which may be slight or energetic, calm
or turbulent. Images pass rapidly through consciousness, one incessantly
melting into another, until at last, when all is over - it may be
in a fraction of a second, in an hour, or after long years - we
find ourselves decided as to how we should act under such circumstances
as those which occasioned our hesitation. In other words, we have
attained belief.
In this process we observe two sorts of elements of consciousness,
the distinction between which may best be made clear by means
of an illustration. In a piece of music there are the separate
notes, and there is the air. A single tone may be prolonged for
an hour or a day, and it exists as perfectly in each second of
that time as in the whole taken together; so that, as long as
it is sounding, it might be present to a sense from which everything
in the past was as completely absent as the future itself. But
it is different with the air, the performance of which occupies
a certain time, during the portions of which only portions of
it are played. It consists in an orderliness in the succession
of sounds which strike the ear at different times; and to perceive
it there must be some continuity of consciousness which makes
the events of a lapse of time present to us. We certainly only
perceive the air by hearing the separate notes; yet we cannot
be said to directly hear it, for we hear only what is present
at the instant, and an orderliness of succession cannot exist
in an instant. These two sorts of objects, what we are immediately
conscious of and what we are mediately conscious of, are
found in all consciousness. Some elements (the sensations) are
completely present at every instant so long as they last, while
others (like thought) are actions having beginning, middle, and
end, and consist in a congruence in the succession of sensations
which flow through the mind. They cannot be immediately present
to us, but must cover some portion of the past or future. Thought
is a thread of melody running through the succession of our sensations.
We may add that just as a piece of music may be written in parts,
each part having its own air, so various systems of relationship
of succession subsist together between the same sensations. These
different systems are distinguished by having different motives,
ideas, or functions. Thought is only one such system, for its
sole motive, idea, and function, is to produce belief, and whatever
does not concern that purpose belongs to some other system of
relations. The action of thinking may incidentally have other
results; it may serve to amuse us, for example, and among dilettanti
it is not rare to find those who have so perverted thought to
the purposes of pleasure that it seems to vex them to think that
the questions upon which they delight to exercise it may ever
get finally settled; and a positive discovery which takes a favorite
subject out of the arena of literary debate is met with ill-concealed
dislike. This disposition is the very debauchery of thought. But
the soul and meaning of thought, abstracted from the other elements
which accompany it, though it may be voluntarily thwarted, can
never be made to direct itself toward anything but the production
of belief. Thought in action has for its only possible motive
the attainment of thought at rest; and whatever does not refer
to belief is no part of the thought itself.
And what, then, is belief? It is the demi-cadence which closes
a musical phrase in the symphony of our intellectual life. We
have seen that it has just three properties: First, it is something
that we are aware of; second, it appeases the irritation of doubt;
and, third, it involves the establishment in our nature of a rule
of action, or, say for short, a habit. As it appeases
the irritation of doubt, which is the motive for thinking, thought
relaxes, and comes to rest for a moment when belief is reached.
But, since belief is a rule for action, the application of which
involves further doubt and further thought, at the same time that
it is a stopping-place, it is also a new starting-place for thought.
That is why I have permitted myself to call it thought at rest,
although thought is essentially an action. The final
upshot of thinking is the exercise of volition, and of this thought
no longer forms a part; but belief is only a stadium of mental
action, an effect upon our nature due to thought, which will influence
future thinking.
The essence of belief is the establishment of a habit, and different
beliefs are distinguished by the different modes of action to
which they give rise. If beliefs do not differ in this respect,
if they appease the same doubt by producing the same rule of action,
then no mere differences in the manner of consciousness of them
can make them different beliefs, any more than playing a tune
in different keys is playing different tunes. Imaginary distinctions
are often drawn between beliefs which differ only in their mode
of expression; - the wrangling which ensues is real enough, however.
To believe that any objects are arranged as in Fig. 1, and to
believe that they are arranged in Fig. 2, are one and the same
belief; yet it is conceivable that a man should assert one proposition
and deny the other. Such false distinctions do as much harm as
the confusion of beliefs really different, and are among the pitfalls
of which we ought constantly to beware, especially when we are
upon metaphysical ground. One singular deception of this sort,
which often occurs, is to mistake the sensation produced by our
own unclearness of thought for a character of the object we are
thinking. Instead of perceiving that the obscurity is purely subjective,
we fancy that we contemplate a quality of the object which is
essentially mysterious; and if our conception be afterward presented
to us in a clear form we do not recognise it as the same, owing
to the absence of the feeling of unintelligibility. So long as
this deception lasts, it obviously puts an impassable barrier
in the way of perspicuous thinking; so that it equally interests
the opponents of rational thought to perpetuate it, and its adherents
to guard against it.
Another such deception is to mistake a mere difference in the
grammatical construction of two words for a distinction between
the ideas they express. In this pedantic age, when the general
mob of writers attend so much more to words than to things, this
error is common enough. When I just said that thought is an action,
and that it consists in a relation, although a person
performs an action but not a relation, which can only be the result
of an action, yet there was no inconsistency in what I said, but
only a grammatical vagueness.
From all these sophisms we shall be perfectly safe so long as
we reflect that the whole function of thought is to produce habits
of action; and that whatever there is connected with a thought,
but irrelevant to its purpose, is an accretion to it, but no part
of it. If there be a unity among our sensations which has no reference
to how we shall act on a given occasion, as when we listen to
a piece of music, why we do not call that thinking. To develop
its meaning, we have, therefore, simply to determine what habits
it produces, for what a thing means is simply what habits it involves.
Now, the identity of a habit depends on how it might lead us to
act, not merely under such circumstances as are likely to arise,
but under such as might possibly occur, no matter how improbable
they may be. What the habit is depends on when and
how it causes us to act. As for the when,
every stimulus to action is derived from perception; as for the
how, every purpose of action is to produce some
sensible result. Thus, we come down to what is tangible and practical,
as the root of every real distinction of thought, no matter how
subtle it may be; and there is no distinction of meaning so fine
as to consist in anything but a possible difference of practice.
To see what this principle leads to, consider in the light of
it such a doctrine as that of transubstantiation. The Protestant
churches generally hold that the elements of the sacrament are
flesh and blood only in a tropical sense; they nourish our souls
as meat and the juice of it would our bodies. But the Catholics
maintain that they are literally just that; although they possess
all the sensible qualities of wafer-cakes and diluted wine. But
we can have no conception of wine except what may enter into a
belief, either:
That this, that, or the other, is wine; or,
That wine possesses certain properties.
Such beliefs are nothing but self-notifications that we should,
upon occasion, act in regard to such things as we believe to be
wine according to the qualities which we believe wine to possess.
The occasion of such action would be some sensible perception,
the motive of it to produce some sensible result. Thus our action
has exclusive reference to what affects the senses, our habit
has the same bearing as our action, our belief the same as our
habit, our conception the same as our belief; and we can consequently
mean nothing by wine but what has certain effects, direct or indirect,
upon our senses; and to talk of something as having all the sensible
characters of wine, yet being in reality blood, is senseless jargon.
Now, it is not my object to pursue the theological question; and
having used it as a logical example I drop it, without caring
to anticipate the theologian's reply. I only desire to point out
how impossible it is that we should have an idea in our minds
which relates to anything but conceived sensible effects of things.
Our idea of anything is our idea of its sensible
effects; and if we fancy that we have any other we deceive ourselves,
and mistake a mere sensation accompanying the thought for a part
of the thought itself. It is absurd to say that thought has any
meaning unrelated to its only function. It is foolish for Catholics
and Protestants to fancy themselves in disagreement about the
elements of the sacrament, if they agree in regard to all their
sensible effects, here or hereafter.
It appears, then, that the rule for attaining the third grade
of clearness of apprehension is as follows: Consider what effects,
which might conceivably have practical bearings, we conceive the
object of our conception to have. Then, our conception of these
effects is the whole of our conception of the object.
III
Let us illustrate this rule by some examples; and, to begin with
the simplest one possible, let us ask what we mean by calling
a thing hard. Evidently that it will not be scratched by
many other substances. The whole conception of this quality, as
of every other, lies in its conceived effects. There is absolutely
no difference between a hard thing and a soft thing so long as
they are not brought to the test. Suppose, then, that a diamond
could be crystallised in the midst of a cushion of soft cotton,
and should remain there until it was finally burned up. Would
it be false to say that that diamond was soft? This seems a foolish
question, and would be so, in fact, except in the realm of logic.
There such questions are often of the greatest utility as serving
to bring logical principles into sharper relief than real discussions
ever could. In studying logic we must not put them aside with
hasty answers, but must consider them with attentive care, in
order to make out the principles involved. We may, in the present
case, modify our question, and ask what prevents us from saying
that all hard bodies remain perfectly soft until they are touched,
when their hardness increases with the pressure until they are
scratched. Reflection will show that the reply is this: there
would be no falsity in such modes of speech. They
would involve a modification of our present usage of speech with
regard to the words hard and soft, but not of their meanings.
For they represent no fact to be different from what it is; only
they involve arrangements of facts which would be exceedingly
maladroit. This leads us to remark that the question of what would
occur under circumstances which do not actually arise is not a
question of fact, but only of the most perspicuous arrangement
of them. For example, the question of free-will and fate in its
simplest form, stripped of verbiage, is something like this: I
have done something of which I am ashamed; could I, by an effort
of the will, have resisted the temptation, and done otherwise?
The philosophical reply is, that this is not a question of fact,
but only of the arrangement of facts. Arranging them so as to
exhibit what is particularly pertinent to my question - namely,
that I ought to blame myself for having done wrong - it is perfectly
true to say that, if I had willed to do otherwise than I did,
I should have done otherwise. On the other hand, arranging the
facts so as to exhibit another important consideration, it is
equally true that, when a temptation has once been allowed to
work, it will, if it has a certain force, produce its effect,
let me struggle how I may. There is no objection to a contradiction
in what would result from a false supposition. The reductio
ad absurdum consists in showing that contradictory results
would follow from a hypothesis which is consequently judged to
be false. Many questions are involved in the free-will discussion,
and I am far from desiring to say that both sides are equally
right. On the contrary, I am of opinion that one side denies important
facts, and that the other does not. But what I do say is, that
the above single question was the origin of the whole doubt; that,
had it not been for this question, the controversy would never
have arisen; and that this question is perfectly solved in the
manner which I have indicated.
Let us next seek a clear idea of Weight. This is another very
easy case. To say that a body is heavy means simply that, in the
absence of opposing force, it will fall. This (neglecting certain
specifications of how it will fall, etc., which exist in the mind
of the physicist who uses the word) is evidently the whole conception
of weight. It is a fair question whether some particular facts
may not account for gravity; but what we mean by the force
itself is completely involved in its effects.
This leads us to undertake an account of the idea of Force in
general. This is the great conception which, developed in the
early part of the seventeenth century from the rude idea of a
cause, and constantly improved upon since, has shown us how to
explain all the changes of motion which bodies experience, and
how to think about all physical phenomena; which has given birth
to modern science, and changed the face of the globe; and which,
aside from its more special uses, has played a principal part
in directing the course of modern thought, and in furthering modern
social development. It is, therefore, worth some pains to comprehend
it. According to our rule, we must begin by asking what is the
immediate use of thinking about force; and the answer is, that
we thus account for changes of motion. If bodies were left to
themselves, without the intervention of forces, every motion would
continue unchanged both in velocity and in direction. Furthermore,
change of motion never takes place abruptly; if its direction
is changed, it is always through a curve without angles; if its
velocity alters, it is by degrees. The gradual changes which are
constantly taking place are conceived by geometers to be compounded
together according to the rules of the parallelogram of forces.
If the reader does not already know what this is, he will find
it, I hope, to his advantage to endeavour to follow the following
explanation; but if mathematics are insupportable to him, pray
let him skip three paragraphs rather than that we should part
company here.
A path is a line whose beginning and end are distinguished.
Two paths are considered to be equivalent, which, beginning at
the same point, lead to the same point. Thus the two paths, ABCDE
and AFGHE, are equivalent. Paths which do not begin
at the same point are considered to be equivalent, provided that,
on moving either of them without turning it, but keeping it always
parallel to its original position, when its beginning coincides
with that of the other path, the ends also coincide. Paths are
considered as geometrically added together, when one begins where
the other ends; thus the path AE is conceived to be a sum of AB,
BC, CD, and DE. In the parallelogram of Fig. 4 the diagonal AC
is the sum of AB and BC; or, since AD is geometrically equivalent
to BC, AC is the geometrical sum of AB and AD.
All this is purely conventional. It simply amounts to this: that
we choose to call paths having the relations I have described
equal or added. But, though it is a convention, it is a convention
with a good reason. The rule for geometrical addition may be applied
not only to paths, but to any other things which can be represented
by paths. Now, as a path is determined by the varying direction
and distance of the point which moves over it from the starting-point,
it follows that anything which from its beginning to its end is
determined by a varying direction and a varying magnitude is capable
of being represented by a line. Accordingly, velocities
may be represented by lines, for they have only directions and
rates. The same thing is true of accelerations,
or changes of velocities. This is evident enough in the case of
velocities; and it becomes evident for accelerations if we consider
that precisely what velocities are to positions - namely, states
of change of them - that accelerations are to velocities.
The so-called "parallelogram of forces" is simply a
rule for compounding accelerations. The rule is, to represent
the accelerations by paths, and then to geometrically add the
paths. The geometers, however, not only use the "parallelogram
of forces" to compound different accelerations, but also
to resolve one acceleration into a sum of several. Let AB (Fig.
5) be the path which represents a certain acceleration - say, such
a change in the motion of a body that at the end of one second
the body will, under the influence of that change, be in a position
different from what it would have had if its motion had continued
unchanged such that a path equivalent to AB would lead from the
latter position to the former. This acceleration may be considered
as the sum of the accelerations represented by AC and CB. It may
also be considered as the sum of the very different accelerations
represented by AD and DB, where AD is almost the opposite of AC.
And it is clear that there is an immense variety of ways in which
AB might be resolved into the sum of two accelerations.
After this tedious explanation, which I hope, in view of the extraordinary
interest of the conception of force, may not have exhausted the
reader's patience, we are prepared at last to state the grand
fact which this conception embodies. This fact is that if the
actual changes of motion which the different particles of bodies
experience are each resolved in its appropriate way, each component
acceleration is precisely such as is prescribed by a certain law
of Nature, according to which bodies in the relative positions
which the bodies in question actually have at the moment, always
receive certain accelerations, which, being compounded by geometrical
addition, give the acceleration which the body actually experiences.
This is the only fact which the idea of force represents, and
whoever will take the trouble clearly to apprehend what this fact
is, perfectly comprehends what force is. Whether we ought to say
that a force is an acceleration, or that it causes an acceleration,
is a mere question of propriety of language, which has no more
to do with our real meaning than the difference between the French
idiom "Il fait froid" and its English equivalent
"It is cold." Yet it is surprising to see how
this simple affair has muddled men's minds. In how many profound
treatises is not force spoken of as a "mysterious entity,"
which seems to be only a way of confessing that the author despairs
of ever getting a clear notion of what the word means! In a recent
admired work on "Analytic Mechanics" it is stated that
we understand precisely the effect of force, but what force itself
is we do not understand! This is simply a self-contradiction.
The idea which the word force excites in our minds has no other
function than to affect our actions, and these actions can have
no reference to force otherwise than through its effects. Consequently,
if we know what the effects of force are, we are acquainted with
every fact which is implied in saying that a force exists, and
there is nothing more to know. The truth is, there is some vague
notion afloat that a question may mean something which the mind
cannot conceive; and when some hair-splitting philosophers have
been confronted with the absurdity of such a view, they have invented
an empty distinction between positive and negative conceptions,
in the attempt to give their non-idea a form not obviously nonsensical.
The nullity of it is sufficiently plain from the considerations
given a few pages back; and, apart from those considerations,
the quibbling character of the distinction must have struck every
mind accustomed to real thinking.
IV
Let us now approach the subject of logic, and consider a conception
which particularly concerns it, that of reality.
Taking clearness in the sense of familiarity, no idea could be
clearer than this. Every child uses it with perfect confidence,
never dreaming that he does not understand it. As for clearness
in its second grade, however, it would probably puzzle most men,
even among those of a reflective turn of mind, to give an abstract
definition of the real. Yet such a definition may perhaps be reached
by considering the points of difference between reality and its
opposite, fiction. A figment is a product of somebody's imagination;
it has such characters as his thought impresses upon it. That
whose characters are independent of how you or I think is an external
reality. There are, however, phenomena within our own minds, dependent
upon our thought, which are at the same time real in the sense
that we really think them. But though their characters depend
on how we think, they do not depend on what we think those characters
to be. Thus, a dream has a real existence as a mental phenomenon,
if somebody has really dreamt it; that he dreamt so and so, does
not depend on what anybody thinks was dreamt, but is completely
independent of all opinion on the subject. On the other hand,
considering, not the fact of dreaming, but the thing dreamt, it
retains its peculiarities by virtue of no other fact than that
it was dreamt to possess them. Thus we may define the real as
that whose characters are independent of what anybody may think
them to be.
But, however satisfactory such a definition may be found, it would
be a great mistake to suppose that it makes the idea of reality
perfectly clear. Here, then, let us apply our rules. According
to them, reality, like every other quality, consists in the peculiar
sensible effects which things partaking of it produce. The only
effect which real things have is to cause belief, for all the
sensations which they excite emerge into consciousness in the
form of beliefs. The question therefore is, how is true belief
(or belief in the real) distinguished from false belief (or belief
in fiction). Now, as we have seen in the former paper, the ideas
of truth and falsehood, in their full development, appertain exclusively
to the scientific method of settling opinion. A person who arbitrarily
chooses the propositions which he will adopt can use the word
truth only to emphasise the expression of his determination to
hold on to his choice. Of course, the method of tenacity never
prevailed exclusively; reason is too natural to men for that.
But in the literature of the dark ages we find some fine examples
of it. When Scotus Erigena is commenting upon a poetical passage
in which hellebore is spoken of as having caused the death of
Socrates, he does not hesitate to inform the inquiring reader
that Helleborus and Socrates were two eminent Greek philosophers,
and that the latter having been overcome in argument by the former
took the matter to heart and died of it! What sort of an idea
of truth could a man have who could adopt and teach, without the
qualification of a perhaps, an opinion taken so entirely at random?
The real spirit of Socrates, who I hope would have been delighted
to have been "overcome in argument," because he would
have learned something by it, is in curious contrast with the
naive idea of the glossist, for whom discussion would seem to
have been simply a struggle. When philosophy began to awake from
its long slumber, and before theology completely dominated it,
the practice seems to have been for each professor to seize upon
any philosophical position he found unoccupied and which seemed
a strong one, to intrench himself in it, and to sally forth from
time to time to give battle to the others. Thus, even the scanty
records we possess of those disputes enable us to make out a dozen
or more opinions held by different teachers at one time concerning
the question of nominalism and realism. Read the opening part
of the "Historia Calamitatum" of Abelard, who
was certainly as philosophical as any of his contemporaries, and
see the spirit of combat which it breathes. For him, the truth
is simply his particular stronghold. When the method of authority
prevailed, the truth meant little more than the Catholic faith.
All the efforts of the scholastic doctors are directed toward
harmonising their faith in Aristotle and their faith in the Church,
and one may search their ponderous folios through without finding
an argument which goes any further. It is noticeable that where
different faiths flourish side by side, renegades are looked upon
with contempt even by the party whose belief they adopt; so completely
has the idea of loyalty replaced that of truth-seeking. Since
the time of Descartes, the defect in the conception of truth has
been less apparent. Still, it will sometimes strike a scientific
man that the philosophers have been less intent on finding out
what the facts are, than on inquiring what belief is most in harmony
with their system. It is hard to convince a follower of the a
priori method by adducing facts; but show him that an opinion
he is defending is inconsistent with what he has laid down elsewhere,
and he will be very apt to retract it. These minds do not seem
to believe that disputation is ever to cease; they seem to think
that the opinion which is natural for one man is not so for another,
and that belief will, consequently, never be settled. In contenting
themselves with fixing their own opinions by a method which would
lead another man to a different result, they betray their feeble
hold of the conception of what truth is.
On the other hand, all the followers of science are fully persuaded
that the processes of investigation, if only pushed far enough,
will give one certain solution to every question to which they
can be applied. One man may investigate the velocity of light
by studying the transits of Venus and the aberration of the stars;
another by the oppositions of Mars and the eclipses of Jupiter's
satellites; a third by the method of Fizeau; a fourth by that
of Foucault; a fifth by the motions of the curves of Lissajous;
a sixth, a seventh, an eighth, and a ninth, may follow the different
methods of comparing the measures of statical and dynamical electricity.
They may at first obtain different results, but, as each perfects
his method and his processes, the results will move steadily together
toward a destined centre. So with all scientific research. Different
minds may set out with the most antagonistic views, but the progress
of investigation carries them by a force outside of themselves
to one and the same conclusion. This activity of thought by which
we are carried, not where we wish, but to a foreordained goal,
is like the operation of destiny. No modification of the point
of view taken, no selection of other facts for study, no natural
bent of mind even, can enable a man to escape the predestinate
opinion. This great law is embodied in the conception of truth
and reality. The opinion which is fated to be ultimately agreed
to by all who investigate, is what we mean by the truth, and the
object represented in this opinion is the real. That is the way
I would explain reality. But it may be said that this view is
directly opposed to the abstract definition which we have given
of reality, inasmuch as it makes the characters of the real to
depend on what is ultimately thought about them. But the answer
to this is that, on the one hand, reality is independent, not
necessarily of thought in general, but only of what you or I or
any finite number of men may think about it; and that, on the
other hand, though the object of the final opinion depends on
what that opinion is, yet what that opinion is does not depend
on what you or I or any man thinks. Our perversity and that of
others may indefinitely postpone the settlement of opinion; it
might even conceivably cause an arbitrary proposition to be universally
accepted as long as the human race should last. Yet even that
would not change the nature of the belief, which alone could be
the result of investigation carried sufficiently far; and if,
after the extinction of our race, another should arise with faculties
and disposition for investigation, that true opinion must be the
one which they would ultimately come to. "Truth crushed to
earth shall rise again," and the opinion which would finally
result from investigation does not depend on how anybody may actually
think. But the reality of that which is real does depend on the
real fact that investigation is destined to lead, at last, if
continued long enough, to a belief in it.
But I may be asked what I have to say to all the minute facts
of history, forgotten never to be recovered, to the lost books
of the ancients, to the buried secrets.
Full many a gem of purest ray serene
The dark, unfathomed caves of ocean bear;
Full many a flower is born to blush unseen,
And waste its sweetness on the desert air.
Do these things not really exist because they are hopelessly beyond
the reach of our knowledge? And then, after the universe is dead
(according to the prediction of some scientists), and all life
has ceased forever, will not the shock of atoms continue though
there will be no mind to know it? To this I reply that, though
in no possible state of knowledge can any number be great enough
to express the relation between the amount of what rests unknown
to the amount of the known, yet it is unphilosophical to suppose
that, with regard to any given question (which has any clear meaning),
investigation would not bring forth a solution of it, if it were
carried far enough. Who would have said, a few years ago, that
we could ever know of what substances stars are made whose light
may have been longer in reaching us than the human race has existed?
Who can be sure of what we shall not know in a few hundred years?
Who can guess what would be the result of continuing the pursuit
of science for ten thousand years, with the activity of the last
hundred? And if it were to go on for a million, or a billion,
or any number of years you please, how is it possible to say that
there is any question which might not ultimately be solved?
But it may be objected, "Why make so much of these remote
considerations, especially when it is your principle that only
practical distinctions have a meaning?" Well, I must confess
that it makes very little difference whether we say that a stone
on the bottom of the ocean, in complete darkness, is brilliant
or not - that is to say, that it probably makes no
difference, remembering always that that stone may be fished up
tomorrow. But that there are gems at the bottom of the sea, flowers
in the untravelled desert, etc., are propositions which, like
that about a diamond being hard when it is not pressed, concern
much more the arrangement of our language than they do the meaning
of our ideas.
It seems to me, however, that we have, by the application of our
rule, reached so clear an apprehension of what we mean by reality,
and of the fact which the idea rests on, that we should not, perhaps,
be making a pretension so presumptuous as it would be singular,
if we were to offer a metaphysical theory of existence for universal
acceptance among those who employ the scientific method of fixing
belief. However, as metaphysics is a subject much more curious
than useful, the knowledge of which, like that of a sunken reef,
serves chiefly to enable us to keep clear of it, I will not trouble
the reader with any more Ontology at this moment. I have already
been led much further into that path than I should have desired;
and I have given the reader such a dose of mathematics, psychology,
and all that is most abstruse, that I fear he may already have
left me, and that what I am now writing is for the compositor
and proofreader exclusively. I trusted to the importance of the
subject. There is no royal road to logic, and really valuable
ideas can only be had at the price of close attention. But I know
that in the matter of ideas the public prefer the cheap and nasty;
and in my next paper I am going to return to the easily intelligible,
and not wander from it again. The reader who has been at the pains
of wading through this month's paper, shall be rewarded in the
next one by seeing how beautifully what has been developed in
this tedious way can be applied to the ascertainment of the rules
of scientific reasoning.
We have, hitherto, not crossed the threshold of scientific logic.
It is certainly important to know how to make our ideas clear,
but they may be ever so clear without being true. How to make
them so, we have next to study. How to give birth to those vital
and procreative ideas which multiply into a thousand forms and
diffuse themselves everywhere, advancing civilisation and making
the dignity of man, is an art not yet reduced to rules, but of
the secret of which the history of science affords some hints.
Further Reading:
Biography |
Three trichotomies of Signs |
What is a Sign?
William James |
Percy Bridgman |
John Dewey |
Richard Rorty |
Willard Quine |
Durkheim on Pragmatism |
Mach |
Einstein
Philosophy Archive @ marxists.org
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./articles/Leon-Abram/https:..www.marxists.org.subject.jewish.leon.ch7 | <body>
<h2>Abram Leon</h2>
<h1>The Jewish Question</h1>
<p> </p>
<hr>
<table align="center" width="80%">
<tbody><tr>
<td>
<h3>SEVEN<br>
The decay of capitalism and the tragedy of the Jews in the 20th century</h3>
</td>
</tr>
</tbody></table>
<p class="fst">The primary merit of the capitalist regime lay in its tremendous expansion of the productive forces, its creation of a world economy, its permitting an unprecedented development of technology and science. As against the stagnation of the feudal world, capitalism presented an unparalleled dynamism. Hundreds of millions of people, immobilized up to then in a routinized, horizonless existence, suddenly found themselves drawn into the current of a feverish and intensive life.</p>
<p>The Jews lived within the pores of feudal society. When the feudal structure started to crumble, it began expelling elements which were, at one and the same time, foreign to it and indispensable to it. Even before the peasant had left the village for the industrial center, the Jew had abandoned the small medieval town in order to emigrate to the great cities of the world. The destruction of the secular function of Judaism within feudal society is accompanied by its passive penetration into capitalist society.</p>
<p>But if capitalism has given humanity certain tremendous conquests, only its disappearance can allow humanity to enjoy them. Only socialism will be able to lift humanity to the level of the material bases of civilization. But capitalism survives and all the enormous acquisitions turn more and more against the most elementary interests of humanity.</p>
<p>The progress of technology and science has become the progress of the science of death and its technology. The development of the means of production is nothing but the growth of the means of destruction. The world, become too small for the productive apparatus built up by capitalism, is constricted even further by the desperate efforts of each imperialism to extend its sphere of influence. While unbridled export constitutes an inseparable phenomenon of the capitalist mode of production, decaying capitalism tries to get along without it, that is to say, it adds to its disorders the disorder of its own suppression.</p>
<p>Powerful barriers impede the free circulation of merchandise and men. Insurmountable obstacles arise before the masses deprived of work and bread following the breakdown of the traditional feudal world. The decay of capitalism has not only accelerated the decomposition of feudal society but has multiplied a hundredfold the sufferings which resulted from it. The bearers of civilization, in a blind alley, bar the road to those who wish to become civilized. Unable to attain civilization, the latter are still less able to remain in the stage of barbarism. To the peoples whose traditional bases of existence it has destroyed, capitalism bars the road of the future after having closed the road of the past.</p>
<p>It is with these general phenomena that the Jewish tragedy of the twentieth century is tied up. The highly tragic situation of Judaism in our epoch is explained by the extreme precariousness of its social and economic position. The first to be eliminated by decaying feudalism, the Jews were also the first to be rejected by the convulsions of dying capitalism. The Jewish masses find themselves wedged between the anvil of decaying feudalism and the hammer of rotting capitalism.<br>
</p>
<h4><a name="a">A. The Jews in Eastern Europe</a></h4>
<p class="fst">The entire situation of Judaism in Eastern Europe is explained by the combination of the decline of the old feudal forms and of the degeneration of capitalism. The social differentiation which took place in the village as a result of capitalist penetration brought about an influx into the cities of enriched as well as proletarianized peasants; the former wanted to invest their capital; the latter to offer their labor. But the openings for the placement of capital were as slight as those for work. Hardly born, the capitalist system already showed all the symptoms of senility. The general decay of capitalism manifested itself in crises and unemployment within the countries of Eastern Europe; by the closing of all the outlets for emigration outside their frontiers. Seven to eight million peasants were landless and almost without work in “independent” Poland. Placed between two fires, the Jews were exposed to the hostility of the petty bourgeoisie and the peasantry; who sought to find a place for themselves at the expense of the Jews. “Jewish positions are particularly threatened by the urban Polish bourgeoisie and by the rich peasants who seek a solution for their difficulties through a fierce economic nationalism, whereas the Polish working class suffering from permanent unemployment, seeks a remedy for its poverty through social liberation and puts its reliance upon economic and political solidarity rather than upon a sterile and murderous competition ....” <a href="#n1" name="f1">[1]</a></p>
<p>It is precisely in the regions which capitalism had most developed that a non-Jewish commercial class formed most rapidly. It is there that the anti-Semitic struggle was fiercest. “The decrease in the number of Jewish shops has been greatest in the central provinces, that is to say, in a region where the population is purely Polish, where the peasants have attained a higher standard of living, where industry is more developed, which is very important for the material and intellectual situation of the village.” <a href="#n2" name="f2">[2]</a></p>
<p>Whereas in 1914, 72 percent of the stores in the villages were Jewish, this fell to 34 percent in 1935, that is to say, by more than one-half. The situation was better for the Jews in territories less developed economically. “The participation of Jews in commerce is more important in the most backward provinces,” maintains Lipovski. “The eastern sections belonging to White Russians are, in all their relations – economic, intellectual, and political – the most backward part of Poland. In these regions, the absolute majority of Jewish businessmen has increased by a third.” <a href="#n3" name="f3">[3]</a> In 1938, 82.6 percent of the shops in the backward regions of Poland were in the hands of Jews. <a href="#n4" name="f4">[4]</a></p>
<p>All of these facts are further proof that the destruction of feudalism is at the bottom of the Jewish question in Eastern Europe. The more backward a region is, the more easily are the Jews able to preserve their secular positions. But it is the general decay of capitalism which renders the Jewish question impossible of solution. The crisis and chronic unemployment make it impossible for the Jews to go into other professions, producing a frightful crowding in the professions which they follow and unceasingly augmenting anti-Semitic violence. The governments of the provincial nobles and large capitalists naturally endeavored to organize the anti-Jewish current and thereby divert the masses from their real enemy. “Resolve the Jewish question” became for them a synonym for the solution of the social question. In order to make place for the “national forces,” the state organized a systematic struggle for “dejudifying” all the professions. The methods of “Polanizing” business in Poland proceeded from simple boycotting of Jewish stores by means of propaganda, right up to pogroms and incendiarism. Here, by way of example, is a “victory bulletin” published June 14, 1936, in the governmental paper <strong>Illustrowany Kurjer codztienny</strong>: “One hundred and sixty Polish business positions were conquered during the first months of this year in the Madom district. At Przktyk alone – a notorious pogrom city – 50 business licenses were purchased by Poles. All in all, 2,500 Polish business positions were conquered in the various districts.” <a href="#n5" name="f5">[5]</a></p>
<p>Jewish craftsmanship was no more tenderly handled by the Polish governments. Boycott, exorbitant taxes, Polish examinations (thousands of Jewish craftsmen did not know this language), contributed to grinding down the Jewish artisans. Deprived of unemployment relief, the craft proletariat was one of the most disinherited. The wages of Jewish workers were very low and their living conditions frightful (workday up to eighteen hours).</p>
<p>The universities constituted the favorite arena for the anti-Semitic struggle. The Polish bourgeoisie exerted all its efforts to prevent Jews from entering the intellectual professions. The Polish universities became places of veritable pogroms, throwing people out of windows, etc. Well before Hitler’s stars of David, the Polish bourgeoisie initiated ghetto benches in the umversities. “Legal” measures, more circumspect but no less effective, rendered entry into the universities almost impossible for the Jewish youth, whose ancestral heritage had strongly developed their intellectual faculties. The percentage of Jewish students in Poland declined from 24.5 percent in 1923–33 to 13.2 percent in 1933–36. <a href="#n6" name="f6">[6]</a></p>
<p>The same policy of excluding Jewish students was followed in Lithuania and Hungary. The percentage of Jewish students in Lithuania declined from 15.7 percent in 1920 to 8.5 percent in 1931; in Hungary, from 31.7 percent in 1918 to 10.5 percent in 1931. In general the situation of the Jews in Hungary had for centuries resembled in every way that of Poland.</p>
<p>In the country of great feudal magnates, the Jews for a long time played the role of an intermediary class between the lords and the peasants.</p>
<p class="quoteb">“One of our correspondents reminds us that at the end of the nineteenth century; a certain Count de Palugyay had great trouble in avoiding expulsion from the National Club of the Hungarian nobility at Budapest, because he wanted to take charge personally of the industrial transformation of his agricultural products, particularly the distillation of alcohol and whiskey from potatoes; he had even gone so far as to take charge of their sale!</p>
<p class="quote">“The liberal professions were likewise not unaffected by this prejudice, which was as widespread among the high aristocracy as among the petty nobility. Shortly before the fall of the dual monarchy, a Hungarian magnate expressed his disgust of noblemen, who ‘for money, examined the throats of individuals whom they did not know.’ A natural consequence of this attitude was that the Jews formed the intermediary class between the peasantry and the nobility, particularly in the towns ... Trade, and especially petty trade, was a Jewish matter in the eyes of the people.</p>
<p class="quote">“Even today, in the minds of the masses of the Magyar population, the shop, and in a general way everything connected with the exploitation of the shop, are thought of as Jewish, even if this shop has become an instrument of economic struggle against the Jews.</p>
<p class="quote">“Here is a story which strikingly illustrates this state of mind: A peasant woman sent her son on some purchasing errands. She wanted them taken care of at the semistateized <em>Hangya</em> cooperative and not at a Jewish shop, so she said to him: ‘Pista, go to the Jew; not to the Jew who is a Jew, but to the new shop.’ ” <a href="#n7" name="f7">[7]</a></p>
<p class="fst">The process of elimination of the Jews from their economic positions took place in all of Eastern Europe. The situation of the Jewish masses became hopeless. A declassed youth, having no possibility of integrating itself into economic life, lived in black despair. Prior to the second war, 40 percent of the Jewish population of Poland had to resort to philanthropic institutions. Tuberculosis raged.</p>
<p class="quoteb">“Let us give the floor to correspondents of the Economic and Statistical Section of the Jewish Scientific Institute residing in regions where despair and the complete absence of a better future were stifling the Jewish youth. Here is what one wrote of Miedzyrzecze, province of Volhynia: ‘The condition of the Jewish youth is very difficult, notably that of the sons and daughters of tradesmen who are without work because their parents do not require assistance. It is impossible to open new businesses. Seventy-five boys and 120 young girls, aged 15 to 28 years, have no hope whatever of integrating themselves into the economic life of the country.’ Of Sulejow (province of Lodz) we are in possession of a more detailed picture, which is characteristic of the small towns of Poland: ‘Almost 50 percent of the children of Jewish businesspeople work with their parents, but solely because they are unable to find another job. Twenty-five percent are learning some sort of trade and 25 percent are completely idle. Seventy percent of the children of artisans remain in the workshops of their parents even though the latter are almost without work and can very well get along without assistants. Ten percent are learning new trades ... twenty percent have nothing to do. The sons of rabbis and of employees of Jewish communities are trying to attain a livelihood by learning a trade. The entire youth desires to emigrate, 90 percent to Palestine, but because of the limited number of emigration visas, their chances are slim. And yet they are ready to go to the North Pole or the South Pole, just so long as they can tear themselves out of this stagnation. More and more the youth is turning towards the crafts and the number of young people in business is on the decline.’ ” <a href="#n8" name="f8">[8]</a><br>
</p>
<h4><a name="b">B. The Jews in Western Europe</a></h4>
<p class="fst">The condition of Judaism, rendered hopeless in Eastern Europe by the combined decay of feudalism and capitalism – which created a stifling atmosphere filled with insane antagonisms – had repercussions of a certain worldwide character. Western and Central Europe became the theater of a frightful rise of anti-Semitism. Whereas the reduction in Jewish emigration, whose average annual rate declined from 155,000 between 1901 and 1914 to 43,657 between 1926 and 1935, greatly aggravated the situation of the Jews in Eastern Europe, the general crisis of capitalism made even this reduced emigration an intolerable burden to the Western countries. <a href="#n9" name="f9">[9]</a></p>
<p>The Jewish question reached unprecedented sharpness not only in the countries of emigration but in the countries of immigration as well. Even before the first imperialist war, the mass arrival of Jewish immigrants created a strong anti-Semitic movement among the middle classes of several Central and Western European countries. We need only recall the great successes of the anti-Semitic Social Christian Party at Vienna and of its leader, Lueger; the sweeping rise of anti-Semitism in Germany (Treitschke), and the Dreyfus Affair. Anti-Semitism showed its roots most clearly in Vienna, one of the great centers of Jewish immigration before the first imperialist war. The petty bourgeoisie, ruined by the development of monopoly capitalism and headed for proletarianization, was exasperated by the mass arrival of the Jewish element, traditionally petty-bourgeois and artisan.</p>
<p>After the first imperialist war, the countries of Western and Central Europe: Germany, Austria, France, and Belgium, saw tens of thousands of Jewish immigrants, in tatters, lacking all resources, pour in from Eastern Europe. The seeming postwar prosperity permitted these elements to penetrate into all branches of business and artisanry. But even the Jewish immigrants who had penetrated into the plants did not remain there for long.</p>
<p>The long commercial past of the Jews weighed heavily on their descendants and the favorable postwar economic conditions brought about a perceptible process of deproletarianization in Western Europe as well as in the United States. The Jewish workers retained their artisan position in the countries of immigration. In Paris in 1936 out of 21,083 Jewish workers belonging to trade unions, 9,253 worked at home.</p>
<p>The economic catastrophe of 1929 threw the petty-bourgeois masses into a hopeless situation. The overcrowding in small business, artisanry and the intellectual professions took on unheard of proportions. The petty bourgeois regarded his Jewish competitor with growing hostility; for the latter’s professional cleverness, the result of centuries of practice, often enabled him to survive hard times more easily. Anti-Semitism even gained the ear of wide layers of worker-artisans, who traditionally had been under petty-bourgeois influence.</p>
<p>It is consequently incorrect to accuse big business of having brought about anti-Semitism. Big business only proceeded to make use of the elementary anti-Semitism of the petty-bourgeois masses. It fashioned it into a major component of fascist ideology. By the myth of “Jewish capitalism,” big business endeavored to divert and control the anticapitalist hatred of the masses for its own exclusive profit. The real possibility of an agitation against Jewish capitalists lay in the antagonism between monopoly capital and speculative-commercial capital, which Jewish capital was in the main. The relatively greater permeability of speculative capital (stock exchange scandal) allowed monopoly capital to channel the hatred of the petty-bourgeois masses and even of a part of the workers against “Jewish capitalism.”<br>
</p>
<h4><a name="c">C. Racism</a></h4>
<p class="quoteb">“Ideology is a process accomplished by the so-called thinker consciously, indeed, but with a false consciousness. The real motives impelling him remain unknown to him, otherwise it would not be an ideological process at all. Hence he imagines false or apparent motive forces.” <a href="#n10" name="f10">[10]</a></p>
<p class="fst">Up to now we have tried to understand the real bases of anti-Semitism in our time. But it is sufficient to consider the role played in the development of anti-Semitism by the wretched document fabricated by the Tsarist Okhrana, <strong>The Protocols of Zion</strong>, to become aware of the importance of the “false or apparent motive forces” of anti-Semitism. In Hitlerite propaganda today, the real motivation of anti-Semitism in Western Europe – the economic competition of the petty bourgeoisie – no longer plays any role. On the contrary; the most fantastic allegations of <strong>The Protocols of Zion</strong> – the plans of universal domination by international Judaism – reappear in every speech and manifesto of Hitler. We must therefore analyze this mythical ideological element of anti-Semitism.</p>
<p>Religion constitutes the most characteristic example of an ideology. Its true motive forces must be sought in the very prosaic domain of the material interests of a class, but it is in the most ethereal spheres that its apparent motive forces are found. Nevertheless, the God who launched the Puritan fanatics of Cromwell against the English aristocracy and Charles I was nothing but the reflection or symbol of the interests of the English peasantry and bourgeoisie. Every religious revolution is in reality a social revolution.</p>
<p>It is the unbridled development of the productive forces colliding against the narrow limits of consumption which constitute the true motive force of imperialism, the highest stage of capitalism. But it is the “race” which seems to be its most characteristic apparent force. Racism is therefore in the first place the ideological disguise of modern imperialism. The “race struggling for its living space” is nothing but the reflection of the permanent necessity for expansion which characterizes finance or monopoly capitalism.</p>
<p>While the fundamental contradiction of capitalism, the contradiction between production and consumption, involves for the big bourgeoisie the necessity to struggle for the conquest of foreign markets, it compels the petty bourgeoisie to struggle for the expansion of the domestic market. The lack of foreign markets for the big capitalists proceeds hand in hand with the lack of domestic markets for the small capitalists. Whereas the big bourgeoisie struggles furiously against its competitors on the foreign market, the petty bourgeoisie combats its competitors on the domestic market not a whit less fiercely. “Racism” abroad is consequently accompanied by “racism” at home. The unprecedented aggravation of capitalist contradictions in the twentieth century brings with it a growing exacerbation of “racism” abroad as well as “racism” at home.</p>
<p>The primarily commercial and artisan character of Judaism, heritage of a long historical past, makes it Enemy Number One of the petty bourgeoisie on the domestic market. It is therefore the petty-bourgeois character of Judaism which makes it so odious to the petty bourgeoisie. But while the historical past of Judaism exercises a determining influence on its present social composition, it has effects no less important on the representation of the Jews in the consciousness of the popular masses. For the latter, the Jew remains the traditional representative of the “money power.”</p>
<p>This fact is of great importance because the petty bourgeoisie is not only a “capitalist” class, that is to say, a repository “in miniature” of all capitalist tendencies; it is also “anticapitalist.” It has a strong, though vague, consciousness of being ruined and despoiled by big business. But its hybrid character, its interclass position, does not permit it to understand the true structure of society nor the real character of big business. It is incapable of understanding the true tendencies of social evolution, for it has a presentiment that this evolution cannot help but be fatal for it. It wants to be anticapitalist without ceasing to be capitalist. It wants to destroy the “bad” character of capitalism, that is to say, the tendencies which are ruining it, while preserving the “good” character of capitalism which permits it to live and get rich. But since there does not exist a capitalism which has the “good” tendencies without also possessing the “bad,” the petty bourgeoisie is forced to dream it up. It is no accident that the petty bourgeoisie has invented “supercapitalism,” the “bad” deviation of capitalism, its evil spirit. It is no accident that its theoreticians have struggled mightily for over a century (Proudhon) against “bad speculative capitalism” and defended “useful productive capitalism.” <a href="#n11" name="f11">[11]</a> The attempt of Nazi theoreticians to distinguish between “national productive capital” and “Jewish parasitic capital” is probably the last attempt of this kind. “Jewish capitalism” can best represent the myth of “bad capitalism.” The concept of “Jewish wealth” is in truth solidly entrenched in the consciousness of the popular masses. It is only a question of reawakening and giving “presence,” by means of a well-orchestrated propaganda, to the image of the “usurious” Jew, against whom peasant, petty bourgeois, and lord had struggled over a long period. The petty bourgeoisie and a layer of workers remaining under its sway are easily influenced by such propaganda and fall into this trap of “Jewish capitalism.”</p>
<p><em>Historically, the success of racism means that capitalism has managed to channel the anticapitalist consciousness of the masses into a form that antedates capitalism and which no longer exists except in a vestigial state;</em> this vestige is nevertheless still sufficiently great to give a certain appearance of reality to the myth.</p>
<p>We see that racism is made up of rather strange elements. It reflects the expansionist will of big capital. It expresses the hatred of the petty bourgeoisie for “foreign” elements within the domestic market as well as its anticapitalist tendencies.</p>
<p>It is in its aspect as a capitalist element that the petty bourgeoisie fights its Jewish competitor, and in its capitalist aspect that it struggles against “Jewish capital.” Racism finally diverts the anticapitalist struggle of the masses into a form that antedates capitalism, persisting only in a vestigial state.</p>
<p>But while scientific analysis permits us to reveal its component parts, racist ideology must appear as an absolutely homogeneous “doctrine.” Racism serves precisely to cast all classes into the crucible of a “racial community” opposed to other races. The racist myth strives to appear as a whole, having only vague connections with its origins which are often very different. It endeavors to fuse its different elements together in perfect fashion.</p>
<p>Thus, for example, “foreign” racism, the ideological disguise of imperialism, is not compelled, in and of itself, to adopt a strong anti-Semitic coloration. But from the necessity of synchronization, it generally does take on this character. The anticapitalism of the masses, first channeled in the direction of Judaism, is then carried over against the “foreign enemy,” which is identified with Judaism. The “Germanic race” will find itself faced with the duty of fighting the “Jew,” its principal enemy, in all his disguises: that of domestic Bolshevism and liberalism, of Anglo-Saxon plutocracy and of foreign Bolshevism. Hitler states in <strong>Mein Kampf</strong> that it is indispensable to present the various enemies under a common aspect, otherwise there is a danger that the masses will start thinking too much about the differences which exist among those enemies. That is why racism is a myth and not a doctrine. It demands faith, and fears reason like the plague. Anti-Semitism contributes most to cementing the different elements of racism.</p>
<p>Just as it is necessary to cast the different classes into <em>one single race</em>, so is it also necessary that this “race” have only a single enemy: “the international Jew.” The myth of race is necessarily accompanied by its “negative” – the antirace, the Jew. The racial “community” is built on hatred of the Jews, a hatred of which the most solid “racial” foundation is buried in history in a period when the Jew was in effect a foreign body and hostile to all classes. The irony of history wills that the most radical anti-Semitic ideology in all history should triumph precisely in the period when Judaism is on the road of economic and social assimilation. But like all “ironies of history” this seeming paradox is very understandable. At the time when the Jew was unassimilable, at a time when he really represented “capital,” he was indispensable to society. There could be no question of destroying him. At the present time, capitalist society, on the edge of the abyss, tries to save itself by resurrecting the Jew and the hatred of the Jews. But it is precisely because the Jews do not play the role which is attributed to them that anti-Semitic persecution can take on such an amplitude. Jewish capitalism is a myth; that is why it is so easily vanquished. But in vanquishing its “negative,” racism at the same time destroys the foundations for its own existence. In the measure that the phantom of “Jewish capitalism” disappears, capitalist reality appears in all its ugliness. The social contradictions, banished for a moment by the fumes of “racial” intoxication, reappear in all their sharpness. In the long run, the myth proves powerless against reality.</p>
<p>Despite its apparent homogeneity, the very evolution of racism allows to be clearly discerned the economic, social, and political transformations that it strives to conceal. At the beginning, in order to arm itself for the struggle for its “living space,” for imperialist war, big business must beat down its domestic enemy, the proletariat. It is the petty bourgeoisie and declassed proletarian elements that furnish it with its shock troops, capable of smashing the economic and political organizations of the proletariat. Racism, at the beginning, appears therefore as an ideology of the petty bourgeoisie. Its program reflects the interests and illusions of this class. It promises struggle against “supercapitalism,” against the trusts, stock exchange, big department stores, etc. But as soon as big business has succeeded in smashing the proletariat, thanks to the support of the petty bourgeoisie, the latter becomes an unbearable burden to it. The program of preparation for war implies precisely the ruthless elimination of small business, a prodigious development of the trusts, an intensive proletarianization. This same military preparation necessitates the support or at least a kind of neutrality from the proletariat, the most important factor in production. Thus big business does not hesitate for a moment to violate its most solemn promises in the most cynical way and to strangle the petty bourgeoisie in the most brutal fashion. Racism now devotes itself to flattering the proletariat, to appearing as a radically “socialist” movement. It is here that the Judaist-capitalist identification plays its most important role. The radical expropriation of Jewish capitalists has to fulfill the role of “collateral,” of “endorser” of racism’s anticapitalist will to struggle. The anonymous character of the capitalism of the monopolies, in contrast to the generally personal (and often speculative commercial) character of Jewish businesses, facilitates this operation of spiritual swindling. The common man more readily sees the “real” capitalist, the businessman, the manufacturer, the speculator, than the “respectable” director of a corporation who is made to pass as an “indispensable” factor in production. It is in this way that racist ideology reaches the following identifications: Judaism = capitalism; racism = socialism; a regulated war economy = a planned socialist economy.</p>
<p>It is undeniable that large layers of workers, deprived of their organizations, blinded by the foreign political successes of Hitler, have allowed themselves to be taken in by racist mythology, just as was the case previously with the petty bourgeoisie. For the time being the bourgeoisie appears to have attained its objective. The furious anti-Jewish persecution extending throughout Europe serves to indicate the “definitive” victory of racism, the final defeat of “international Judaism.”<br>
</p>
<h4><a name="d">D. The Jewish Race</a></h4>
<p class="fst">The racial “theory” now dominant is nothing but an attempt to establish racism “on a scientific basis.” It is devoid of any scientific value. It is enough to observe the pitiful acrobatics which the racist theoreticians perform to demonstrate the relationship of the “Germans and the Nipponese” or the irrevocable antagonism between “the heroic German spirit” and the “commercial Anglo-Saxon spirit” in order to be completely convinced of this. The ramblings of a Montadon on “deprostituting” the Jewish “ethnic entity” by ... compelling the Jews to wear stars of David, are certainly not worth much. The real prostitution of certain “scholars” to racism presents an unusual spectacle of the decline of human dignity. But we see there only an end product of the complete decay of bourgeois science which had already, under democracy, lost its objectivity.</p>
<p>Racist stupidities must not however deter us from examining the extent to which it is necessary to speak of a Jewish race. The most superficial examination of the question leads us to the conclusion that the Jews constitute in reality a mixture of the most diverse races. It is evidently the Diaspora character of Judaism which is the fundamental cause of this fact. But even in Palestine, the Jews were far from constituting a “pure race.” Leaving aside the fact that, according to the Bible, the Israelites brought a mass of Egyptians with them when they left Egypt and that Strabo considered them as descendants of Egyptians, it is enough to recall the numerous races which had established themselves in Palestine: Hittites, Canaanites, Philistines (“Aryans”), Egyptians, Phoenicians, Greeks, and Arabs. According to Strabo, Judea was inhabited by Phoenicians, Egyptians, and Arabs. The development of Jewish proselytism during the Greek and Roman era strongly accentuated the mixed character of Judaism. As early as 139 B.C., the Jews were driven out of Rome for having made proselytes there. The community of Antioch was composed in large part of proselytes. Proselytism continued even during subsequent eras. The compulsory conversion of slaves to Judaism, the conversion of the Khazars as well as of other races and tribes in the course of the long Diaspora, have been so many factors which have made a characteristic conglomeration of races out of Judaism.</p>
<p>At the present time there is absolutely no racial homogeneity between the Yemenite Jews, for example, and the Jews of Dagestan. The first are Oriental in type while the second belong to the Mongol race. There are black Jews in India, Ethiopian Jews (Falasha), “Troglodyte” Jews in Africa. However, this fundamental difference which exists, for example, between the Jews of Dagestan and the Yemenite Jews, does not exhaust the question. Actually nine-tenths of today’s Jews are inhabitants of Eastern Europe or descendants of Jews from this area.</p>
<p>Is there a European-Oriental Jewish race? Here is how the anti-Semitic theoretician, Hans Gunther, answers this question: “Eastern Judaism, which comprised close to nine-tenths of the Jews, consisting today of the Jews of Russia, Poland, Galicia, Hungary Austria, and Germany, as well as the largest part of the Jews in North America and a large part of Western European Jewry constitutes a racial mixture which we may designate as Western Asiatic-Oriental-East Baltic-Eastern-Central Asiatic-Nordic-Hamitic-Negroid.” <a href="#n12" name="f12">[12]</a></p>
<p>According to research undertaken in NewYork of 4,235 Jews there were:</p>
<table align="center" cellspacing="1" cellpadding="1">
<tbody><tr>
<td>
<p class="smc"> </p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc">JEWS<br>
(PERCENT)</p>
</td>
<td rowspan="4">
<p class="smc"> </p>
</td>
<td>
<p class="smc">JEWESSES<br>
(PERCENT)</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">BRUNET TYPES</p>
</td>
<td>
<p class="smc">52.62</p>
</td>
<td>
<p class="smc">56.94</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">BLOND TYPES</p>
</td>
<td>
<p class="smc">10.42</p>
</td>
<td>
<p class="smc">10.27</p>
</td>
</tr>
<tr>
<td>
<p class="sm1">MIXED TYPES</p>
</td>
<td>
<p class="smc">36.96</p>
</td>
<td>
<p class="smc">32.79</p>
</td>
</tr>
</tbody></table>
<p class="fst">14.25 percent of Jews and 12.7 percent of Jewesses had what is called the Jewish nose, which is nothing else but the nose common to the peoples of Asia Minor, especially widespread among the Armenians. This nose is also common among the Mediterranean peoples as well as among the Bavarians (Dinaric race). These few observations permit us to see how stupid the concept of the “Jewish race” is. The Jewish race is a myth. On the other hand, it is correct to say that the Jews constitute a racial mixture that is different from the racial mixtures of most of the European peoples, especially the Slavs and Germans.</p>
<p>However, it is not so much the anthropological characteristics of the Jews which distinguish them from other peoples as their physiological, pathological, and, above all, psychological characteristics.</p>
<p>It is primarily the economic and social function of Judaism throughout history which explains this phenomenon. For centuries the Jews were the inhabitants of cities, occupied in trade. The Jewish type is far more the result of this secular function than a racial characteristic. The Jews have absorbed a mass of heterogeneous racial elements but all these elements have been subjected to the influence of the special conditions in which the Jews lived, which, in the long run, ended up with the creation of the so-called “Jewish type.” This is the result of a long selection, not racial but economic and social. The physical weakness, the frequency of certain illnesses like diabetes, nervous disorders, a specific body posture, etc., are not racial characteristics but are the result of a specific social position. Nothing is more ridiculous than to explain, for example, the Jews’ penchant for trade or their tendency to abstract thinking on the basis of their race. Wherever the Jews are assimilated economically, wherever they cease to form a class, they rapidly lose all these characteristics. And so it happens that where the racist theoreticians thought they were face to face with a “genuine race,” they were in reality only viewing a human community, whose specific characteristics are above all the result of the social conditions in which it lived for many centuries. A change in these social conditions must naturally bring with it the disappearance of the “racial characteristics” of Judaism.<br>
</p>
<h4><a name="e">E. Zionism</a></h4>
<p class="fst">Zionism was born in the light of the incendiary fires of the Russian pogroms of 1882 and in the tumult of the Dreyfus Affair – two events which expressed the sharpness that the Jewish problem began to assume at the end of the nineteenth century.</p>
<p>The rapid capitalist development of Russian economy after the reform of 1863 made the situation of the Jewish masses in the small towns untenable. In the West, the middle classes, shattered by capitalist concentration, began to turn against the Jewish element whose competition aggravated their situation. In Russia, the association of the “Lovers of Zion” was founded. Leo Pinsker wrote <strong>Auto-emancipation</strong>, in which he called for a return to Palestine as the sole possible solution of the Jewish question. In Paris, Baron Rothschild, who like all the Jewish magnates viewed with very little favor the mass arrival of Jewish immigrants in the Western countries, became interested in Jewish colonization in Palestine. To help “their unfortunate brothers” to return to the land of their “ancestors,” that is to say, to go as far away as possible, contained nothing displeasing to the Jewish bourgeoisie of the West, who with reason feared the rise of anti-Semitism. A short while after the publication of Leo Pinsker’s book, a Jewish journalist of Budapest, Theodor Herzl, saw anti-Semitic demonstrations at Paris provoked by the Dreyfus Affair. Soon he wrote <strong>The Jewish State</strong>, which to this day remains the bible of the Zionist movement. From its inception, Zionism appeared as a reaction of the Jewish petty bourgeoisie (which still forms the core of Judaism), hard hit by the mounting anti-Semitic wave, kicked from one country to another, and striving to attain the Promised Land where it might find shelter from the tempests sweeping the modern world.</p>
<p>Zionism is thus a very young movement; it is the youngest of the European national movements. That does not prevent it from pretending, even more than all other nationalism, that it draws its substance from a far distant past. Whereas Zionism is in fact the product of the last phase of capitalism, of capitalism beginning to decay, it pretends to draw its origin from a past more than two thousand years old. Whereas Zionism is essentially a reaction against the situation created for Judaism by the combination of the destruction of feudalism and the decay of capitalism, it affirms that it constitutes a reaction against the state of things existing since the fall of Jerusalem in the year 70 of the Christian era. Its recent birth is naturally the best reply to these pretensions. As a matter of fact, how can one believe that the remedy for an evil existing for two thousand years was discovered only at the end of the nineteenth century? But like all nationalisms – and even more intensely – Zionism views the historic past in the light of the present. In this way, too, it distorts the present-day picture. Just as France is represented to French children as existing since the Gaul of Vercingetorix, just as the children of Provence are told that the victories that the kings of Ile de France won over their ancestors were their own successes, in the same way Zionism tries to create the myth of an eternal Judaism, eternally the prey of the same persecutions. Zionism sees in the fall of Jerusalem the cause of the dispersion, and consequently, the fountainhead of all Jewish misfortunes of the past, present, and future. “The source of all the misfortunes of the Jewish people is the loss of its historic country and its dispersion in all countries,” declares the Marxist delegation of the <em>Poale-Zion</em> to the Dutch-Scandinavian committee. After the violent dispersion of the Jews by the Romans, their tragic history continues. Driven out of their country, the Jews did not wish (oh beauty of free will!) to assimilate. Imbued with their “national cohesiveness,” “with a superior ethical feeling,” and with “an indestructible belief in a single God” (see the article of Ben-Adir on <em>Anti-Semitism</em> in the <strong>General Encyclopedia</strong>), they have resisted all attempts at assimilation. Their sole hope during these somber days which lasted two thousand years has been the vision of a return to their ancient country.</p>
<p>Zionism has never seriously posed this question: Why, during these two thousand years, have not the Jews really tried to return to this country? Why was it necessary to wait until the end of the nineteenth century for a Herzl to succeed in convincing them of this necessity? Why were all the predecessors of Herzl, like the famous Sabbatai Zebi, treated as false Messiahs? Why were the adherents of Sabbatai Zebi fiercely persecuted by orthodox Judaism?</p>
<p>Naturally, in replying to these interesting questions, refuge is sought behind religion. “As long as the masses believed that they had to remain in the Diaspora until the advent of the Messiah, they had to suffer in silence,” states Zitlovski <a href="#n13" name="f13">[13]</a>, whose Zionism is moreover quite conditional. Nevertheless this explanation tells us nothing. What is required is precisely an answer to the question of why the Jewish masses believed that they had to await the Messiah in order to be able to “return to their country.” Religion being an ideological reflection of social interests, it must perforce correspond to them. Today religion does not at all constitute an obstacle to Zionism. <a href="#n14" name="f14">[14]</a></p>
<p>In reality just so long as Judaism was incorporated in the feudal system, the “dream of Zion” was nothing but a dream and did not correspond to any real interest of Judaism. The Jewish tavern owner or “farmer” of sixteenth-century Poland thought as little of “returning” to Palestine as does the Jewish millionaire in America today. Jewish religious Messianism was no whit different from the Messianism belonging to other religions. Jewish pilgrims who went to Palestine met Catholic, Orthodox, and Moslem pilgrims. Besides it was not so much the “return to Palestine” which constituted the foundation of this Messianism as the belief in the rebuilding of the temple of Jerusalem.</p>
<p>All of these idealist conceptions of Zionism are naturally inseparable from the dogma of eternal anti-Semitism. “As long as the Jews will live in the Diaspora, they will be hated by the natives.” This essential point of view for Zionism, its spinal column so to speak, is naturally given different nuances by its various currents. Zionism transposes modern anti-Semitism to all of history; it saves itself the trouble of studying the various forms of anti-Semitism and their evolution. However, we have seen that in different historical periods, Judaism made up part of the possessing classes and was treated as such. To sum up [the idealist conception], the sources of Zionism must be sought in the impossibility of assimilation because of “eternal anti-Semitism” and of the will to safeguard the “treasures of Judaism.” <a href="#n15" name="f15">[15]</a></p>
<p>In reality, Zionist ideology, like all ideologies, is only the distorted reflection of the interests of a class. It is the ideology of the Jewish petty bourgeoisie, suffocating between feudalism in ruins and capitalism in decay. The refutation of the ideological fantasies of Zionism does not naturally refute the real needs which brought them into being. It is modern anti-Semitism, and not mythical “eternal” anti-Semitism, which is the best agitator in favor of Zionism. Similarly, the basic question to determine is: To what extent is Zionism capable of resolving not the “eternal” Jewish problem but the Jewish question in the period of capitalist decay?</p>
<p>Zionist theoreticians like to compare Zionism with all other national movements. But in reality, the foundations of the national movements and that of Zionism are altogether different. The national movement of the European bourgeoisie is the consequence of capitalist development; it reflects the will of the bourgeoisie to create the national bases for production, to abolish feudal remnants. The national movement of the European bourgeoisie is closely linked with the ascending phase of capitalism. But in the nineteenth century, in the period of the flowering of nationalisms, far from being “Zionist,” the Jewish bourgeoisie was profoundly assimilationist. The economic process from which the modern nations issued laid the foundations for integration of the Jewish bourgeoisie into the bourgeois nation.</p>
<p>It is only when the process of the formation of nations approaches its end, when the productive forces have for a long time found themselves constricted within national boundaries, that the process of expulsion of Jews from capitalist society begins to manifest itself, that modern anti-Semitism begins to develop. The elimination of Judaism accompanies the decline of capitalism. Far from being a product of the development of the productive forces, Zionism is precisely the consequence of the complete halt of this development, the result of the petrifaction of capitalism. Whereas the national movement is the product of the ascending period of capitalism, Zionism is the product of the imperialist era. The Jewish tragedy of the twentieth century is a direct consequence of the decline of capitalism.</p>
<p>Therein lies the principal obstacle to the realization of Zionism. <em>Capitalist decay – basis for the growth of Zionism – is also the cause of the impossibility of its realization.</em> The Jewish bourgeoisie is compelled to create a national state, to assure itself of the objective framework for the development of its productive forces, precisely in the period when the conditions for such a development have long since disappeared. The conditions of the decline of capitalism which have posed so sharply the Jewish question make its solution equally impossible along the Zionist road. And there is nothing astonishing in that. An evil cannot be suppressed without destroying its causes. But Zionism wishes to resolve the Jewish question without destroying capitalism, which is the principal source of the suffering of the Jews.</p>
<p>At the end of the nineteenth century in the period when the Jewish problem was just beginning to be posed in all its sharpness, 150,000 Jews each year left their countries of origin. Between 1881 and 1925, nearly four million Jews emigrated. Despite these enormous figures, the Jewish population of Eastern Europe rose from six to eight million.</p>
<p>Thus, even when capitalism was still developing, even when the countries across the ocean were still receiving immigrants, the Jewish question could not even begin to be resolved (in the Zionist sense); far from diminishing, the Jewish population showed a bad penchant of wanting to grow. In order to begin to resolve the Jewish question, that is to say, in order to begin really to transplant the Jewish masses, it would be necessary for the countries of immigration to absorb at least a little more than the natural growth of Jews in the Diaspora, that is at least three hundred thousand Jews per year. And if such a figure could not be reached before the first imperialist war, when all the conditions were still favorable for emigration, when all developed countries such as the United States were permitting the mass entry of immigrants, then how can we think that it is possible in the period of the continuous crisis of capitalism, in the period of almost incessant wars?</p>
<p>Naturally there are enough ships in the world to transport hundreds of thousands, even millions of Jews. But if all countries have closed their doors to immigrants, it is because there is an overproduction of labor forces just as there is an overproduction of commodities. Contrary to Malthus, who believed that there would be too many people because there would be too few goods, it is precisely the abundance of goods which is the cause of the “plethora” of human beings. By what miracle, in a period when the world markets are saturated with goods, in a period when unemployment has everywhere become a permanent fixture, by what miracle can a country, however great and rich it may be (we pass over the data relating to poor and small Palestine), develop its productive forces to the point of being able to welcome three hundred thousand immigrants each year? In reality the possibilities for Jewish emigration diminish at the same time that the need for it increases. The causes which promote the need for emigration are the same as those which prevent its realization; they all spring from the decline of capitalism.</p>
<p>It is from this fundamental contradiction between the <em>necessity for</em> and the <em>possibility of</em> emigration that the political difficulties of Zionism flow. The period of development of the European nations was also the period of an intensive colonization in the countries across the ocean. It was at the beginning and middle of the nineteenth century in the golden age of European nationalism, that North America was colonized; it was also in this period that South America and Australia began to be developed. Vast areas of the earth were practically without a master and lent themselves marvelously to the establishment of millions of European emigrants. In that period, for reasons that we have studied, the Jews gave almost no thought to emigrating.</p>
<p>Today the whole world is colonized, industrialized, and divided among the various imperialisms. Everywhere Jewish emigrants come into collision at one and the same time with the nationalism of the “natives” and with the ruling imperialism. In Palestine, Jewish nationalism collides with an increasingly aggressive Arab nationalism. The development of Palestine by Jewish immigration tends to increase the intensity of this Arab nationalism. The economic development of the country results in the growth of the Arab population, its social differentiation, the growth of a national capitalism. To overcome Arab resistance the Jews need English imperialism. But its “support” is as harmful as is Arab resistance. English imperialism views with a favorable eye a weak Jewish immigration to constitute a counterweight to the Arab factor, but it is intensely hostile to the establishment of a big Jewish population in Palestine, to its industrial development, to the growth of its proletariat. It merely uses the Jews as a counterweight to the Arab threat but does everything to raise difficulties for Jewish immigration. Thus, to the increasing difficulties flowing from Arab resistance, there is added the perfidious game of British imperialism.</p>
<p>Finally, we must draw still one more conclusion from the fundamental premises which have been established. Because of its necessarily artificial character, because of the slim perspectives for a rapid and normal development of Palestinian economy in our period, the task of Zionist colonization requires considerable capital. Zionism demands incessantly increasing sacrifices from the Jewish communities of the world. But so long as the situation of the Jews is more or less bearable in the Diaspora, no Jewish class feels the necessity of making these sacrifices. To the extent that the Jewish masses feel the necessity of having a “country,” to the extent also that persecutions mount in intensity, so much the less are the Jewish masses able to contribute to Zionist construction. “A strong Jewish people in the Diaspora is necessary for Palestinian reconstruction,” states Ruppin. But so long as the Jewish people is strong in the Diaspora, it feels no need for Palestinian reconstruction. When it strongly feels this necessity, the possibility for realizing it no longer exists. It would be difficult today to ask European Jews, who have a pressing need to emigrate, to give aid for the rebuilding of Palestine. The day when they will be able to do it, it is a safe assumption that their enthusiasm for this task will have considerably cooled.</p>
<p>A relative success for Zionism, along the lines of creating a Jewish majority in Palestine and even of the formation of a “Jewish state,” that is to say, a state placed under the complete domination of English or American imperialism, cannot, naturally, be excluded. This would in some ways be a return to the state of things which existed in Palestine before the destruction of Jerusalem and, from this point of view, there will be “reparation of a two-thousand-year-old injustice.” But this tiny “independent” Jewish state in the midst of a worldwide Diaspora will be only an apparent return to the state of things before the year 70. It will not even be the beginning of the solution of the Jewish question. The Jewish Diaspora of the Roman era was in effect based on solid economic ground; the Jews played an important economic role in the world. The existence or absence of a Palestinian mother country had for the Jews of this period only a secondary importance. Today it is not a question of giving the Jews a political or spiritual center (as Achaad Haam would have it). It is a question of saving Judaism from the annihilation which threatens it in the Diaspora. But in what way will the existence of a small Jewish state in Palestine change anything in the situation of the Polish or German Jews? Admitting even that all the Jews in the world were today Palestinian citizens, would the policy of Hitler have been any different?</p>
<p>One must be stricken with an incurable juridical cretinism to believe that the creation of a small Jewish state in Palestine can change anything at all in the situation of the Jews throughout the world, especially in the present period. The situation after the eventual creation of a Jewish state in Palestine will resemble the state of things that existed in the Roman era only in the fact that <em>in both cases the existence of a small Jewish state in Palestine could in no way influence the situation of the Jews in the Diaspora</em>. In the Roman era, the economic and social position of Judaism in the Diaspora was very strong, so that the disappearance of this Jewish state did not in any way compromise it. Today the situation of the Jews in the world is very bad; so the reestablishment of a Jewish state in Palestine cannot in any way restore it. In both cases the situation of the Jews does not at all depend on the existence of a state in Palestine but is a function of the general economic, social, and political situation. Even supposing that the Zionist dream is realized and the “secular injustice” is undone – and we are still very far from that – the situation of Judaism throughout the world will in no way be modified by that. The temple will perhaps be rebuilt but the faithful will continue to suffer.</p>
<p>The history of Zionism is the best illustration of the insurmountable difficulties that it encounters, difficulties resulting, in the last analysis, from the fundamental contradiction which tears it apart: the contradiction between the growing necessity of resolving the Jewish question and the growing impossibility of resolving it under the conditions of decaying capitalism. Immediately following the first imperialist war, Jewish emigration to Palestine encountered no great obstacles in its path. Despite that, there were relatively few immigrants; the economic conditions of capitalist countries after the war made the need to emigrate less pressing. It was, moreover, because of this light emigration that the British movement did not feel obliged to set up bars to the entry of Jews into Palestine. In the years 1924, 1925, 1926, the Polish bourgeoisie opened an economic offensive against the Jewish masses. These years are also the period of a very important immigration into Palestine. But this massive immigration soon collided with insurmountable economic difficulties. The ebb was almost as great as was the flood tide. Up to 1933, the date of Hitler’s arrival to power, immigration was of little importance. After this date, tens of thousands of Jews began to arrive in Palestine. But this “conjuncture” was soon arrested by a storm of anti-Jewish demonstrations and massacres. The Arabs seriously feared becoming a minority in the country. The Arab feudal elements feared being submerged by the capitalist wave. British imperialism profited from this tension by piling up obstacles to the entry of the Jews, by working to deepen the gulf existing between the Jews and the Arabs, by proposing the partition of Palestine. Up to the second imperialist war, Zionism thus found itself in the grip of mounting difficulties. The Palestinian population lived in a state of permanent terror. Precisely when the situation of the Jews became ever more desperate, Zionism showed itself absolutely incapable of providing a remedy. “Illegal” Jewish immigrants were greeted with rifle fire by their British “protectors.”</p>
<p>The Zionist illusion began to lose its attractiveness even in the eyes of the most uninformed. In Poland, the last elections revealed that the Jewish masses were turning completely away from Zionism. The Jewish masses began to understand that Zionism not only could not seriously improve their situation, but that it was furnishing weapons to the anti-Semites by its theories of the “objective necessity of Jewish emigration.” The imperialist war and the triumph of Hitlerism in Europe are an unprecedented disaster for Judaism. Judaism is confronted with the threat of total extinction. What can Zionism do to counteract such a disaster? Is it not obvious that the Jewish question is very little dependent upon the future destiny of Tel Aviv but very greatly upon the regime which will be set up tomorrow in Europe and in the world? The Zionists have a great deal of faith in a victory of Anglo-American imperialism. But is there a single reason for believing that the attitude of the Anglo-American imperialists will differ after their eventual victory from their prewar attitude? It is obvious that there is none. Even admitting that Anglo-American imperialism will create some kind of abortive Jewish state, we have seen that the situation of world Judaism will hardly be affected. A great Jewish immigration into Palestine after this war will confront the same difficulties as previously. Under conditions of capitalist decay, it is impossible to transplant millions of Jews. Only a worldwide socialist planned economy would be capable of such a miracle. Naturally this presupposes the proletarian revolution.</p>
<p>But Zionism wishes precisely to resolve the Jewish question independently of the world revolution. By misconstruing the real sources of the Jewish question in our period, by lulling itself with puerile dreams and silly hopes, Zionism proves that it is an ideological excrescence and not a scientific doctrine. <a href="#n16" name="f16">[16]</a></p>
<p> </p>
<h3>Notes</h3>
<p class="information"><a href="#f1" name="n1">1.</a> Congrès Juif Mondial, <strong>op. cit.</strong>, pp. 246–47.</p>
<p class="information"><a href="#f2" name="n2">2.</a> <strong>Ibid.</strong>, p. 249.</p>
<p class="information"><a href="#f3" name="n3">3.</a> <strong>Ibid.</strong>, p. 249.</p>
<p class="information"><a href="#f4" name="n4">4.</a> <strong>Yiddishe Economic</strong> (September–October 1938), p. 437.</p>
<p class="information"><a href="#f5" name="n5">5.</a> At Warsaw in 1882, 79.3 percent of businessmen were Jews; in 1931, 51.4 percent of the businessmen were Jews. Jacob Lestschinsky, <strong>Der Wirtschaftliche Zusammenbruch der Juden in Deutschland u. Polen</strong> (Paris 1938), p. 48.</p>
<p class="information"><a href="#f6" name="n6">6.</a> In the period when Jewish and non-Jewish petty-bourgeois intellectuals represent Hitler as the sole responsible party for anti-Semitism in our time, in the period when the United Nations, among them Poland, lay claim to being defenders of the “rights of man” – recalling this fact will most certainly not be devoid of usefulness. Of course Hitler organized, in a premeditated way, the destruction of European Judaism, and personified capitalist barbarism in this sphere as in others. But the various more or less “democratic” governments which followed each other in Poland could not have learned very much from him. The disappearance of Hitler can change nothing fundamental in the situation of the Jews. A transitory improvement of their condition will in no wise alter the profound roots of twentieth-century anti-Semitism.</p>
<p class="information"><a href="#f7" name="n7">7.</a> Congrès Juif Mondial, <strong>op. cit.</strong>, pp. 120–121.</p>
<p class="information"><a href="#f8" name="n8">8.</a> <strong>Ibid.</strong>, p. 254.</p>
<p class="information"><a href="#f9" name="n9">9.</a> <strong>Yiddishe Economic</strong> (July–August 1938), p. 353.</p>
<p class="information"><a href="#f10" name="n10">10.</a> <em>Engels to Mehring</em>, <strong>Selected Correspondence of Marx and Engels</strong> (New York 1942), p. 511.</p>
<p class="information"><a href="#f11" name="n11">11.</a> See the Proudhon Utopia of free credit.</p>
<p class="information"><a href="#f12" name="n12">12.</a> Hans Günther, <strong>Rassenkunde des Jüdischen Volkes</strong> (Munich 1930), p. 191.</p>
<p class="information"><a href="#f13" name="n13">13.</a> <strong>Materialism and the National Question</strong>.</p>
<p class="information"><a href="#f14" name="n14">14.</a> There is a religious Zionist bourgeois party, <em>Misrakhi</em>, and a religious Zionist workers party, <em>Poale-Misrakhi</em>.</p>
<p class="information"><a href="#f15" name="n15">15.</a> Adolf Böhm, <strong>Die Zionistische Bewegung</strong> (Berlin 1935), vol. 1, chapter 3.</p>
<p class="information"><a href="#f16" name="n16">16.</a> In this chapter, Zionism has been treated only insofar as it is linked with the Jewish question. The role of Zionism in Palestine naturally constitutes another problem.</p>
<p> </p>
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<p class="updat">Last updated: 19 August 2020</p>
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Abram Leon
The Jewish Question
SEVEN
The decay of capitalism and the tragedy of the Jews in the 20th century
The primary merit of the capitalist regime lay in its tremendous expansion of the productive forces, its creation of a world economy, its permitting an unprecedented development of technology and science. As against the stagnation of the feudal world, capitalism presented an unparalleled dynamism. Hundreds of millions of people, immobilized up to then in a routinized, horizonless existence, suddenly found themselves drawn into the current of a feverish and intensive life.
The Jews lived within the pores of feudal society. When the feudal structure started to crumble, it began expelling elements which were, at one and the same time, foreign to it and indispensable to it. Even before the peasant had left the village for the industrial center, the Jew had abandoned the small medieval town in order to emigrate to the great cities of the world. The destruction of the secular function of Judaism within feudal society is accompanied by its passive penetration into capitalist society.
But if capitalism has given humanity certain tremendous conquests, only its disappearance can allow humanity to enjoy them. Only socialism will be able to lift humanity to the level of the material bases of civilization. But capitalism survives and all the enormous acquisitions turn more and more against the most elementary interests of humanity.
The progress of technology and science has become the progress of the science of death and its technology. The development of the means of production is nothing but the growth of the means of destruction. The world, become too small for the productive apparatus built up by capitalism, is constricted even further by the desperate efforts of each imperialism to extend its sphere of influence. While unbridled export constitutes an inseparable phenomenon of the capitalist mode of production, decaying capitalism tries to get along without it, that is to say, it adds to its disorders the disorder of its own suppression.
Powerful barriers impede the free circulation of merchandise and men. Insurmountable obstacles arise before the masses deprived of work and bread following the breakdown of the traditional feudal world. The decay of capitalism has not only accelerated the decomposition of feudal society but has multiplied a hundredfold the sufferings which resulted from it. The bearers of civilization, in a blind alley, bar the road to those who wish to become civilized. Unable to attain civilization, the latter are still less able to remain in the stage of barbarism. To the peoples whose traditional bases of existence it has destroyed, capitalism bars the road of the future after having closed the road of the past.
It is with these general phenomena that the Jewish tragedy of the twentieth century is tied up. The highly tragic situation of Judaism in our epoch is explained by the extreme precariousness of its social and economic position. The first to be eliminated by decaying feudalism, the Jews were also the first to be rejected by the convulsions of dying capitalism. The Jewish masses find themselves wedged between the anvil of decaying feudalism and the hammer of rotting capitalism.
A. The Jews in Eastern Europe
The entire situation of Judaism in Eastern Europe is explained by the combination of the decline of the old feudal forms and of the degeneration of capitalism. The social differentiation which took place in the village as a result of capitalist penetration brought about an influx into the cities of enriched as well as proletarianized peasants; the former wanted to invest their capital; the latter to offer their labor. But the openings for the placement of capital were as slight as those for work. Hardly born, the capitalist system already showed all the symptoms of senility. The general decay of capitalism manifested itself in crises and unemployment within the countries of Eastern Europe; by the closing of all the outlets for emigration outside their frontiers. Seven to eight million peasants were landless and almost without work in “independent” Poland. Placed between two fires, the Jews were exposed to the hostility of the petty bourgeoisie and the peasantry; who sought to find a place for themselves at the expense of the Jews. “Jewish positions are particularly threatened by the urban Polish bourgeoisie and by the rich peasants who seek a solution for their difficulties through a fierce economic nationalism, whereas the Polish working class suffering from permanent unemployment, seeks a remedy for its poverty through social liberation and puts its reliance upon economic and political solidarity rather than upon a sterile and murderous competition ....” [1]
It is precisely in the regions which capitalism had most developed that a non-Jewish commercial class formed most rapidly. It is there that the anti-Semitic struggle was fiercest. “The decrease in the number of Jewish shops has been greatest in the central provinces, that is to say, in a region where the population is purely Polish, where the peasants have attained a higher standard of living, where industry is more developed, which is very important for the material and intellectual situation of the village.” [2]
Whereas in 1914, 72 percent of the stores in the villages were Jewish, this fell to 34 percent in 1935, that is to say, by more than one-half. The situation was better for the Jews in territories less developed economically. “The participation of Jews in commerce is more important in the most backward provinces,” maintains Lipovski. “The eastern sections belonging to White Russians are, in all their relations – economic, intellectual, and political – the most backward part of Poland. In these regions, the absolute majority of Jewish businessmen has increased by a third.” [3] In 1938, 82.6 percent of the shops in the backward regions of Poland were in the hands of Jews. [4]
All of these facts are further proof that the destruction of feudalism is at the bottom of the Jewish question in Eastern Europe. The more backward a region is, the more easily are the Jews able to preserve their secular positions. But it is the general decay of capitalism which renders the Jewish question impossible of solution. The crisis and chronic unemployment make it impossible for the Jews to go into other professions, producing a frightful crowding in the professions which they follow and unceasingly augmenting anti-Semitic violence. The governments of the provincial nobles and large capitalists naturally endeavored to organize the anti-Jewish current and thereby divert the masses from their real enemy. “Resolve the Jewish question” became for them a synonym for the solution of the social question. In order to make place for the “national forces,” the state organized a systematic struggle for “dejudifying” all the professions. The methods of “Polanizing” business in Poland proceeded from simple boycotting of Jewish stores by means of propaganda, right up to pogroms and incendiarism. Here, by way of example, is a “victory bulletin” published June 14, 1936, in the governmental paper Illustrowany Kurjer codztienny: “One hundred and sixty Polish business positions were conquered during the first months of this year in the Madom district. At Przktyk alone – a notorious pogrom city – 50 business licenses were purchased by Poles. All in all, 2,500 Polish business positions were conquered in the various districts.” [5]
Jewish craftsmanship was no more tenderly handled by the Polish governments. Boycott, exorbitant taxes, Polish examinations (thousands of Jewish craftsmen did not know this language), contributed to grinding down the Jewish artisans. Deprived of unemployment relief, the craft proletariat was one of the most disinherited. The wages of Jewish workers were very low and their living conditions frightful (workday up to eighteen hours).
The universities constituted the favorite arena for the anti-Semitic struggle. The Polish bourgeoisie exerted all its efforts to prevent Jews from entering the intellectual professions. The Polish universities became places of veritable pogroms, throwing people out of windows, etc. Well before Hitler’s stars of David, the Polish bourgeoisie initiated ghetto benches in the umversities. “Legal” measures, more circumspect but no less effective, rendered entry into the universities almost impossible for the Jewish youth, whose ancestral heritage had strongly developed their intellectual faculties. The percentage of Jewish students in Poland declined from 24.5 percent in 1923–33 to 13.2 percent in 1933–36. [6]
The same policy of excluding Jewish students was followed in Lithuania and Hungary. The percentage of Jewish students in Lithuania declined from 15.7 percent in 1920 to 8.5 percent in 1931; in Hungary, from 31.7 percent in 1918 to 10.5 percent in 1931. In general the situation of the Jews in Hungary had for centuries resembled in every way that of Poland.
In the country of great feudal magnates, the Jews for a long time played the role of an intermediary class between the lords and the peasants.
“One of our correspondents reminds us that at the end of the nineteenth century; a certain Count de Palugyay had great trouble in avoiding expulsion from the National Club of the Hungarian nobility at Budapest, because he wanted to take charge personally of the industrial transformation of his agricultural products, particularly the distillation of alcohol and whiskey from potatoes; he had even gone so far as to take charge of their sale!
“The liberal professions were likewise not unaffected by this prejudice, which was as widespread among the high aristocracy as among the petty nobility. Shortly before the fall of the dual monarchy, a Hungarian magnate expressed his disgust of noblemen, who ‘for money, examined the throats of individuals whom they did not know.’ A natural consequence of this attitude was that the Jews formed the intermediary class between the peasantry and the nobility, particularly in the towns ... Trade, and especially petty trade, was a Jewish matter in the eyes of the people.
“Even today, in the minds of the masses of the Magyar population, the shop, and in a general way everything connected with the exploitation of the shop, are thought of as Jewish, even if this shop has become an instrument of economic struggle against the Jews.
“Here is a story which strikingly illustrates this state of mind: A peasant woman sent her son on some purchasing errands. She wanted them taken care of at the semistateized Hangya cooperative and not at a Jewish shop, so she said to him: ‘Pista, go to the Jew; not to the Jew who is a Jew, but to the new shop.’ ” [7]
The process of elimination of the Jews from their economic positions took place in all of Eastern Europe. The situation of the Jewish masses became hopeless. A declassed youth, having no possibility of integrating itself into economic life, lived in black despair. Prior to the second war, 40 percent of the Jewish population of Poland had to resort to philanthropic institutions. Tuberculosis raged.
“Let us give the floor to correspondents of the Economic and Statistical Section of the Jewish Scientific Institute residing in regions where despair and the complete absence of a better future were stifling the Jewish youth. Here is what one wrote of Miedzyrzecze, province of Volhynia: ‘The condition of the Jewish youth is very difficult, notably that of the sons and daughters of tradesmen who are without work because their parents do not require assistance. It is impossible to open new businesses. Seventy-five boys and 120 young girls, aged 15 to 28 years, have no hope whatever of integrating themselves into the economic life of the country.’ Of Sulejow (province of Lodz) we are in possession of a more detailed picture, which is characteristic of the small towns of Poland: ‘Almost 50 percent of the children of Jewish businesspeople work with their parents, but solely because they are unable to find another job. Twenty-five percent are learning some sort of trade and 25 percent are completely idle. Seventy percent of the children of artisans remain in the workshops of their parents even though the latter are almost without work and can very well get along without assistants. Ten percent are learning new trades ... twenty percent have nothing to do. The sons of rabbis and of employees of Jewish communities are trying to attain a livelihood by learning a trade. The entire youth desires to emigrate, 90 percent to Palestine, but because of the limited number of emigration visas, their chances are slim. And yet they are ready to go to the North Pole or the South Pole, just so long as they can tear themselves out of this stagnation. More and more the youth is turning towards the crafts and the number of young people in business is on the decline.’ ” [8]
B. The Jews in Western Europe
The condition of Judaism, rendered hopeless in Eastern Europe by the combined decay of feudalism and capitalism – which created a stifling atmosphere filled with insane antagonisms – had repercussions of a certain worldwide character. Western and Central Europe became the theater of a frightful rise of anti-Semitism. Whereas the reduction in Jewish emigration, whose average annual rate declined from 155,000 between 1901 and 1914 to 43,657 between 1926 and 1935, greatly aggravated the situation of the Jews in Eastern Europe, the general crisis of capitalism made even this reduced emigration an intolerable burden to the Western countries. [9]
The Jewish question reached unprecedented sharpness not only in the countries of emigration but in the countries of immigration as well. Even before the first imperialist war, the mass arrival of Jewish immigrants created a strong anti-Semitic movement among the middle classes of several Central and Western European countries. We need only recall the great successes of the anti-Semitic Social Christian Party at Vienna and of its leader, Lueger; the sweeping rise of anti-Semitism in Germany (Treitschke), and the Dreyfus Affair. Anti-Semitism showed its roots most clearly in Vienna, one of the great centers of Jewish immigration before the first imperialist war. The petty bourgeoisie, ruined by the development of monopoly capitalism and headed for proletarianization, was exasperated by the mass arrival of the Jewish element, traditionally petty-bourgeois and artisan.
After the first imperialist war, the countries of Western and Central Europe: Germany, Austria, France, and Belgium, saw tens of thousands of Jewish immigrants, in tatters, lacking all resources, pour in from Eastern Europe. The seeming postwar prosperity permitted these elements to penetrate into all branches of business and artisanry. But even the Jewish immigrants who had penetrated into the plants did not remain there for long.
The long commercial past of the Jews weighed heavily on their descendants and the favorable postwar economic conditions brought about a perceptible process of deproletarianization in Western Europe as well as in the United States. The Jewish workers retained their artisan position in the countries of immigration. In Paris in 1936 out of 21,083 Jewish workers belonging to trade unions, 9,253 worked at home.
The economic catastrophe of 1929 threw the petty-bourgeois masses into a hopeless situation. The overcrowding in small business, artisanry and the intellectual professions took on unheard of proportions. The petty bourgeois regarded his Jewish competitor with growing hostility; for the latter’s professional cleverness, the result of centuries of practice, often enabled him to survive hard times more easily. Anti-Semitism even gained the ear of wide layers of worker-artisans, who traditionally had been under petty-bourgeois influence.
It is consequently incorrect to accuse big business of having brought about anti-Semitism. Big business only proceeded to make use of the elementary anti-Semitism of the petty-bourgeois masses. It fashioned it into a major component of fascist ideology. By the myth of “Jewish capitalism,” big business endeavored to divert and control the anticapitalist hatred of the masses for its own exclusive profit. The real possibility of an agitation against Jewish capitalists lay in the antagonism between monopoly capital and speculative-commercial capital, which Jewish capital was in the main. The relatively greater permeability of speculative capital (stock exchange scandal) allowed monopoly capital to channel the hatred of the petty-bourgeois masses and even of a part of the workers against “Jewish capitalism.”
C. Racism
“Ideology is a process accomplished by the so-called thinker consciously, indeed, but with a false consciousness. The real motives impelling him remain unknown to him, otherwise it would not be an ideological process at all. Hence he imagines false or apparent motive forces.” [10]
Up to now we have tried to understand the real bases of anti-Semitism in our time. But it is sufficient to consider the role played in the development of anti-Semitism by the wretched document fabricated by the Tsarist Okhrana, The Protocols of Zion, to become aware of the importance of the “false or apparent motive forces” of anti-Semitism. In Hitlerite propaganda today, the real motivation of anti-Semitism in Western Europe – the economic competition of the petty bourgeoisie – no longer plays any role. On the contrary; the most fantastic allegations of The Protocols of Zion – the plans of universal domination by international Judaism – reappear in every speech and manifesto of Hitler. We must therefore analyze this mythical ideological element of anti-Semitism.
Religion constitutes the most characteristic example of an ideology. Its true motive forces must be sought in the very prosaic domain of the material interests of a class, but it is in the most ethereal spheres that its apparent motive forces are found. Nevertheless, the God who launched the Puritan fanatics of Cromwell against the English aristocracy and Charles I was nothing but the reflection or symbol of the interests of the English peasantry and bourgeoisie. Every religious revolution is in reality a social revolution.
It is the unbridled development of the productive forces colliding against the narrow limits of consumption which constitute the true motive force of imperialism, the highest stage of capitalism. But it is the “race” which seems to be its most characteristic apparent force. Racism is therefore in the first place the ideological disguise of modern imperialism. The “race struggling for its living space” is nothing but the reflection of the permanent necessity for expansion which characterizes finance or monopoly capitalism.
While the fundamental contradiction of capitalism, the contradiction between production and consumption, involves for the big bourgeoisie the necessity to struggle for the conquest of foreign markets, it compels the petty bourgeoisie to struggle for the expansion of the domestic market. The lack of foreign markets for the big capitalists proceeds hand in hand with the lack of domestic markets for the small capitalists. Whereas the big bourgeoisie struggles furiously against its competitors on the foreign market, the petty bourgeoisie combats its competitors on the domestic market not a whit less fiercely. “Racism” abroad is consequently accompanied by “racism” at home. The unprecedented aggravation of capitalist contradictions in the twentieth century brings with it a growing exacerbation of “racism” abroad as well as “racism” at home.
The primarily commercial and artisan character of Judaism, heritage of a long historical past, makes it Enemy Number One of the petty bourgeoisie on the domestic market. It is therefore the petty-bourgeois character of Judaism which makes it so odious to the petty bourgeoisie. But while the historical past of Judaism exercises a determining influence on its present social composition, it has effects no less important on the representation of the Jews in the consciousness of the popular masses. For the latter, the Jew remains the traditional representative of the “money power.”
This fact is of great importance because the petty bourgeoisie is not only a “capitalist” class, that is to say, a repository “in miniature” of all capitalist tendencies; it is also “anticapitalist.” It has a strong, though vague, consciousness of being ruined and despoiled by big business. But its hybrid character, its interclass position, does not permit it to understand the true structure of society nor the real character of big business. It is incapable of understanding the true tendencies of social evolution, for it has a presentiment that this evolution cannot help but be fatal for it. It wants to be anticapitalist without ceasing to be capitalist. It wants to destroy the “bad” character of capitalism, that is to say, the tendencies which are ruining it, while preserving the “good” character of capitalism which permits it to live and get rich. But since there does not exist a capitalism which has the “good” tendencies without also possessing the “bad,” the petty bourgeoisie is forced to dream it up. It is no accident that the petty bourgeoisie has invented “supercapitalism,” the “bad” deviation of capitalism, its evil spirit. It is no accident that its theoreticians have struggled mightily for over a century (Proudhon) against “bad speculative capitalism” and defended “useful productive capitalism.” [11] The attempt of Nazi theoreticians to distinguish between “national productive capital” and “Jewish parasitic capital” is probably the last attempt of this kind. “Jewish capitalism” can best represent the myth of “bad capitalism.” The concept of “Jewish wealth” is in truth solidly entrenched in the consciousness of the popular masses. It is only a question of reawakening and giving “presence,” by means of a well-orchestrated propaganda, to the image of the “usurious” Jew, against whom peasant, petty bourgeois, and lord had struggled over a long period. The petty bourgeoisie and a layer of workers remaining under its sway are easily influenced by such propaganda and fall into this trap of “Jewish capitalism.”
Historically, the success of racism means that capitalism has managed to channel the anticapitalist consciousness of the masses into a form that antedates capitalism and which no longer exists except in a vestigial state; this vestige is nevertheless still sufficiently great to give a certain appearance of reality to the myth.
We see that racism is made up of rather strange elements. It reflects the expansionist will of big capital. It expresses the hatred of the petty bourgeoisie for “foreign” elements within the domestic market as well as its anticapitalist tendencies.
It is in its aspect as a capitalist element that the petty bourgeoisie fights its Jewish competitor, and in its capitalist aspect that it struggles against “Jewish capital.” Racism finally diverts the anticapitalist struggle of the masses into a form that antedates capitalism, persisting only in a vestigial state.
But while scientific analysis permits us to reveal its component parts, racist ideology must appear as an absolutely homogeneous “doctrine.” Racism serves precisely to cast all classes into the crucible of a “racial community” opposed to other races. The racist myth strives to appear as a whole, having only vague connections with its origins which are often very different. It endeavors to fuse its different elements together in perfect fashion.
Thus, for example, “foreign” racism, the ideological disguise of imperialism, is not compelled, in and of itself, to adopt a strong anti-Semitic coloration. But from the necessity of synchronization, it generally does take on this character. The anticapitalism of the masses, first channeled in the direction of Judaism, is then carried over against the “foreign enemy,” which is identified with Judaism. The “Germanic race” will find itself faced with the duty of fighting the “Jew,” its principal enemy, in all his disguises: that of domestic Bolshevism and liberalism, of Anglo-Saxon plutocracy and of foreign Bolshevism. Hitler states in Mein Kampf that it is indispensable to present the various enemies under a common aspect, otherwise there is a danger that the masses will start thinking too much about the differences which exist among those enemies. That is why racism is a myth and not a doctrine. It demands faith, and fears reason like the plague. Anti-Semitism contributes most to cementing the different elements of racism.
Just as it is necessary to cast the different classes into one single race, so is it also necessary that this “race” have only a single enemy: “the international Jew.” The myth of race is necessarily accompanied by its “negative” – the antirace, the Jew. The racial “community” is built on hatred of the Jews, a hatred of which the most solid “racial” foundation is buried in history in a period when the Jew was in effect a foreign body and hostile to all classes. The irony of history wills that the most radical anti-Semitic ideology in all history should triumph precisely in the period when Judaism is on the road of economic and social assimilation. But like all “ironies of history” this seeming paradox is very understandable. At the time when the Jew was unassimilable, at a time when he really represented “capital,” he was indispensable to society. There could be no question of destroying him. At the present time, capitalist society, on the edge of the abyss, tries to save itself by resurrecting the Jew and the hatred of the Jews. But it is precisely because the Jews do not play the role which is attributed to them that anti-Semitic persecution can take on such an amplitude. Jewish capitalism is a myth; that is why it is so easily vanquished. But in vanquishing its “negative,” racism at the same time destroys the foundations for its own existence. In the measure that the phantom of “Jewish capitalism” disappears, capitalist reality appears in all its ugliness. The social contradictions, banished for a moment by the fumes of “racial” intoxication, reappear in all their sharpness. In the long run, the myth proves powerless against reality.
Despite its apparent homogeneity, the very evolution of racism allows to be clearly discerned the economic, social, and political transformations that it strives to conceal. At the beginning, in order to arm itself for the struggle for its “living space,” for imperialist war, big business must beat down its domestic enemy, the proletariat. It is the petty bourgeoisie and declassed proletarian elements that furnish it with its shock troops, capable of smashing the economic and political organizations of the proletariat. Racism, at the beginning, appears therefore as an ideology of the petty bourgeoisie. Its program reflects the interests and illusions of this class. It promises struggle against “supercapitalism,” against the trusts, stock exchange, big department stores, etc. But as soon as big business has succeeded in smashing the proletariat, thanks to the support of the petty bourgeoisie, the latter becomes an unbearable burden to it. The program of preparation for war implies precisely the ruthless elimination of small business, a prodigious development of the trusts, an intensive proletarianization. This same military preparation necessitates the support or at least a kind of neutrality from the proletariat, the most important factor in production. Thus big business does not hesitate for a moment to violate its most solemn promises in the most cynical way and to strangle the petty bourgeoisie in the most brutal fashion. Racism now devotes itself to flattering the proletariat, to appearing as a radically “socialist” movement. It is here that the Judaist-capitalist identification plays its most important role. The radical expropriation of Jewish capitalists has to fulfill the role of “collateral,” of “endorser” of racism’s anticapitalist will to struggle. The anonymous character of the capitalism of the monopolies, in contrast to the generally personal (and often speculative commercial) character of Jewish businesses, facilitates this operation of spiritual swindling. The common man more readily sees the “real” capitalist, the businessman, the manufacturer, the speculator, than the “respectable” director of a corporation who is made to pass as an “indispensable” factor in production. It is in this way that racist ideology reaches the following identifications: Judaism = capitalism; racism = socialism; a regulated war economy = a planned socialist economy.
It is undeniable that large layers of workers, deprived of their organizations, blinded by the foreign political successes of Hitler, have allowed themselves to be taken in by racist mythology, just as was the case previously with the petty bourgeoisie. For the time being the bourgeoisie appears to have attained its objective. The furious anti-Jewish persecution extending throughout Europe serves to indicate the “definitive” victory of racism, the final defeat of “international Judaism.”
D. The Jewish Race
The racial “theory” now dominant is nothing but an attempt to establish racism “on a scientific basis.” It is devoid of any scientific value. It is enough to observe the pitiful acrobatics which the racist theoreticians perform to demonstrate the relationship of the “Germans and the Nipponese” or the irrevocable antagonism between “the heroic German spirit” and the “commercial Anglo-Saxon spirit” in order to be completely convinced of this. The ramblings of a Montadon on “deprostituting” the Jewish “ethnic entity” by ... compelling the Jews to wear stars of David, are certainly not worth much. The real prostitution of certain “scholars” to racism presents an unusual spectacle of the decline of human dignity. But we see there only an end product of the complete decay of bourgeois science which had already, under democracy, lost its objectivity.
Racist stupidities must not however deter us from examining the extent to which it is necessary to speak of a Jewish race. The most superficial examination of the question leads us to the conclusion that the Jews constitute in reality a mixture of the most diverse races. It is evidently the Diaspora character of Judaism which is the fundamental cause of this fact. But even in Palestine, the Jews were far from constituting a “pure race.” Leaving aside the fact that, according to the Bible, the Israelites brought a mass of Egyptians with them when they left Egypt and that Strabo considered them as descendants of Egyptians, it is enough to recall the numerous races which had established themselves in Palestine: Hittites, Canaanites, Philistines (“Aryans”), Egyptians, Phoenicians, Greeks, and Arabs. According to Strabo, Judea was inhabited by Phoenicians, Egyptians, and Arabs. The development of Jewish proselytism during the Greek and Roman era strongly accentuated the mixed character of Judaism. As early as 139 B.C., the Jews were driven out of Rome for having made proselytes there. The community of Antioch was composed in large part of proselytes. Proselytism continued even during subsequent eras. The compulsory conversion of slaves to Judaism, the conversion of the Khazars as well as of other races and tribes in the course of the long Diaspora, have been so many factors which have made a characteristic conglomeration of races out of Judaism.
At the present time there is absolutely no racial homogeneity between the Yemenite Jews, for example, and the Jews of Dagestan. The first are Oriental in type while the second belong to the Mongol race. There are black Jews in India, Ethiopian Jews (Falasha), “Troglodyte” Jews in Africa. However, this fundamental difference which exists, for example, between the Jews of Dagestan and the Yemenite Jews, does not exhaust the question. Actually nine-tenths of today’s Jews are inhabitants of Eastern Europe or descendants of Jews from this area.
Is there a European-Oriental Jewish race? Here is how the anti-Semitic theoretician, Hans Gunther, answers this question: “Eastern Judaism, which comprised close to nine-tenths of the Jews, consisting today of the Jews of Russia, Poland, Galicia, Hungary Austria, and Germany, as well as the largest part of the Jews in North America and a large part of Western European Jewry constitutes a racial mixture which we may designate as Western Asiatic-Oriental-East Baltic-Eastern-Central Asiatic-Nordic-Hamitic-Negroid.” [12]
According to research undertaken in NewYork of 4,235 Jews there were:
JEWS
(PERCENT)
JEWESSES
(PERCENT)
BRUNET TYPES
52.62
56.94
BLOND TYPES
10.42
10.27
MIXED TYPES
36.96
32.79
14.25 percent of Jews and 12.7 percent of Jewesses had what is called the Jewish nose, which is nothing else but the nose common to the peoples of Asia Minor, especially widespread among the Armenians. This nose is also common among the Mediterranean peoples as well as among the Bavarians (Dinaric race). These few observations permit us to see how stupid the concept of the “Jewish race” is. The Jewish race is a myth. On the other hand, it is correct to say that the Jews constitute a racial mixture that is different from the racial mixtures of most of the European peoples, especially the Slavs and Germans.
However, it is not so much the anthropological characteristics of the Jews which distinguish them from other peoples as their physiological, pathological, and, above all, psychological characteristics.
It is primarily the economic and social function of Judaism throughout history which explains this phenomenon. For centuries the Jews were the inhabitants of cities, occupied in trade. The Jewish type is far more the result of this secular function than a racial characteristic. The Jews have absorbed a mass of heterogeneous racial elements but all these elements have been subjected to the influence of the special conditions in which the Jews lived, which, in the long run, ended up with the creation of the so-called “Jewish type.” This is the result of a long selection, not racial but economic and social. The physical weakness, the frequency of certain illnesses like diabetes, nervous disorders, a specific body posture, etc., are not racial characteristics but are the result of a specific social position. Nothing is more ridiculous than to explain, for example, the Jews’ penchant for trade or their tendency to abstract thinking on the basis of their race. Wherever the Jews are assimilated economically, wherever they cease to form a class, they rapidly lose all these characteristics. And so it happens that where the racist theoreticians thought they were face to face with a “genuine race,” they were in reality only viewing a human community, whose specific characteristics are above all the result of the social conditions in which it lived for many centuries. A change in these social conditions must naturally bring with it the disappearance of the “racial characteristics” of Judaism.
E. Zionism
Zionism was born in the light of the incendiary fires of the Russian pogroms of 1882 and in the tumult of the Dreyfus Affair – two events which expressed the sharpness that the Jewish problem began to assume at the end of the nineteenth century.
The rapid capitalist development of Russian economy after the reform of 1863 made the situation of the Jewish masses in the small towns untenable. In the West, the middle classes, shattered by capitalist concentration, began to turn against the Jewish element whose competition aggravated their situation. In Russia, the association of the “Lovers of Zion” was founded. Leo Pinsker wrote Auto-emancipation, in which he called for a return to Palestine as the sole possible solution of the Jewish question. In Paris, Baron Rothschild, who like all the Jewish magnates viewed with very little favor the mass arrival of Jewish immigrants in the Western countries, became interested in Jewish colonization in Palestine. To help “their unfortunate brothers” to return to the land of their “ancestors,” that is to say, to go as far away as possible, contained nothing displeasing to the Jewish bourgeoisie of the West, who with reason feared the rise of anti-Semitism. A short while after the publication of Leo Pinsker’s book, a Jewish journalist of Budapest, Theodor Herzl, saw anti-Semitic demonstrations at Paris provoked by the Dreyfus Affair. Soon he wrote The Jewish State, which to this day remains the bible of the Zionist movement. From its inception, Zionism appeared as a reaction of the Jewish petty bourgeoisie (which still forms the core of Judaism), hard hit by the mounting anti-Semitic wave, kicked from one country to another, and striving to attain the Promised Land where it might find shelter from the tempests sweeping the modern world.
Zionism is thus a very young movement; it is the youngest of the European national movements. That does not prevent it from pretending, even more than all other nationalism, that it draws its substance from a far distant past. Whereas Zionism is in fact the product of the last phase of capitalism, of capitalism beginning to decay, it pretends to draw its origin from a past more than two thousand years old. Whereas Zionism is essentially a reaction against the situation created for Judaism by the combination of the destruction of feudalism and the decay of capitalism, it affirms that it constitutes a reaction against the state of things existing since the fall of Jerusalem in the year 70 of the Christian era. Its recent birth is naturally the best reply to these pretensions. As a matter of fact, how can one believe that the remedy for an evil existing for two thousand years was discovered only at the end of the nineteenth century? But like all nationalisms – and even more intensely – Zionism views the historic past in the light of the present. In this way, too, it distorts the present-day picture. Just as France is represented to French children as existing since the Gaul of Vercingetorix, just as the children of Provence are told that the victories that the kings of Ile de France won over their ancestors were their own successes, in the same way Zionism tries to create the myth of an eternal Judaism, eternally the prey of the same persecutions. Zionism sees in the fall of Jerusalem the cause of the dispersion, and consequently, the fountainhead of all Jewish misfortunes of the past, present, and future. “The source of all the misfortunes of the Jewish people is the loss of its historic country and its dispersion in all countries,” declares the Marxist delegation of the Poale-Zion to the Dutch-Scandinavian committee. After the violent dispersion of the Jews by the Romans, their tragic history continues. Driven out of their country, the Jews did not wish (oh beauty of free will!) to assimilate. Imbued with their “national cohesiveness,” “with a superior ethical feeling,” and with “an indestructible belief in a single God” (see the article of Ben-Adir on Anti-Semitism in the General Encyclopedia), they have resisted all attempts at assimilation. Their sole hope during these somber days which lasted two thousand years has been the vision of a return to their ancient country.
Zionism has never seriously posed this question: Why, during these two thousand years, have not the Jews really tried to return to this country? Why was it necessary to wait until the end of the nineteenth century for a Herzl to succeed in convincing them of this necessity? Why were all the predecessors of Herzl, like the famous Sabbatai Zebi, treated as false Messiahs? Why were the adherents of Sabbatai Zebi fiercely persecuted by orthodox Judaism?
Naturally, in replying to these interesting questions, refuge is sought behind religion. “As long as the masses believed that they had to remain in the Diaspora until the advent of the Messiah, they had to suffer in silence,” states Zitlovski [13], whose Zionism is moreover quite conditional. Nevertheless this explanation tells us nothing. What is required is precisely an answer to the question of why the Jewish masses believed that they had to await the Messiah in order to be able to “return to their country.” Religion being an ideological reflection of social interests, it must perforce correspond to them. Today religion does not at all constitute an obstacle to Zionism. [14]
In reality just so long as Judaism was incorporated in the feudal system, the “dream of Zion” was nothing but a dream and did not correspond to any real interest of Judaism. The Jewish tavern owner or “farmer” of sixteenth-century Poland thought as little of “returning” to Palestine as does the Jewish millionaire in America today. Jewish religious Messianism was no whit different from the Messianism belonging to other religions. Jewish pilgrims who went to Palestine met Catholic, Orthodox, and Moslem pilgrims. Besides it was not so much the “return to Palestine” which constituted the foundation of this Messianism as the belief in the rebuilding of the temple of Jerusalem.
All of these idealist conceptions of Zionism are naturally inseparable from the dogma of eternal anti-Semitism. “As long as the Jews will live in the Diaspora, they will be hated by the natives.” This essential point of view for Zionism, its spinal column so to speak, is naturally given different nuances by its various currents. Zionism transposes modern anti-Semitism to all of history; it saves itself the trouble of studying the various forms of anti-Semitism and their evolution. However, we have seen that in different historical periods, Judaism made up part of the possessing classes and was treated as such. To sum up [the idealist conception], the sources of Zionism must be sought in the impossibility of assimilation because of “eternal anti-Semitism” and of the will to safeguard the “treasures of Judaism.” [15]
In reality, Zionist ideology, like all ideologies, is only the distorted reflection of the interests of a class. It is the ideology of the Jewish petty bourgeoisie, suffocating between feudalism in ruins and capitalism in decay. The refutation of the ideological fantasies of Zionism does not naturally refute the real needs which brought them into being. It is modern anti-Semitism, and not mythical “eternal” anti-Semitism, which is the best agitator in favor of Zionism. Similarly, the basic question to determine is: To what extent is Zionism capable of resolving not the “eternal” Jewish problem but the Jewish question in the period of capitalist decay?
Zionist theoreticians like to compare Zionism with all other national movements. But in reality, the foundations of the national movements and that of Zionism are altogether different. The national movement of the European bourgeoisie is the consequence of capitalist development; it reflects the will of the bourgeoisie to create the national bases for production, to abolish feudal remnants. The national movement of the European bourgeoisie is closely linked with the ascending phase of capitalism. But in the nineteenth century, in the period of the flowering of nationalisms, far from being “Zionist,” the Jewish bourgeoisie was profoundly assimilationist. The economic process from which the modern nations issued laid the foundations for integration of the Jewish bourgeoisie into the bourgeois nation.
It is only when the process of the formation of nations approaches its end, when the productive forces have for a long time found themselves constricted within national boundaries, that the process of expulsion of Jews from capitalist society begins to manifest itself, that modern anti-Semitism begins to develop. The elimination of Judaism accompanies the decline of capitalism. Far from being a product of the development of the productive forces, Zionism is precisely the consequence of the complete halt of this development, the result of the petrifaction of capitalism. Whereas the national movement is the product of the ascending period of capitalism, Zionism is the product of the imperialist era. The Jewish tragedy of the twentieth century is a direct consequence of the decline of capitalism.
Therein lies the principal obstacle to the realization of Zionism. Capitalist decay – basis for the growth of Zionism – is also the cause of the impossibility of its realization. The Jewish bourgeoisie is compelled to create a national state, to assure itself of the objective framework for the development of its productive forces, precisely in the period when the conditions for such a development have long since disappeared. The conditions of the decline of capitalism which have posed so sharply the Jewish question make its solution equally impossible along the Zionist road. And there is nothing astonishing in that. An evil cannot be suppressed without destroying its causes. But Zionism wishes to resolve the Jewish question without destroying capitalism, which is the principal source of the suffering of the Jews.
At the end of the nineteenth century in the period when the Jewish problem was just beginning to be posed in all its sharpness, 150,000 Jews each year left their countries of origin. Between 1881 and 1925, nearly four million Jews emigrated. Despite these enormous figures, the Jewish population of Eastern Europe rose from six to eight million.
Thus, even when capitalism was still developing, even when the countries across the ocean were still receiving immigrants, the Jewish question could not even begin to be resolved (in the Zionist sense); far from diminishing, the Jewish population showed a bad penchant of wanting to grow. In order to begin to resolve the Jewish question, that is to say, in order to begin really to transplant the Jewish masses, it would be necessary for the countries of immigration to absorb at least a little more than the natural growth of Jews in the Diaspora, that is at least three hundred thousand Jews per year. And if such a figure could not be reached before the first imperialist war, when all the conditions were still favorable for emigration, when all developed countries such as the United States were permitting the mass entry of immigrants, then how can we think that it is possible in the period of the continuous crisis of capitalism, in the period of almost incessant wars?
Naturally there are enough ships in the world to transport hundreds of thousands, even millions of Jews. But if all countries have closed their doors to immigrants, it is because there is an overproduction of labor forces just as there is an overproduction of commodities. Contrary to Malthus, who believed that there would be too many people because there would be too few goods, it is precisely the abundance of goods which is the cause of the “plethora” of human beings. By what miracle, in a period when the world markets are saturated with goods, in a period when unemployment has everywhere become a permanent fixture, by what miracle can a country, however great and rich it may be (we pass over the data relating to poor and small Palestine), develop its productive forces to the point of being able to welcome three hundred thousand immigrants each year? In reality the possibilities for Jewish emigration diminish at the same time that the need for it increases. The causes which promote the need for emigration are the same as those which prevent its realization; they all spring from the decline of capitalism.
It is from this fundamental contradiction between the necessity for and the possibility of emigration that the political difficulties of Zionism flow. The period of development of the European nations was also the period of an intensive colonization in the countries across the ocean. It was at the beginning and middle of the nineteenth century in the golden age of European nationalism, that North America was colonized; it was also in this period that South America and Australia began to be developed. Vast areas of the earth were practically without a master and lent themselves marvelously to the establishment of millions of European emigrants. In that period, for reasons that we have studied, the Jews gave almost no thought to emigrating.
Today the whole world is colonized, industrialized, and divided among the various imperialisms. Everywhere Jewish emigrants come into collision at one and the same time with the nationalism of the “natives” and with the ruling imperialism. In Palestine, Jewish nationalism collides with an increasingly aggressive Arab nationalism. The development of Palestine by Jewish immigration tends to increase the intensity of this Arab nationalism. The economic development of the country results in the growth of the Arab population, its social differentiation, the growth of a national capitalism. To overcome Arab resistance the Jews need English imperialism. But its “support” is as harmful as is Arab resistance. English imperialism views with a favorable eye a weak Jewish immigration to constitute a counterweight to the Arab factor, but it is intensely hostile to the establishment of a big Jewish population in Palestine, to its industrial development, to the growth of its proletariat. It merely uses the Jews as a counterweight to the Arab threat but does everything to raise difficulties for Jewish immigration. Thus, to the increasing difficulties flowing from Arab resistance, there is added the perfidious game of British imperialism.
Finally, we must draw still one more conclusion from the fundamental premises which have been established. Because of its necessarily artificial character, because of the slim perspectives for a rapid and normal development of Palestinian economy in our period, the task of Zionist colonization requires considerable capital. Zionism demands incessantly increasing sacrifices from the Jewish communities of the world. But so long as the situation of the Jews is more or less bearable in the Diaspora, no Jewish class feels the necessity of making these sacrifices. To the extent that the Jewish masses feel the necessity of having a “country,” to the extent also that persecutions mount in intensity, so much the less are the Jewish masses able to contribute to Zionist construction. “A strong Jewish people in the Diaspora is necessary for Palestinian reconstruction,” states Ruppin. But so long as the Jewish people is strong in the Diaspora, it feels no need for Palestinian reconstruction. When it strongly feels this necessity, the possibility for realizing it no longer exists. It would be difficult today to ask European Jews, who have a pressing need to emigrate, to give aid for the rebuilding of Palestine. The day when they will be able to do it, it is a safe assumption that their enthusiasm for this task will have considerably cooled.
A relative success for Zionism, along the lines of creating a Jewish majority in Palestine and even of the formation of a “Jewish state,” that is to say, a state placed under the complete domination of English or American imperialism, cannot, naturally, be excluded. This would in some ways be a return to the state of things which existed in Palestine before the destruction of Jerusalem and, from this point of view, there will be “reparation of a two-thousand-year-old injustice.” But this tiny “independent” Jewish state in the midst of a worldwide Diaspora will be only an apparent return to the state of things before the year 70. It will not even be the beginning of the solution of the Jewish question. The Jewish Diaspora of the Roman era was in effect based on solid economic ground; the Jews played an important economic role in the world. The existence or absence of a Palestinian mother country had for the Jews of this period only a secondary importance. Today it is not a question of giving the Jews a political or spiritual center (as Achaad Haam would have it). It is a question of saving Judaism from the annihilation which threatens it in the Diaspora. But in what way will the existence of a small Jewish state in Palestine change anything in the situation of the Polish or German Jews? Admitting even that all the Jews in the world were today Palestinian citizens, would the policy of Hitler have been any different?
One must be stricken with an incurable juridical cretinism to believe that the creation of a small Jewish state in Palestine can change anything at all in the situation of the Jews throughout the world, especially in the present period. The situation after the eventual creation of a Jewish state in Palestine will resemble the state of things that existed in the Roman era only in the fact that in both cases the existence of a small Jewish state in Palestine could in no way influence the situation of the Jews in the Diaspora. In the Roman era, the economic and social position of Judaism in the Diaspora was very strong, so that the disappearance of this Jewish state did not in any way compromise it. Today the situation of the Jews in the world is very bad; so the reestablishment of a Jewish state in Palestine cannot in any way restore it. In both cases the situation of the Jews does not at all depend on the existence of a state in Palestine but is a function of the general economic, social, and political situation. Even supposing that the Zionist dream is realized and the “secular injustice” is undone – and we are still very far from that – the situation of Judaism throughout the world will in no way be modified by that. The temple will perhaps be rebuilt but the faithful will continue to suffer.
The history of Zionism is the best illustration of the insurmountable difficulties that it encounters, difficulties resulting, in the last analysis, from the fundamental contradiction which tears it apart: the contradiction between the growing necessity of resolving the Jewish question and the growing impossibility of resolving it under the conditions of decaying capitalism. Immediately following the first imperialist war, Jewish emigration to Palestine encountered no great obstacles in its path. Despite that, there were relatively few immigrants; the economic conditions of capitalist countries after the war made the need to emigrate less pressing. It was, moreover, because of this light emigration that the British movement did not feel obliged to set up bars to the entry of Jews into Palestine. In the years 1924, 1925, 1926, the Polish bourgeoisie opened an economic offensive against the Jewish masses. These years are also the period of a very important immigration into Palestine. But this massive immigration soon collided with insurmountable economic difficulties. The ebb was almost as great as was the flood tide. Up to 1933, the date of Hitler’s arrival to power, immigration was of little importance. After this date, tens of thousands of Jews began to arrive in Palestine. But this “conjuncture” was soon arrested by a storm of anti-Jewish demonstrations and massacres. The Arabs seriously feared becoming a minority in the country. The Arab feudal elements feared being submerged by the capitalist wave. British imperialism profited from this tension by piling up obstacles to the entry of the Jews, by working to deepen the gulf existing between the Jews and the Arabs, by proposing the partition of Palestine. Up to the second imperialist war, Zionism thus found itself in the grip of mounting difficulties. The Palestinian population lived in a state of permanent terror. Precisely when the situation of the Jews became ever more desperate, Zionism showed itself absolutely incapable of providing a remedy. “Illegal” Jewish immigrants were greeted with rifle fire by their British “protectors.”
The Zionist illusion began to lose its attractiveness even in the eyes of the most uninformed. In Poland, the last elections revealed that the Jewish masses were turning completely away from Zionism. The Jewish masses began to understand that Zionism not only could not seriously improve their situation, but that it was furnishing weapons to the anti-Semites by its theories of the “objective necessity of Jewish emigration.” The imperialist war and the triumph of Hitlerism in Europe are an unprecedented disaster for Judaism. Judaism is confronted with the threat of total extinction. What can Zionism do to counteract such a disaster? Is it not obvious that the Jewish question is very little dependent upon the future destiny of Tel Aviv but very greatly upon the regime which will be set up tomorrow in Europe and in the world? The Zionists have a great deal of faith in a victory of Anglo-American imperialism. But is there a single reason for believing that the attitude of the Anglo-American imperialists will differ after their eventual victory from their prewar attitude? It is obvious that there is none. Even admitting that Anglo-American imperialism will create some kind of abortive Jewish state, we have seen that the situation of world Judaism will hardly be affected. A great Jewish immigration into Palestine after this war will confront the same difficulties as previously. Under conditions of capitalist decay, it is impossible to transplant millions of Jews. Only a worldwide socialist planned economy would be capable of such a miracle. Naturally this presupposes the proletarian revolution.
But Zionism wishes precisely to resolve the Jewish question independently of the world revolution. By misconstruing the real sources of the Jewish question in our period, by lulling itself with puerile dreams and silly hopes, Zionism proves that it is an ideological excrescence and not a scientific doctrine. [16]
Notes
1. Congrès Juif Mondial, op. cit., pp. 246–47.
2. Ibid., p. 249.
3. Ibid., p. 249.
4. Yiddishe Economic (September–October 1938), p. 437.
5. At Warsaw in 1882, 79.3 percent of businessmen were Jews; in 1931, 51.4 percent of the businessmen were Jews. Jacob Lestschinsky, Der Wirtschaftliche Zusammenbruch der Juden in Deutschland u. Polen (Paris 1938), p. 48.
6. In the period when Jewish and non-Jewish petty-bourgeois intellectuals represent Hitler as the sole responsible party for anti-Semitism in our time, in the period when the United Nations, among them Poland, lay claim to being defenders of the “rights of man” – recalling this fact will most certainly not be devoid of usefulness. Of course Hitler organized, in a premeditated way, the destruction of European Judaism, and personified capitalist barbarism in this sphere as in others. But the various more or less “democratic” governments which followed each other in Poland could not have learned very much from him. The disappearance of Hitler can change nothing fundamental in the situation of the Jews. A transitory improvement of their condition will in no wise alter the profound roots of twentieth-century anti-Semitism.
7. Congrès Juif Mondial, op. cit., pp. 120–121.
8. Ibid., p. 254.
9. Yiddishe Economic (July–August 1938), p. 353.
10. Engels to Mehring, Selected Correspondence of Marx and Engels (New York 1942), p. 511.
11. See the Proudhon Utopia of free credit.
12. Hans Günther, Rassenkunde des Jüdischen Volkes (Munich 1930), p. 191.
13. Materialism and the National Question.
14. There is a religious Zionist bourgeois party, Misrakhi, and a religious Zionist workers party, Poale-Misrakhi.
15. Adolf Böhm, Die Zionistische Bewegung (Berlin 1935), vol. 1, chapter 3.
16. In this chapter, Zionism has been treated only insofar as it is linked with the Jewish question. The role of Zionism in Palestine naturally constitutes another problem.
Contents | Jews and Marxism Subject Page
Last updated: 19 August 2020
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<h2>Abram Leon</h2>
<h1>The Jewish Question</h1>
<p> </p>
<hr>
<h3>EIGHT<br>
Toward a solution of the Jewish question</h3>
<p class="fst">It is incorrect to state that a solution for the Jewish problem has been needed for two thousand years. The very fact that in the course of this long period such a solution was not found best demonstrates that it was not necessary.</p>
<p>Judaism was an indispensable factor in precapitalist society. It was a fundamental organism within it. That is what explains the two thousand year existence of Judaism in the Diaspora. The Jew was as characteristic a personage in feudal society as the lord and the serf. It was no accident that a foreign element played the role of “capital” in feudal society. Feudal society <em>as such</em> could not create a capitalist element; as soon as it was able to do so, precisely then it ceased being feudal. Nor was it accidental that the Jew remained a foreigner in the midst of feudal society. The “capital” of precapitalist society existed outside of its economic system. From the moment that capital begins to emerge from the womb of this social system and takes the place of the borrowed organ, the Jew is eliminated and feudal society ceases to be feudal.</p>
<p>It is modern capitalism that has posed the Jewish problem. Not because the Jews today number close to twenty million people (the proportion of Jews to non-Jews has declined greatly since the Roman era) but because capitalism destroyed the secular basis for the existence of Judaism. Capitalism destroyed feudal society; and with it the function of the Jewish people-class. History doomed this people-class to disappearance; and thus the Jewish problem arose. The Jewish problem is the problem of adapting Judaism to modern society, of liquidating the heritage bequeathed to humanity by feudalism.</p>
<p>For centuries Judaism was a social organism within which social and national elements were closely intermingled. The Jews are far from constituting a race; on the contrary, they are probably one of the most typical and conspicuous examples of racial mixture. This does not mean, however, that the Asiatic element is not very noticeable in the mixture – sufficiently outstanding, in any case, to set the Jew apart in the Western nations, where he is chiefly to be found. This real national “base” is supplemented by an imaginary, poetic base, formed out of the secular tradition which attaches the present Jew to his distant “ancestors” of biblical times. On this national base, the class foundation and the mercantile psychology were subsequently grafted. The national and social elements became mixed to the point of complete intermingling. It would be difficult to distinguish in a Polish Jew the part that his “type” has inherited from his ancestors and the part acquired from the social function that he fulfilled in that country for centuries. It must be agreed that the social base long ago acquired greater importance than the national base. At any rate, if the social element came to be added to the national element, the latter could persist only thanks to the former. It is thanks to his social and economic situation that the Jew was able to “preserve” himself.</p>
<p>Capitalism has posed the Jewish problem, that is to say, it has destroyed the social bases upon which Judaism maintained itself for centuries. But capitalism has not resolved the Jewish problem, for it has been unable to absorb the Jew liberated from his social shell. The decline of capitalism has suspended the Jews between heaven and earth. The Jewish “precapitalist” merchant has largely disappeared, but his son has found no place in modern production. The social basis of Judaism has crumbled; Judaism has become largely a declassed element. Capitalism has not only doomed the social function of the Jews; it has also doomed the Jews themselves.</p>
<p>Petty-bourgeois ideologists are always inclined to raise a historical phenomenon into an eternal category. For them the Jewish question is a function of the Diaspora; only the concentration of the Jews in Palestine can resolve it.</p>
<p>But it is pure childishness to reduce the Jewish question to a question of territory. The territorial solution has meaning only if it signifies the disappearance of traditional Judaism, the penetration of Jews into modern economy, the “productivization” of the Jews. By a detour, Zionism thus returns to the solution proposed by its worst enemies, the consistent “assimilationists.” For the Zionists as well as for the assimilationists it is a question of doing away with the “cursed” heritage of the past, of making workers, agriculturists, productive intellectuals, of the Jews. The illusion of Zionism does not consist in its desire to attain this result; that is a historical necessity which will cut its own path sooner or later. Its illusion consists in believing that the insurmountable difficulties which decaying capitalism puts in the way of these tasks will disappear as if by magic in Palestine. But if the Jews were unable to find a place in economic life in the Diaspora, the same causes will prevent them from doing so in Palestine. The world today is so much a unit that it is sheer folly to try to build within it a haven sheltered from its storms. That is why the failure of “assimilation” must of necessity be followed by the failure of Zionism. In this period when the Jewish problem takes on the aspect of a terrible tragedy, Palestine can be no more than a feeble palliative. Ten million Jews find themselves in a huge concentration camp. What remedy can the creation of a few Zionist colonies bring to this problem?</p>
<p>Well then – neither assimilation nor Zionism? No solution at all? No, there is no solution to the Jewish question under capitalism, just as there is no solution to the other problems posed before humanity – without profound social upheavals. The same causes which make the emancipation of the Jews an illusion also make the realization of Zionism impossible. Unless the profound causes for the Jewish question are eliminated, the effects cannot be eliminated.</p>
<p>The ghetto and the wheel [the badge that Jews sewed on their clothes in the Middle Ages] have reappeared – symbols, moreover, of the tragic destiny toward which humanity is being driven. But the very exacerbation of anti-Semitism prepares the road for its disappearance. The driving out of the Jews provides momentarily a kind of living space for the petty bourgeoisie. “Aryanization” creates jobs for some tens of thousands of unemployed intellectuals and petty bourgeois. But in attacking the apparent causes of their misfortunes, the petty bourgeoisie has merely strengthened the operation of the real causes. Fascism will accelerate the process of proletarianization of the middle classes. After the Jewish petty bourgeoisie, hundreds of thousands of shopkeepers and artisans were expropriated and proletarianized. Capitalist concentration made gigantic progress. “Improvement in the economic situation” took place only at the price of preparation for the second imperialist war, the cause of enormous destruction and slaughter.</p>
<p>Thus the tragic fate of Judaism mirrors with singular sharpness the situation of all humanity. The decline of capitalism means for the Jews the return to the ghetto – although the basis for the ghetto disappeared long ago, along with the foundations of feudal society. Similarly, for all humanity capitalism bars the road of the past as well as the highway to the future. Only the destruction of capitalism will make it possible for humanity to benefit from the immense achievements of the industrial era.</p>
<p>Is it astonishing that the Jewish masses, who are the first to feel – and with special sharpness – the effects of the contradictions of capitalism, should have furnished rich forces for the socialist and revolutionary struggle? “On various occasions Lenin emphasized the importance of the Jews for the revolution, not only in Russia but in other countries as well .... Lenin also expressed the thought that the flight of a part of the Jewish population ... into the interior of Russia, as a result of the occupation of the industrial regions of the West, had been a very useful thing for the revolution – just as the appearance of a large number of Jewish intellectuals in the Russian cities during the war had also been useful. They helped to smash the widespread and extremely dangerous sabotage which confronted the Bolsheviks everywhere immediately following the revolution. Thus they helped the revolution to survive a very critical stage.” <a href="#n1" name="f1">[1]</a> The high percentage of Jews in the proletarian movement is only a reflection of the tragic situation of Judaism in our time. The intellectual faculties of the Jews, fruit of the historic past of Judaism, are thus an important support for the proletarian movement.</p>
<p>In this latter fact lies a final – and not the least important – reason for modern anti-Semitism. The ruling classes persecute with special sadism the Jewish intellectuals and workers, who have supplied a host of fighters to the revolutionary movement. To isolate the Jews completely from the sources of culture and science has become a vital necessity for the decaying system which persecutes them. The ridiculous legend of “Jewish-Marxism” is nothing but a caricature of the bonds that actually exist between socialism and the Jewish masses.</p>
<p>Never has the situation of the Jews been so tragic. In the worst periods of the Middle Ages entire countries opened their doors to receive them. Today capitalism, which rules the whole world, makes the earth uninhabitable for them. Never has the mirage of a Promised Land so haunted the Jewish masses. But never was a Promised Land less capable of resolving the Jewish question than in our time.</p>
<p>The very paroxysm, however, that the Jewish problem has reached today, also provides the key to its solution. The plight of the Jews has never been so tragic; but never has it been so close to ceasing to be that. In past centuries, hatred of the Jews had a real basis in the social antagonism which set them against other classes of the population. Today, the interest of the Jewish classes are closely bound up with the interests of the popular masses of the entire world. By persecuting the Jews as “capitalist,” capitalism makes them complete pariahs. The ferocious persecutions against Judaism render stark naked the stupid bestiality of anti-Semitism and destroy the remnants of prejudices that the working classes nurse against the Jews. The ghettos and the yellow badges do not prevent the workers from feeling a growing solidarity with those who suffer most from the afflictions all humanity is suffering.</p>
<p>And the greatest social explosion the world has ever seen is finally preparing the liberation of the most persecuted pariahs of our planet. When the people of the factories and the fields have finally thrown off the yoke of the capitalists, when a future of unlimited development opens up before liberated humanity, the Jewish masses will be able to make a far from unimportant contribution towards the building of a new world.</p>
<p>This does not mean that socialism, brought to maturity by a wave of a magic wand, will remove all the difficulties that stand as obstacles to the solution of the Jewish question. The example of the USSR shows that even after the proletarian revolution, the special structure of Judaism – a heritage of history – will give rise to a number of difficulties, particularly during the transition periods. During the time of the NEP, for instance, the Jews of Russia, utilizing their traditional business experience, furnished numerous cadres for the new bourgeois class.</p>
<p>Moreover, the great mass of Jewish small tradesmen and petty artisans suffered greatly at the beginning of the proletarian dictatorship. It was only later, with the success of the Five Year Plan, that the Jews penetrated en masse into Soviet economic life. Despite certain difficulties, the experiment was decisive: hundreds of thousands of Jews became workers and peasants. The fact that white-collar workers and functionaries constitute a considerable percentage of wage-earning Jews must not be considered a matter for concern. Socialism is not at all interested that all Jews should take up manual occupations. On the contrary, the intellectual faculties of the Jews should be put to widest use.</p>
<p>It is thus clear that, even under the relatively difficult conditions of a backward country the proletariat can solve the Jewish problem. The Jews have penetrated en masse into Russian economy. The “productivization” of the Jews has been accompanied by two parallel processes: assimilation and territorial concentration. Wherever the Jews penetrate into industry, they are rapidly assimilated. As early as 1926 there were hardly 40 percent of the Jewish miners in the Donets Basin who spoke Yiddish. Nevertheless the Jews live under a regime of national autonomy; they have special schools, a Yiddish press, autonomous courts. But the Jewish nationalists are continually deploring the abandonment of these schools and this press. Only in those places where fairly dense masses of Jews have been colonized, especially in Birobidjan, do we witness a kind of “national renaissance.” <a href="#n2" name="f2">[2]</a></p>
<p>Thus life itself demonstrates that the problem which so bitterly divides Judaism – assimilation or territorial concentration – is a fundamental problem only to petty-bourgeois dreamers. The Jewish masses want simply an end to their martyrdom. That, socialism alone can give them. But socialism must give the Jews, as it will to all peoples, the possibility of assimilation as well as the possibility of having a special national life.</p>
<p>The end of Judaism? Certainly. Despite their apparently irreconcilable opposition, assimilationists and nationalists are agreed in combating Judaism as history has known it – the mercantile Judaism of the Diaspora, the people-class. The Zionists never stop repeating that it is a matter of creating a new type of Jew in Palestine, altogether different from the Jew of the Diaspora. They even reject with horror the language and culture of the Judaism of the Diaspora. In Birobidjan, in the Ukraine and the Donets Basin, even the old man discards his secular dress. The people-class, historical Judaism, has been definitively doomed by history. Despite all its traditional pretensions, Zionism will not culminate in a “national renaissance” but, at the most, in a “national birth.” The “new Jew” resembles neither his brother of the Diaspora nor his ancestor of the era of the fall of Jerusalem. The young Palestinian, proud of speaking the language of Bar Kochba, would probably not be understood by his ancestor; in reality, the Jews in the Roman era spoke Aramaic and Greek fluently but had only a vague knowledge of Hebrew. Moreover, neo-Hebrew, in the nature of things, is going further and further away from the language of the Bible. Everything will add up to estrange the Palestinian Jew from the Judaism of the Diaspora. And tomorrow, when national barriers and prejudices begin to disappear in Palestine, who can doubt that a fruitful reconciliation will take place between the Arab and the Jewish workers, the result of which will be their partial or total fusion?</p>
<p>“Eternal” Judaism, which, moreover, has never been anything but a myth, will disappear. It is puerile to pose assimilation and the “national solution” as opposites. Even in those countries where Jewish national communities will eventually be created, we will be witnessing either the creation of a new Jewish nationality, completely different from the old, or the formation of new nations. Moreover, even in the first case, unless the people already established in the country are driven out or the rigorous prescriptions of Ezra and Nehemiah are revived, this new nationality cannot fail to come under the influence of the longtime inhabitants of the country.</p>
<p>In the sphere of nationality, only socialism can bring the widest democracy. It must provide the Jews with the opportunity of living a national existence in every country they inhabit; it must also give them the opportunity of concentrating in one or more territories, naturally without injuring the interests of the native inhabitants. Only the widest proletarian democracy will make possible the resolution of the Jewish problem with a minimum of suffering.</p>
<p>Clearly, the tempo of the solution of the Jewish problem depends upon the general tempo of socialist construction. The opposition between assimilation and the national solution is an entirely relative one, the latter often being nothing but the prelude to the former. Historically, all existing nations are the products of various fusions of races and peoples. It is not excluded that new nations, fanned by the fusion or even the dispersion of nations now existing, will be created. However it may be, socialism must limit itself in this sphere to “letting nature take its course.”</p>
<p>Thus in a certain sense socialism will return to the practice of precapitalist society. It was capitalism by virtue of the fact that it provided an economic basis for the national problem, which also created insoluble national contradictions. Before the capitalist era, Slovaks, Czechs, Germans, French, lived in perfect understanding. Wars did not have a national character; they had interest only for the possessing classes. The policy of compulsory assimilation, of national persecution, was unknown to the Romans. Submission of barbarian peoples to Romanization or Hellenization was a peaceful process. Today, national-cultural and linguistic antagonisms are only manifestations of the economic antagonism created by capitalism. With the disappearance of capitalism, the national problem will lose all its acuteness. If it is premature to speak of a worldwide assimilation of peoples, it is nonetheless clear that a planned economy on a global scale will bring all the peoples of the world much closer to each other. But the hastening of this assimilation by artificial means would hardly seem to be indicated; nothing could do more harm. We still cannot foresee exactly what the “offspring” of present Judaism will be; socialism will take care that the “birth” will take place under the best possible conditions.</p>
<p> </p>
<h3>Notes</h3>
<p class="information"><a href="#f1" name="n1">1.</a> S. Dimanstein, <strong>Lenin on the Jewish Question in Russia</strong> (Russian) (Moscow 1924). Quoted by Otto Heller, <strong>Der Untergang des Judentums</strong> (Vienna [1931]), p. 230.</p>
<p class="information"><a href="#f2" name="n2">2.</a> We touch here on the Jewish problem in Russia only in passing.</p>
<p> </p>
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<p class="updat">Last updated: 27 August 2020</p>
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Abram Leon
The Jewish Question
EIGHT
Toward a solution of the Jewish question
It is incorrect to state that a solution for the Jewish problem has been needed for two thousand years. The very fact that in the course of this long period such a solution was not found best demonstrates that it was not necessary.
Judaism was an indispensable factor in precapitalist society. It was a fundamental organism within it. That is what explains the two thousand year existence of Judaism in the Diaspora. The Jew was as characteristic a personage in feudal society as the lord and the serf. It was no accident that a foreign element played the role of “capital” in feudal society. Feudal society as such could not create a capitalist element; as soon as it was able to do so, precisely then it ceased being feudal. Nor was it accidental that the Jew remained a foreigner in the midst of feudal society. The “capital” of precapitalist society existed outside of its economic system. From the moment that capital begins to emerge from the womb of this social system and takes the place of the borrowed organ, the Jew is eliminated and feudal society ceases to be feudal.
It is modern capitalism that has posed the Jewish problem. Not because the Jews today number close to twenty million people (the proportion of Jews to non-Jews has declined greatly since the Roman era) but because capitalism destroyed the secular basis for the existence of Judaism. Capitalism destroyed feudal society; and with it the function of the Jewish people-class. History doomed this people-class to disappearance; and thus the Jewish problem arose. The Jewish problem is the problem of adapting Judaism to modern society, of liquidating the heritage bequeathed to humanity by feudalism.
For centuries Judaism was a social organism within which social and national elements were closely intermingled. The Jews are far from constituting a race; on the contrary, they are probably one of the most typical and conspicuous examples of racial mixture. This does not mean, however, that the Asiatic element is not very noticeable in the mixture – sufficiently outstanding, in any case, to set the Jew apart in the Western nations, where he is chiefly to be found. This real national “base” is supplemented by an imaginary, poetic base, formed out of the secular tradition which attaches the present Jew to his distant “ancestors” of biblical times. On this national base, the class foundation and the mercantile psychology were subsequently grafted. The national and social elements became mixed to the point of complete intermingling. It would be difficult to distinguish in a Polish Jew the part that his “type” has inherited from his ancestors and the part acquired from the social function that he fulfilled in that country for centuries. It must be agreed that the social base long ago acquired greater importance than the national base. At any rate, if the social element came to be added to the national element, the latter could persist only thanks to the former. It is thanks to his social and economic situation that the Jew was able to “preserve” himself.
Capitalism has posed the Jewish problem, that is to say, it has destroyed the social bases upon which Judaism maintained itself for centuries. But capitalism has not resolved the Jewish problem, for it has been unable to absorb the Jew liberated from his social shell. The decline of capitalism has suspended the Jews between heaven and earth. The Jewish “precapitalist” merchant has largely disappeared, but his son has found no place in modern production. The social basis of Judaism has crumbled; Judaism has become largely a declassed element. Capitalism has not only doomed the social function of the Jews; it has also doomed the Jews themselves.
Petty-bourgeois ideologists are always inclined to raise a historical phenomenon into an eternal category. For them the Jewish question is a function of the Diaspora; only the concentration of the Jews in Palestine can resolve it.
But it is pure childishness to reduce the Jewish question to a question of territory. The territorial solution has meaning only if it signifies the disappearance of traditional Judaism, the penetration of Jews into modern economy, the “productivization” of the Jews. By a detour, Zionism thus returns to the solution proposed by its worst enemies, the consistent “assimilationists.” For the Zionists as well as for the assimilationists it is a question of doing away with the “cursed” heritage of the past, of making workers, agriculturists, productive intellectuals, of the Jews. The illusion of Zionism does not consist in its desire to attain this result; that is a historical necessity which will cut its own path sooner or later. Its illusion consists in believing that the insurmountable difficulties which decaying capitalism puts in the way of these tasks will disappear as if by magic in Palestine. But if the Jews were unable to find a place in economic life in the Diaspora, the same causes will prevent them from doing so in Palestine. The world today is so much a unit that it is sheer folly to try to build within it a haven sheltered from its storms. That is why the failure of “assimilation” must of necessity be followed by the failure of Zionism. In this period when the Jewish problem takes on the aspect of a terrible tragedy, Palestine can be no more than a feeble palliative. Ten million Jews find themselves in a huge concentration camp. What remedy can the creation of a few Zionist colonies bring to this problem?
Well then – neither assimilation nor Zionism? No solution at all? No, there is no solution to the Jewish question under capitalism, just as there is no solution to the other problems posed before humanity – without profound social upheavals. The same causes which make the emancipation of the Jews an illusion also make the realization of Zionism impossible. Unless the profound causes for the Jewish question are eliminated, the effects cannot be eliminated.
The ghetto and the wheel [the badge that Jews sewed on their clothes in the Middle Ages] have reappeared – symbols, moreover, of the tragic destiny toward which humanity is being driven. But the very exacerbation of anti-Semitism prepares the road for its disappearance. The driving out of the Jews provides momentarily a kind of living space for the petty bourgeoisie. “Aryanization” creates jobs for some tens of thousands of unemployed intellectuals and petty bourgeois. But in attacking the apparent causes of their misfortunes, the petty bourgeoisie has merely strengthened the operation of the real causes. Fascism will accelerate the process of proletarianization of the middle classes. After the Jewish petty bourgeoisie, hundreds of thousands of shopkeepers and artisans were expropriated and proletarianized. Capitalist concentration made gigantic progress. “Improvement in the economic situation” took place only at the price of preparation for the second imperialist war, the cause of enormous destruction and slaughter.
Thus the tragic fate of Judaism mirrors with singular sharpness the situation of all humanity. The decline of capitalism means for the Jews the return to the ghetto – although the basis for the ghetto disappeared long ago, along with the foundations of feudal society. Similarly, for all humanity capitalism bars the road of the past as well as the highway to the future. Only the destruction of capitalism will make it possible for humanity to benefit from the immense achievements of the industrial era.
Is it astonishing that the Jewish masses, who are the first to feel – and with special sharpness – the effects of the contradictions of capitalism, should have furnished rich forces for the socialist and revolutionary struggle? “On various occasions Lenin emphasized the importance of the Jews for the revolution, not only in Russia but in other countries as well .... Lenin also expressed the thought that the flight of a part of the Jewish population ... into the interior of Russia, as a result of the occupation of the industrial regions of the West, had been a very useful thing for the revolution – just as the appearance of a large number of Jewish intellectuals in the Russian cities during the war had also been useful. They helped to smash the widespread and extremely dangerous sabotage which confronted the Bolsheviks everywhere immediately following the revolution. Thus they helped the revolution to survive a very critical stage.” [1] The high percentage of Jews in the proletarian movement is only a reflection of the tragic situation of Judaism in our time. The intellectual faculties of the Jews, fruit of the historic past of Judaism, are thus an important support for the proletarian movement.
In this latter fact lies a final – and not the least important – reason for modern anti-Semitism. The ruling classes persecute with special sadism the Jewish intellectuals and workers, who have supplied a host of fighters to the revolutionary movement. To isolate the Jews completely from the sources of culture and science has become a vital necessity for the decaying system which persecutes them. The ridiculous legend of “Jewish-Marxism” is nothing but a caricature of the bonds that actually exist between socialism and the Jewish masses.
Never has the situation of the Jews been so tragic. In the worst periods of the Middle Ages entire countries opened their doors to receive them. Today capitalism, which rules the whole world, makes the earth uninhabitable for them. Never has the mirage of a Promised Land so haunted the Jewish masses. But never was a Promised Land less capable of resolving the Jewish question than in our time.
The very paroxysm, however, that the Jewish problem has reached today, also provides the key to its solution. The plight of the Jews has never been so tragic; but never has it been so close to ceasing to be that. In past centuries, hatred of the Jews had a real basis in the social antagonism which set them against other classes of the population. Today, the interest of the Jewish classes are closely bound up with the interests of the popular masses of the entire world. By persecuting the Jews as “capitalist,” capitalism makes them complete pariahs. The ferocious persecutions against Judaism render stark naked the stupid bestiality of anti-Semitism and destroy the remnants of prejudices that the working classes nurse against the Jews. The ghettos and the yellow badges do not prevent the workers from feeling a growing solidarity with those who suffer most from the afflictions all humanity is suffering.
And the greatest social explosion the world has ever seen is finally preparing the liberation of the most persecuted pariahs of our planet. When the people of the factories and the fields have finally thrown off the yoke of the capitalists, when a future of unlimited development opens up before liberated humanity, the Jewish masses will be able to make a far from unimportant contribution towards the building of a new world.
This does not mean that socialism, brought to maturity by a wave of a magic wand, will remove all the difficulties that stand as obstacles to the solution of the Jewish question. The example of the USSR shows that even after the proletarian revolution, the special structure of Judaism – a heritage of history – will give rise to a number of difficulties, particularly during the transition periods. During the time of the NEP, for instance, the Jews of Russia, utilizing their traditional business experience, furnished numerous cadres for the new bourgeois class.
Moreover, the great mass of Jewish small tradesmen and petty artisans suffered greatly at the beginning of the proletarian dictatorship. It was only later, with the success of the Five Year Plan, that the Jews penetrated en masse into Soviet economic life. Despite certain difficulties, the experiment was decisive: hundreds of thousands of Jews became workers and peasants. The fact that white-collar workers and functionaries constitute a considerable percentage of wage-earning Jews must not be considered a matter for concern. Socialism is not at all interested that all Jews should take up manual occupations. On the contrary, the intellectual faculties of the Jews should be put to widest use.
It is thus clear that, even under the relatively difficult conditions of a backward country the proletariat can solve the Jewish problem. The Jews have penetrated en masse into Russian economy. The “productivization” of the Jews has been accompanied by two parallel processes: assimilation and territorial concentration. Wherever the Jews penetrate into industry, they are rapidly assimilated. As early as 1926 there were hardly 40 percent of the Jewish miners in the Donets Basin who spoke Yiddish. Nevertheless the Jews live under a regime of national autonomy; they have special schools, a Yiddish press, autonomous courts. But the Jewish nationalists are continually deploring the abandonment of these schools and this press. Only in those places where fairly dense masses of Jews have been colonized, especially in Birobidjan, do we witness a kind of “national renaissance.” [2]
Thus life itself demonstrates that the problem which so bitterly divides Judaism – assimilation or territorial concentration – is a fundamental problem only to petty-bourgeois dreamers. The Jewish masses want simply an end to their martyrdom. That, socialism alone can give them. But socialism must give the Jews, as it will to all peoples, the possibility of assimilation as well as the possibility of having a special national life.
The end of Judaism? Certainly. Despite their apparently irreconcilable opposition, assimilationists and nationalists are agreed in combating Judaism as history has known it – the mercantile Judaism of the Diaspora, the people-class. The Zionists never stop repeating that it is a matter of creating a new type of Jew in Palestine, altogether different from the Jew of the Diaspora. They even reject with horror the language and culture of the Judaism of the Diaspora. In Birobidjan, in the Ukraine and the Donets Basin, even the old man discards his secular dress. The people-class, historical Judaism, has been definitively doomed by history. Despite all its traditional pretensions, Zionism will not culminate in a “national renaissance” but, at the most, in a “national birth.” The “new Jew” resembles neither his brother of the Diaspora nor his ancestor of the era of the fall of Jerusalem. The young Palestinian, proud of speaking the language of Bar Kochba, would probably not be understood by his ancestor; in reality, the Jews in the Roman era spoke Aramaic and Greek fluently but had only a vague knowledge of Hebrew. Moreover, neo-Hebrew, in the nature of things, is going further and further away from the language of the Bible. Everything will add up to estrange the Palestinian Jew from the Judaism of the Diaspora. And tomorrow, when national barriers and prejudices begin to disappear in Palestine, who can doubt that a fruitful reconciliation will take place between the Arab and the Jewish workers, the result of which will be their partial or total fusion?
“Eternal” Judaism, which, moreover, has never been anything but a myth, will disappear. It is puerile to pose assimilation and the “national solution” as opposites. Even in those countries where Jewish national communities will eventually be created, we will be witnessing either the creation of a new Jewish nationality, completely different from the old, or the formation of new nations. Moreover, even in the first case, unless the people already established in the country are driven out or the rigorous prescriptions of Ezra and Nehemiah are revived, this new nationality cannot fail to come under the influence of the longtime inhabitants of the country.
In the sphere of nationality, only socialism can bring the widest democracy. It must provide the Jews with the opportunity of living a national existence in every country they inhabit; it must also give them the opportunity of concentrating in one or more territories, naturally without injuring the interests of the native inhabitants. Only the widest proletarian democracy will make possible the resolution of the Jewish problem with a minimum of suffering.
Clearly, the tempo of the solution of the Jewish problem depends upon the general tempo of socialist construction. The opposition between assimilation and the national solution is an entirely relative one, the latter often being nothing but the prelude to the former. Historically, all existing nations are the products of various fusions of races and peoples. It is not excluded that new nations, fanned by the fusion or even the dispersion of nations now existing, will be created. However it may be, socialism must limit itself in this sphere to “letting nature take its course.”
Thus in a certain sense socialism will return to the practice of precapitalist society. It was capitalism by virtue of the fact that it provided an economic basis for the national problem, which also created insoluble national contradictions. Before the capitalist era, Slovaks, Czechs, Germans, French, lived in perfect understanding. Wars did not have a national character; they had interest only for the possessing classes. The policy of compulsory assimilation, of national persecution, was unknown to the Romans. Submission of barbarian peoples to Romanization or Hellenization was a peaceful process. Today, national-cultural and linguistic antagonisms are only manifestations of the economic antagonism created by capitalism. With the disappearance of capitalism, the national problem will lose all its acuteness. If it is premature to speak of a worldwide assimilation of peoples, it is nonetheless clear that a planned economy on a global scale will bring all the peoples of the world much closer to each other. But the hastening of this assimilation by artificial means would hardly seem to be indicated; nothing could do more harm. We still cannot foresee exactly what the “offspring” of present Judaism will be; socialism will take care that the “birth” will take place under the best possible conditions.
Notes
1. S. Dimanstein, Lenin on the Jewish Question in Russia (Russian) (Moscow 1924). Quoted by Otto Heller, Der Untergang des Judentums (Vienna [1931]), p. 230.
2. We touch here on the Jewish problem in Russia only in passing.
Contents | Jews and Marxism Subject Page
Last updated: 27 August 2020
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./articles/Leon-Abram/https:..www.marxists.org.subject.jewish.leon.ch1 | <body><h2>Abram Leon</h2>
<h1>The Jewish Question</h1>
<p> </p>
<h3>ONE<br><br>
The premises for a scientific study of Jewish history</h3>
<p class="fst">The scientific study of Jewish history is yet to transcend the stage of idealist improvisation. Serious historians have boldly attacked the field of history as a whole in the spirit of Marx, and have in large measure conquered it for the materialist outlook. Jewish history, however, still remains the chosen land of the “god-seekers” of every variety. It is one of the few fields of history where idealist prejudices have succeeded in entrenching and maintaining themselves to so great an extent.</p>
<p>How many oceans of ink have been spilled to celebrate the famous “miracle of the Jew!” “What a strange spectacle are these men who have, in order to preserve the sacred trust of their faith, braved persecutions and martyrdom,” exclaims Bédarride. <a href="#n1" name="f1">[1]</a></p>
<p>The preservation of the Jews is explained by all historians as the product of their devotion through the centuries to their religion or their nationality. Differences among these historians begin to appear only when it comes to defining the “goal” for which the Jews preserved themselves, the reason for their resistance to assimilation. Some, taking the religious point of view, speak of the “sacred trust of their faith”; others, like Dubnow, defend the theory of “attachment to the national idea.” “We must seek the causes for the historical phenomenon of the preservation of the Jewish people in their national spiritual strength, in their ethical basis, and in the monotheistic principle,” says the <strong>General Encyclopedia</strong> which contrives in this way to reconcile the various viewpoints among the idealist historians. <a href="#n2" name="f2">[2]</a></p>
<p>But while it is possible to reconcile these idealist theories with one another, it is hopeless to try to find some ground for reconciling these same theories with the elementary rules of historical science. The latter must categorically reject the fundamental error of all idealist schools, which consists of putting under the hallmark of free will the cardinal question of Jewish history, namely: the preservation of Judaism. Only a study of the economic role played by the Jews can contribute to elucidating the causes for the “miracle of the Jew.”</p>
<p>To study the evolution of this question is not exclusively of academic interest. Without a thorough study of Jewish history, it is difficult to understand the Jewish question in modern times. The plight of the Jews in the twentieth century is intimately bound up with their historical past. Every social formation represents a stage in the social process. <em>Being</em> is only a moment in the process of <em>becoming</em>. In order to undertake an analysis of the Jewish question in its present phase of development, it is indispensable to know its historical roots.</p>
<p>In the sphere of Jewish history, as in the sphere of universal history, Karl Marx’s brilliant thought points the road to follow “We will not look for the secret of the Jew in his religion, but we will look for the secret of the religion in the real Jew.” <a href="#n3" name="f3">[3]</a> Marx thus puts the Jewish question back on its feet. We must not start with religion in order to explain Jewish history; on the contrary; the preservation of the Jewish religion or nationality can be explained only by the “real Jew,” that is to say, by the Jew in his economic and social role. The preservation of the Jews contains nothing of the miraculous. “Judaism has survived not in spite of history, but by virtue of history.” <a href="#n4" name="f4">[4]</a></p>
<p>It is precisely by studying the historical function of Judaism that one is able to discover the “secret of its survival in history. The struggles between Judaism and Christian society, under their respective religious guises, were in reality social struggles. “We transmute the contradictions of the state with a specific religion, like Judaism, into the the contradiction of the state with specific secular elements.” <a href="#n5" name="f5">[5]</a></p>
<p>The general pattern of Jewish history is presented (with various slight nuances) somewhat as follows according to the reigning idealist school: Up to the destruction of Jerusalem, as late as the rebellion of Bar Kochba, the Jewish nation was in no wise different from other normally constituted nations, such as the Roman or the Greek. The wars between the Romans and the Jews resulted in dispersing the Jewish nation to the four corners of the world. In the dispersion, the Jews fiercely resisted national and religious assimilation. Christianity found no more rabid adversaries in its path and despite all its efforts did not succeed in converting them. The fall of the Roman empire increased the isolation of Judaism which constituted the sole heterodox element after the complete triumph of Christianity in the West.</p>
<p>The Jews of the Diaspora, in the epoch of the barbarian invasions, did not at all constitute a homogeneous social group. On the contrary agriculture, industry, commerce were widely prevalent among them. It was the continuous religious persecutions which forced them to entrench themselves increasingly in commerce and usury. The Crusades, by reason of the religious fanaticism they engendered, violently accelerated this evolution which transformed the Jews into usurers and ended in their confinement in ghettos. Of course, the hatred against the Jews was also fanned by the latter’s economic role. But the historians attribute only a secondary importance to this factor. This condition of Judaism continued up to the French Revolution, which destroyed the barriers that religious oppression had raised against the Jews.</p>
<p>Several important facts challenge the truth of this pattern:</p>
<p class="fst">1. The dispersal of the Jews does not at all date from the fall of Jerusalem. Several centuries before this event, the great majority of Jews were already spread over the four corners of the world. It is certain that well before the fall of Jerusalem, more than three-fourths of the Jews no longer lived in Palestine. <a href="#n6" name="f6">[6]</a></p>
<p>For the great masses of Jews dispersed in the Greek empire, and later in the Roman empire, the Jewish kingdom of Palestine was of completely secondary importance. The tie with the “mother country” was manifested solely in religious pilgrimages to Jerusalem, which played a role similar to that of Mecca for the Moslems. Shortly before the fall of Jerusalem, King Agrippa said to the Jews: “There is no people upon the habitable earth which have not some portion of you among them.” <a href="#n7" name="f7">[7]</a></p>
<p>The Diaspora was consequently not at all an accidental thing, a product of acts of violence. <a href="#n8" name="f8">[8]</a> The fundamental reason for Jewish emigration must be sought in the geographic conditions of Palestine. “The Jews in Palestine were the possessors of a mountainous country which at a certain time no longer sufficed for assuring its inhabitants as tolerable an existence as that among their neighbors. Such a people is driven to choose between brigandage and emigration. The Scots, for example, alternately engaged in each of these pursuits. The Jews, after numerous struggles with their neighbors, also took the second road ... Peoples living under such conditions do not go to foreign countries as agriculturists. They go there rather in the role of mercenaries, like the Arcadians of antiquity, the Swiss in the Middle Ages, the Albanians in our day; or in the role of <em>merchants</em>, like the Jews, the Scots, and the Armenians. We see here that a similar environment tends to produce similar characteristics among peoples of different races.” <a href="#n9" name="f9">[9]</a></p>
<p class="fst">2. The overwhelming majority of Jews of the Diaspora unquestionably engaged in trade. Palestine itself since very remote times constituted a passageway for merchandise, a bridge between the valleys of the Euphrates and the Nile. “Syria was the inevitable highway of the conquerors ... Trade and ideas followed the same route. It is easy to see that from a very early date these regions were thickly populated, and possessed great cities whose very situation lent itself to commerce.” <a href="#n10" name="f10">[10]</a></p>
<p>The geographic conditions of Palestine therefore explain both the Jewish emigration and its commercial character. On the other hand, among all nations, at the beginning of their development, the traders are foreigners. “The characteristic of a natural economy is that each sphere produces everything consumed by it and consumes everything it produces. There is consequently no pressure to buy goods or services from others ... Because what is produced is consumed in this economy, we find among all these peoples that the first traders are foreigners.” <a href="#n11" name="f11">[11]</a></p>
<p>Philo enumerates many cities where the Jews were established as traders. He states that they “inhabited countless cities in Europe, in Asia, in Libya, on the mainland and in the islands, along the coasts and in the interior.” The Jews who inhabited the Hellenic islands, as well as the mainland and further to the west, had installed themselves there with commercial objectives. <a href="#n12" name="f12">[12]</a> “As well as the Syrians, the Jews were to be found in all the cities, living in small communities; they were sailors, brokers, bankers, whose influence was as essential in the economic life of the time as was the Oriental influence which made itself felt at the same time in the art and the religious thought of the period.” <a href="#n13" name="f13">[13]</a></p>
<p>It is to their social position that the Jews are beholden for the wide autonomy granted them by the Roman emperors. The Jews, “and they only were allowed to form, so to speak, a community within the community and – while the other nonburgesses were ruled by the authorities of the burgess body – [they were permitted] up to a certain degree to govern themselves.” <a href="#n14" name="f14">[14]</a> Caesar advanced the interests of the Jews in Alexandria and in Rome by special favors and privileges, and protected in particular their peculiar worship against the Roman as well as against the Greek local priests. <a href="#n15" name="f15">[15]</a></p>
<p class="fst">3. Hatred for the Jews does not date solely from the birth of Christianity. Seneca treated the Jews as a criminal race. Juvenal believed that the Jews existed only to cause evil for other peoples. Quintilian said that the Jews were a curse for other people.</p>
<p>The cause of ancient anti-Semitism is the same as for medieval anti-Semitism: the antagonism toward the merchant in every society based principally on the production of use values. “Medieval hostility toward merchants is not solely of Christian or pseudo-Christian inspiration. It also has a ‘real’ pagan source. The latter was strongly rooted in a class ideology; in the disdain which the leading classes of Roman society – the senatorial gentes as well as the provincial curia – felt, out of a deep peasant tradition, toward all forms of economic activity other than those deriving from agriculture.” <a href="#n16" name="f16">[16]</a></p>
<p>However, while anti-Semitism was already strongly developed in Roman society the condition of the Jews, as we have seen, was quite enviable there. The hostility of classes that live from the land toward trade does not eliminate their dependence upon the latter. The landowner hates and despises the merchant but he cannot get along without him. <a href="#n17" name="f17">[17]</a></p>
<p>The triumph of Christianity did not bring any notable changes in this regard. Christianity, at first the religion of the slaves and the downtrodden, was rapidly transformed into an ideology of the ruling class of landed proprietors. It was Constantine the Great who laid the foundation for medieval serfdom. The triumphal march of Christianity across Europe was accompanied by an extension of feudal economy. The religious orders played an extremely important role in the progress of civilization, which consisted in that epoch of developing agriculture on the basis of serfdom. There is little astonishing in the fact that “born in Judaism, formed at first exclusively of Jews, Christianity nevertheless nowhere during the first four centuries found more difficulty than among them in acquiring partisans for its doctrine.” <a href="#n18" name="f18">[18]</a> As a matter of fact, Christian mentality during the first ten centuries of our era viewed everything connected with economic life from the basic standpoint “that a merchant can with difficulty do work pleasing to God” and that “all trade implies a greater or lesser amount of cheating.” <a href="#n19" name="f19">[19]</a> The life of the Jews appeared completely incomprehensible to St. Ambrose who lived in the fourth century. He despised the wealth of the Jews profoundly, and firmly believed that they would be punished for it by eternal damnation.</p>
<p>The fierce hostility of the Jews toward Catholicism and their determination to preserve a religion which admirably expressed their social interests are therefore quite natural. It is not the loyalty of the Jews to their faith which explains their preservation as a distinct social group; on the contrary it is their preservation as a distinct social group which explains their attachment to their faith.</p>
<p>Nevertheless, like the hostility in antiquity toward the Jews, Christian anti-Semitism in the first ten centuries of the Christian era never went to the extreme of demanding the annihilation of Judaism. Whereas official Christianity mercilessly persecuted paganism and heresies, it tolerated the Jewish religion. The condition of the Jews continued to improve during the decline of the Roman empire, after the complete triumph of Christianity and up to the twelfth century. The more economic decay deepened, all the more did the commercial role of the Jews grow in importance. In the tenth century, they constituted the sole economic link between Europe and Asia.</p>
<p class="fst">4. It is only from the twelfth century on, parallel with the economic development of Western Europe, with the growth of cities and the formation of a native commercial and industrial class, that the condition of the Jews begins to worsen seriously, leading to their almost complete elimination from most of the Western countries. Persecutions of the Jews take on increasingly violent forms. As against this, in the backward countries of Eastern Europe, their condition continued to flourish up to a fairly recent period.</p>
<p>From these few preliminary considerations, we can see how false is the general conception prevailing in the sphere of Jewish history. <em>Above all the Jews constitute historically a social group with a specific economic function. They are a class, or more precisely, a people-class.</em> <a href="#n20" name="f20">[20]</a></p>
<p>The concept of class does not at all contradict the concept of people. It is because the Jews have preserved themselves as a social class that they have likewise retained certain of their religious, ethnic, and linguistic traits. <a href="#n21" name="f21">[21]</a></p>
<p>This identification of a class with a people (or race) is far from being exceptional in precapitalist societies. Social classes were then frequently distinguished by a more or less national or racial character. “The higher and lower classes ... are in many countries the lineal representatives of the peoples conquering and the peoples conquered of an anterior epoch .... The race of the invaders ... formed a military nobility ... the invaded race ... not living by the sword but by the compulsory labor of their hands ....” <a href="#n22" name="f22">[22]</a> Kautsky speaks in the same vein: “Different classes may assume the character of different races. On the other hand, the meeting of many races, each developing an occupation of its own, may lead to their taking up various callings or social positions within the same community: <em>race becomes class</em>.” <a href="#n23" name="f23">[23]</a> <a href="#n24" name="f24">[24]</a></p>
<p>There is evidently a continuous interdependence between racial or national and class characteristics. The social position of the Jews has had a profound, determining influence on their national character.</p>
<p>There is no contradiction in this idea of a people-class; and it is even easier to show the correspondence between class and religion. Whenever a class attains a certain degree of maturity and consciousness, its opposition to the ruling class takes on religious forms. The heresies of the Albigenses, the Lollards, the Manichaeans, the Cathari, and other innumerable sects that swarmed in medieval cities, were the initial religious manifestations of the growing opposition to the feudal order by the bourgeoisie and the people as a whole. These heresies nowhere reached the level of a dominant religion because of the relative weakness of the medieval bourgeoisie. They were savagely drowned in blood. It was only in the seventeenth century that the bourgeoisie, increasing in power, was able to bring about the triumph of Lutheranism and above all of Calvinism and its English equivalents. <a href="#n25" name="f25">[25]</a></p>
<p>Whereas Catholicism expresses the interests of the landed nobility and of the feudal order, while Calvinism (or Puritanism) represents those of the bourgeoisie or capitalism, Judaism mirrors the interests of a precapitalist mercantile class. <a href="#n26" name="f26">[26]</a> <a href="#n27" name="f27">[27]</a></p>
<p>What primarily distinguishes Jewish “capitalism” from genuine capitalism is that, by contrast with the latter, it is not the bearer of a new mode of production. “The merchant’s capital is pure, separated from the extremes, the spheres of production, between which it intervenes.” “The trading nations of the ancients existed like the gods of Epicurus in the intermediate worlds of the universe <em>or rather like the Jews in the pores of Polish society</em>.” “Both usury and commerce exploit the various modes of production. They do not create it, but attack it from the outside.” <a href="#n28" name="f28">[28]</a></p>
<p>The accumulation of money in the hands of the Jews did not arise from a special mode of production, from capitalist production. Surplus value (or surplus product) came from feudal exploitation and the lords were obliged to yield part of this surplus value to the Jews. Hence the antagonism between the Jews and feudalism, but hence likewise came the indestructible bond between them.</p>
<p>As for the lord, so too for the Jew, feudalism was mother earth. If the lord needed the Jew, the Jew also had need of the lord. It is by reason of this social position that the Jews were nowhere able to rise to the role of a ruling class. In feudal economy, the role of a merchant class could only be a clearly subordinate one. Judaism could only remain a more or less tolerated cult. <a href="#n29" name="f29">[29]</a></p>
<p>We have already seen that the Jews in antiquity had jurisdiction over their own community. The same was true in the Middle Ages. “In the plastic society of the Middle Ages, each class of men lived according to its own customs, and under its special jurisdiction. Outside the judicial organization of the state, the church had its ecclesiastical courts, the nobility its feudal courts, and the peasants their manorial courts. The burghers in their turn, obtained their <em>échevins</em>’ courts.” <a href="#n30" name="f30">[30]</a></p>
<p>The specific organization of the Jews was the <em>Kehillah</em>. Each cluster of Jews was organized into a community (Kehillah) which lived its own social life and had its own juridical organization. It was in Poland that this organization attained its highest degree of perfection. According to an ordinance issued by King Sigismund II in 1551, the Jews had the right to choose judges and rabbis whose duty it was to administer all their affairs. Only in actions between Jews and non-Jews did the Voyevoda courts intervene. Each Jewish community was free to choose a community council. The activities of this council, called <em>Kahal</em>, were very extensive. It collected taxes for the state, apportioned the general and special taxes, directed the elementary schools and high schools (<em>Yeshibot</em>). It had jurisdiction over all questions concerning trade, artisanry, charity. It took care of settling conflicts between members of the community. The power of each Kahal extended to the Jewish inhabitants of surrounding villages.</p>
<p>With time the various councils of Jewish communities made a practice of assembling regionally at regular intervals to discuss administrative, juridical, and religious questions. These assemblies thus assumed the aspect of miniature parliaments.</p>
<p>On the occasion of the great fair of Lublin, a sort of general parliament assembled in which the representatives of Great Poland, Little Poland, Podolia, and Volhynia participated. This parliament was called <em>Vaad Arba Aratzoth</em>, or the “Council of the Four Lands.”</p>
<p>Traditional Jewish historians have not failed to discern a form of national autonomy in this organization. “In old Poland,” says Dubnow, “the Jews constituted a nation having autonomy, with its own internal administration, courts and a certain juridical independence.” <a href="#n31" name="f31">[31]</a></p>
<p>Clearly, it is a gross anachronism to speak of national autonomy in the sixteenth century. This epoch knew nothing of the national question. In feudal society, only the classes had their special jurisdictions. Jewish autonomy is to be explained by the specific social and economic position of the Jews and not at all by their “nationality.”</p>
<p>Its linguistic evolution also reflects the specific social position of Judaism.</p>
<p>Hebrew disappeared very early as a living language. The Jews everywhere adopted the languages of the peoples among whom they lived. But this linguistic adaptation generally occurred in the form of a new dialect in which we again find some Hebraic expressions. There existed at various times in history Judo-Arabic, Judo-Persian, Judo-Provençal, Judo-Portuguese, Judo-Spanish, and other dialects, including, of course, Judo-German which has become present-day Yiddish. The dialect thus expresses the two contradictory tendencies which have characterized Jewish life; the tendency to integration in the surrounding society and the tendency to isolation, deriving from the socioeconomic situation of Judaism. <a href="#n32" name="f32">[32]</a> <a href="#n33" name="f33">[33]</a></p>
<p>It is only where the Jews cease constituting a special social group that they become completely assimilated in the surrounding society. “Assimilation is no new phenomenon in Jewish history,” states the Zionist sociologist Ruppin. <a href="#n34" name="f34">[34]</a></p>
<p>In reality, while Jewish history is the history of the preservation of Judaism, it is at the same time the history of the assimilation of large sections of Judaism. “In Northern Africa, in pre-Islamic times, great numbers of Jews were engaged in agriculture, but of these, too, the vast majority have been absorbed by the local population.” <a href="#n35" name="f35">[35]</a> This assimilation is explained by the fact that the Jews by turning agriculturists ceased to constitute a separate class. “Could they at all have taken to agriculture, they could hardly have done so without scattering through the country and its numerous villages, which, in spite of the difference in religion, would probably in a few generations have resulted in complete assimilation. Engaged in commerce and concentrated in towns, they formed agglomerations and developed a social life of their own, moving and marrying within their own community.” <a href="#n36" name="f36">[36]</a></p>
<p>Let us also recall the numerous conversions of Jewish landed proprietors in Germany in the fourth century; the complete disappearance of the Jewish warrior tribes of Arabia; the assimilation of the Jews in South America, in Surinam, etc. <a href="#n37" name="f37">[37]</a></p>
<p>The law of assimilation might be formulated as follows: Wherever the Jews cease to constitute a class, they lose, more or less rapidly, their ethnical, religious, and linguistic characteristics; they become assimilated. <a href="#n38" name="f38">[38]</a></p>
<p>It is very hard to trace Jewish history in Europe at several important periods, because the economic, social, and political conditions were so different in various countries. Whereas Poland and the Ukraine were completely feudal at the end of the eighteenth century, in Western Europe we witness an accelerated development of capitalism during this same period. It is easy to understand that the situation of the Jews in Poland bore far more resemblance to the situation of the French Jews in the Carolingian Era than to that of their coreligionists in Bordeaux or Paris. “The Portuguese Jew of Bordeaux and the German Jew of Metz are two absolutely different beings,” wrote a French Jew to Voltaire. The rich bourgeois Jews of France or Holland had virtually nothing in common with the Polish Jews who constituted a class in feudal society.</p>
<p>Despite the marked differences in conditions and in the tempo of economic development of the various European countries inhabited by the Jews, a careful study permits the delineation of the following main stages of their history:<br>
</p>
<h4>1. Precapitalist period</h4>
<p class="fst">This was also the period of the greatest prosperity of the Jews. Commercial and usurious “capital” found great possibilities for expansion in feudal society. The Jews were protected by the kings and princes, and their relations with other classes were in general good.</p>
<p>This situation lasted up to the eleventh century in Western Europe. The Carolingian epoch, the culminating point of feudal development, was also the apex of Jewish prosperity.</p>
<p>Feudal economy continued to dominate Eastern Europe till the end of the eighteenth century. And the center of Jewish life shifted more and more to that area.<br>
</p>
<h4>2. Period of medieval capitalism</h4>
<p class="fst">From the eleventh century on, Western Europe entered a period of intensive economic development. The first stage of this evolution was characterized by the creation of a corporative industry and a native merchant bourgeoisie. The penetration of mercantile economy into the agricultural domain determined the second stage.</p>
<p>The growth of cities and of a native merchant class brought with it the complete elimination of the Jews from commerce.</p>
<p>They became usurers whose principal clientele consisted of the nobility and the kings. But the mercantile transformation of agricultural economy resulted in undermining these positions as well.</p>
<p>The relative abundance of money enabled the nobility to throw off the yoke of the usurer. The Jews were driven from one country after another. Others became assimilated, being absorbed mainly by the native bourgeoisie.</p>
<p>In certain cities, principally in Germany and in Italy, the Jews became primarily loan-makers to the popular masses, the peasants, and the artisans. In this role as petty usurers exploiting the people, they were often the victims of bloody uprisings.</p>
<p>In general, the period of medieval capitalism was that of the most violent Jewish persecutions. Jewish “capital” came into conflict with all classes of society.</p>
<p>But the unevenness of economic development in the Western European countries operated to alter the forms of anti-Semitic struggles.</p>
<p>In one country, it was the nobility which directed the struggle against the Jews; in others, it was the bourgeoisie, and in Germany, it was the people who unleashed the movement.</p>
<p>Medieval capitalism was practically unknown in Eastern Europe. There was no separation between merchants capital and usurious capital. In contrast to Western Europe where “Jew” became synonymous with “usurer,” the Jews in Eastern Europe remained mainly traders and middlemen. Whereas the Jews were progressively eliminated from the countries of the West, they constantly strengthened their position in Eastern Europe. It was only in the nineteenth century that the development of capitalism (it is no longer corporative capitalism this time, but modern capitalism, which appears on the scene) began to undermine the prosperous condition of the Russian and Polish Jews. “The poverty of the Jews in Russia dates only from the abolition of serfdom and of the feudal regime in rural property. So long as the former and the latter existed, the Jews found wide possibilities for subsisting as merchants and middlemen.” <a href="#n39" name="f39">[39]</a><br>
</p>
<h4>3. Period of manufacture and industrial capitalism</h4>
<p class="fst">The capitalist period, properly speaking, began in the epoch of the Renaissance and manifested itself at first by a tremendous expansion of commerce and the growth of manufactures.</p>
<p>To the extent that the Jews survived in Western Europe – and only a few were left there – they took part in the development of capitalism. But the theory of Sombart, who attributes a decisive activity to them in the development of capitalism, belongs to the sphere of fantasy. Precisely because the Jews represented a primitive capitalism (mercantile and usurious), the development of modern capitalism could only prove fatal to their social position.</p>
<p>This fact does not at all exclude – far from it – the individual participation of the Jews in the creation of modern capitalism. But wherever the Jews were integrated into the capitalist class, there <em>they were likewise assimilated</em>. The Jew, as a great entrepreneur or shareholder of the Dutch or English India Company, was already on the threshold of baptism, a threshold, moreover, which he crossed with the greatest of ease. The progress of capitalism went hand in hand with the assimilation of the Jews in Western Europe.</p>
<p>If Judaism did not completely disappear in the West, it was owing to the mass influx of Jews from Eastern Europe. The Jewish question, which is now posed on a world scale, therefore results primarily from the situation of Eastern Judaism. This situation is, in turn, a product of the lag in economic development of this part of the world. The special causes of Jewish emigration are thus linked with the general causes behind the emigration movement of the nineteenth century.</p>
<p>The general emigration of the nineteenth century was caused in large measure by the failure of capitalist development to keep pace with the crumbling of feudal economy or manufacture economy. The ranks of the English peasants, evicted by the capitalization of rural economy, were swelled by the artisan or manufacturing workers displaced by machines. These peasant and artisan masses, eliminated by the new economic system, were driven to seek a livelihood across the ocean. But this situation was not indefinitely prolonged. Because of the rapid development of the productive forces in Western Europe, the section of the population deprived of its means of subsistence was presently able to find sufficient work in industry. That is the reason why, in Germany, for instance, emigration to America, which was very strong in the middle of the nineteenth century, dwindled almost completely toward the end of the century. The same applies to England and other countries of Western Europe. <a href="#n40" name="f40">[40]</a></p>
<p>While the disequilibrium between the crumbling of feudalism and the development of capitalism was disappearing in Western Europe, it was growing worse in the backward Eastern European countries. The destruction of feudal economy and primitive forms of capitalism proceeded there much more rapidly than the development of modern capitalism. Increasingly greater masses of peasants and artisans had to seek their road of salvation in emigration. At the beginning of the nineteenth century, it was principally the English, the Irish, the Germans, and the Scandinavians who formed the bulk of immigrants to America. The Slavic and Jewish element became dominant toward the end of the nineteenth century among the masses streaming to the New World.</p>
<p>At the beginning of the nineteenth century, the Jewish masses sought new roads of immigration. But at first it was toward the interior of Russia and Germany that they headed. The Jews succeeded in penetrating the great industrial and commercial centers where they played an important role as merchants and industrialists. Here we come upon a new and important fact: For the first time in centuries a Jewish proletariat was born. The people-class began to differentiate socially. The Jewish proletariat, however, remained concentrated mainly in the sector of consumer goods industry. It was primarily of the artisan type. In the same measure as large-scale industry expanded its field of exploitation, the artisan branches of economy declined. The workshop was superseded by the factory. And it thus turned out that the integration of Jews into capitalist economy still remained extremely precarious. It was not alone the “precapitalist” merchant who was forced to emigrate, but also the Jewish artisan worker. Jewish masses streamed in ever larger numbers from Eastern Europe to the West and to America. The solution of the Jewish question, that is to say, the complete absorption of the Jews into economic life, thus became a world problem.<br>
</p>
<h4>4. The decline of capitalism</h4>
<p class="fst">By socially differentiating Judaism, by integrating the latter into economic life, and by emigration, capitalism has laid the bases for the solution of the Jewish problem. But capitalism has failed to solve it. On the contrary, the fearsome crisis of the capitalist regime in the twentieth century has aggravated the plight of the Jews to an unparalleled degree. The Jews, driven from their economic positions under feudalism, could not be integrated into a capitalist economy in utter decay. In its convulsions, capitalism casts out even those Jewish elements which it has not yet completely assimilated.</p>
<p>Everywhere is rife the savage anti-Semitism of the middle classes, who are being choked to death under the weight of capitalist contradictions. Big capital exploits this elemental anti Semitism of the petty bourgeoisie in order to mobilize the masses around the banner of racism.</p>
<p>The Jews are being strangled between the jaws of two systems: feudalism and capitalism, each feeding the rottenness of the other.</p>
<h4>* * *</h4>
<h3>Notes</h3>
<p class="information"><a href="#f1" name="n1">1.</a> I. Bédarride, <strong>Les juifs en France, en Italie et en Espagne</strong> (Paris 1867), p. i.</p>
<p class="information"><a href="#f2" name="n2">2.</a> <strong>General Encyclopedia</strong> (Yiddish) (Paris 1936), vol. 3, pp. 454–55. Article of Ben-Adiron anti-Semitism.</p>
<p class="information"><a href="#f3" name="n3">3.</a> <em>On the Jewish Question</em>, <strong>Selected Essays by Karl Marx</strong> (New York 1926), p. 88.</p>
<p class="information"><a href="#f4" name="n4">4.</a> <strong>ibid.</strong>, p. 92.</p>
<p class="information"><a href="#f5" name="n5">5.</a> <strong>ibid.</strong>, p. 52.</p>
<p class="information"><a href="#f6" name="n6">6.</a> See Arthur Ruppin, <strong>The Jews in the Modern World</strong> (London 1934), p. 22.</p>
<p class="information"><a href="#f7" name="n7">7.</a> Flavius Josephus, <strong>Works</strong> (London 1844), p. 693.</p>
<p class="information"><a href="#f8" name="n8">8.</a> “In the first place we know of no hostile power which might have forced our people before the final destruction of Jerusalem to spread out through all of Asia Minor, the Mediterranean islands, Macedonia, and Greece.” Dr. L. Herzfeld, <strong>Handelsgeschichte der Juden des Alterthums</strong> (Braunschweig, 1879), pp. 202–3.</p>
<p class="information"><a href="#f9" name="n9">9.</a> Karl Kautsky in <strong>Neue Zeit</strong>.</p>
<p class="information"><a href="#f10" name="n10">10.</a> Adolphe Lods, <strong>Israel from Its Beginnings to the Middle of the Eighth Century</strong> (London 1932), p. 18.</p>
<p class="information"><a href="#f11" name="n11">11.</a> Lujo Brentano, <strong>Die Anfänge des Modernen Kapitalismus</strong> (Munich 1916), pp. 10, 15.</p>
<p class="information"><a href="#f12" name="n12">12.</a> Herzfeld, <strong>op. cit.</strong>, p. 203.</p>
<p class="information"><a href="#f13" name="n13">13</a>. Henri Pirenne, <strong>Mohammed and Charlemagne</strong> (New York [1939]), pp. 18–19.</p>
<p class="information"><a href="#f14" name="n14">14.</a> Theodor Mommsen, <strong>The Provinces of the Roman Empire</strong> (New York 1887), vol. 2, p. 179.</p>
<p class="information"><a href="#f15" name="n15">15.</a> Theodor Mommsen, <strong>The History of Rome</strong> (London 1911), vol. 4, p. 509.</p>
<p class="information">Sombart, in his work of such uneven value, <strong>The Jews and Modern Capitalism</strong> (London 1913), wherein the worst of absurdities are mixed with highly interesting researches, states: “I think that the Jewish religion has the same leading ideas as capitalism.” (p. 205) This affirmation is correct provided we understand by “capitalism,” – precapitalist trade and usury (As we shall see later <a href="ch4.htm">[chapter 4]</a>, it is false to attribute a preponderant role to the Jews in the building of modern capitalism.) In support of his thesis, Sombart cites many passages from the Talmud and other Jewish religious books which reflect this close connection between the Jewish religion and the commercial spirit. Here are, for example, several of these quotations: “He that loveth pleasure shall be a poor man, he that loveth wine and oil shall not be rich.” <strong>Proverbs</strong>, 2 1: 17. “Thou shalt lend unto many nations, but thou shalt not borrow.” <strong>Deuteronomy</strong>, 15:6. “The righteous therefore is prosperous here, and the wicked here suffers punishment.” “Rabbi Eleazar said: The righteous love their money more than their bodies.” <strong>Sota</strong> xiia. “And Rabbi Isaac also taught that a man always have his money in circulation.” <strong>Baba Mezia</strong>, 42a.</p>
<p class="information">It is naturally difficult to get a complete picture from a confused welter of texts, written and supplied with commentaries at different epochs and in different countries. The imprint of the commercial spirit is nevertheless clearly discernible in most of these writings. The work of Sombart is in this sense only an illustration of the Marxist thesis that religion is an ideological reflection of a social class. But by maintaining that it is religion which must have been the primary factor, Sombart, like other bourgeois scholars, strives to invert the causal relation.</p>
<p class="information"><a href="#f16" name="n16">16.</a> Henri Laurent, <em>Religion et affaires</em>, <strong>Cahiers du libre examen</strong>.</p>
<p class="information">Aristotle says in his <strong>Politics</strong> (Jowett translation, Oxford, 1885, vol. 1, p. 19): “The most hated sort [of moneymaking], and with the greatest reason, is usury which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term, usury which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of making money this is the most unnatural.” Further (p. 221), “citizens ... must not lead the life of mechanics or tradesmen, for such a life is ignoble and inimical to virtue.”</p>
<p class="information"><a href="#f17" name="n17">17.</a> Contrary to the opinion of some historians, ancient economy was, despite a fairly important development of commercial transactions, based essentially on the production of use values. “This system [of home or family economy] prevails not only in primitive societies but even in those of Antiquity .... Under this system ... each group suffices unto itself, consuming hardly anything but what it has itself produced, and producing almost nothing beyond what it will consume.” Charles Gide, <strong>Principles of Political Economy</strong> (Boston 1905), p. 132.</p>
<p class="information"><a href="#f18" name="n18">18.</a> Jean Juster, <strong>Les Juifs dans l’empire Romain</strong> (Paris 1914), vol. 1, p. 102.</p>
<p class="information"><a href="#f19" name="n19">19.</a> Laurent, <strong>op. cit.</strong>.</p>
<p class="information"><a href="#f20" name="n20">20.</a> “The peasant and the lord during the Middle Ages are not producers of merchandise ... It is true that they exchange their surpluses on occasion, but exchange is for them something fundamentally alien, an exception. Thus, neither the lord nor peasant generally possesses large sums of money. The greatest part of their wealth consists of use values, of wheat, cattle, etc. ... Circulation of merchandise, circulation of money-capital, and money economy in general are fundamentally alien to this form of society. Capital lives, according to the clear expression of Marx, in the pores of this society. It is into these pores that the Jew penetrated.” Otto Bauer, <strong>Die Nationalitätenfrage und die Sozialdemokratie</strong> (Vienna, 1907), p. 367.</p>
<p class="information"><a href="#f21" name="n21">21.</a> Pirenne explains the preservation of the national character by the Germans in the Slav countries as follows: “The principal explanation [of this preservation] is the fact that among the Slays they were the initiators and for long centuries <em>par excellence</em> the representatives of the urban life. The Germans introduced the bourgeoisie into the midst of these agricultural populations, and the contrast between them was, perhaps, from the very first, that of social classes rather than national groups.” Henri Pirenne, <strong>A History of Europe</strong> (London 1939), p. 328.</p>
<p class="information"><a href="#f22" name="n22">22.</a> Augustin Thierry, <strong>History of the Conquest of England by the Normans</strong> (London 1856), vol. 1, pp. xix–xx.</p>
<p class="information"><a href="#f23" name="n23">23.</a> Karl Kautsky, <strong>Are the Jews a Race?</strong> (New York 1926), p. 58. My emphasis. Inasmuch as the divisions between the various classes in precapitalist times are airtight, it often happens that national differences persist for a very long time. They manifest themselves particularly in language differences. The language of a conquered people used to be demoted to the role of a despised popular tongue, while the language of the conquerors became the language of “high society”. In England, the Norman aristocracy continued for many centuries to use French while the people spoke Saxon. It is from the fusion of these two languages that modern English was formed. In the long run, the language differences faded away. The Burgundians, the Franks, and other barbarians quickly started speaking the language of their subjects. On the other hand, the Arab conquerors imposed their own language on conquered peoples. These language differences between classes disappeared completely only with the advent of the bourgeoisie to power.</p>
<p class="information"><a href="#f24" name="n24">24.</a> “Some classes, the ruling, the peasant and the merchant classes, for instance, arose from the union of different ethnological elements ... their characteristic differences are original. Such classes antedate the state and are the more easily maintained in it because their differences are both anthropological and moral.” Ludwig Gumplowicz, <strong>The Outline of Sociology</strong> (Philadelphia 1899), p. 134.</p>
<p class="information"><a href="#f25" name="n25">25.</a> This scientific view has been perforce accepted for a long time by all serious historians.</p>
<p class="information"><a href="#f26" name="n26">26.</a> “... Jewish capitalism was speculative pariah-capitalism, while Puritan capitalism consisted in the organization of citizen labor.” Max Weber, <strong>General Economic History</strong> (New York 1927), p. 381.</p>
<p class="information"><a href="#f27" name="n27">27.</a> The correspondence between class and religion is, naturally, not absolute. All of the gentry were not Catholics, nor were all adherents of Calvinism bourgeois. But the classes do leave their imprint on religion. Thus, “revocation of the Edict of Nantes at the end of the seventeenth century exiled about 100,000 Protestants, almost all inhabitants of the cities and belonging to the industrial and commercial classes; for the Huguenot peasants, converted only in name, hardly left the kingdom.” Henri Sée, <strong>Economic and Social Conditions in France during the Eighteenth Century</strong> (New York 1927), p. 9.</p>
<p class="information"><a href="#f28" name="n28">28.</a> Karl Marx, <strong>Capital</strong>, Kerr Edition, vol. 3, p. 716.</p>
<p class="information"><a href="#f29" name="n29">29.</a> The sole known exception was a Mongol tribe, the Khazars, on the shores of the Caspian Sea, who adopted Judaism in the eighth century. Was there perchance a relation between the commercial function of this tribe and its conversion to Judaism?</p>
<p class="information"><a href="#f30" name="n30">30.</a> Henri Pirenne, <strong>Belgian Democracy</strong> (London 1915), p. 46.</p>
<p class="information"><a href="#f31" name="n31">31.</a> Lecture by Dubnow at a meeting of the Ethnographic Historical Society of St. Petersburg. [See also S.M. Dubnow, <strong>History of the Jews in Russia and Poland</strong> (Philadelphia 1916), vol. 1, p. 103. – <em>Tr.</em>]</p>
<p class="information"><a href="#f32" name="n32">32.</a> As early as the fifth century before Christ, the Jews of the Diaspora spoke Aramaic. Later, they mainly used Greek. “The inscriptions [in the Jewish cemeteries in Rome] are mainly in Greek, some written in an almost unintelligible jargon; some are in Latin, none in Hebrew.” Ludwig Friedlander, <strong>Roman Life and Manners under the Early Empire</strong> (London 1910), vol. 3, p. 178.</p>
<p class="information"><a href="#f33" name="n33">33.</a> It would be interesting to investigate why the Jews in the Slavic countries kept the German dialect (Yiddish) for so long a time.</p>
<p class="information"><a href="#f34" name="n34">34.</a> Ruppin, <strong>op. cit.</strong>, p. 271.</p>
<p class="information"><a href="#f35" name="n35">35.</a> Ruppin, <strong>op. cit.</strong>, p. 132.</p>
<p class="information"><a href="#f36" name="n36">36.</a> Ruppin, <strong>op. cit.</strong>, p. 132.</p>
<p class="information"><a href="#f37" name="n37">37.</a> In the epoch of the development of capitalism, from the sixteenth to the nineteenth century, assimilation in Western Europe generally meant penetration into the Christian capitalist class. The penetration of the Jews into the capitalist class may be compared to the “capitalization” of feudal properties. In the latter case, too, the struggle of the bourgeoisie against feudalism terminated in some cases with the total expropriation of the feudal class (as in France), and in other cases with the penetration of feudal elements into the capitalist class (as in England and Belgium). Capitalist development has had a similar effect upon the Jews. In some cases they were assimilated; in others they were eliminated.</p>
<p class="information"><a href="#f38" name="n38">38.</a> As a general rule the persecutions of the Jews were social in character. But the lag of ideology behind the social superstructure can account for certain <em>purely religious</em> persecutions. In some regions, the Jews were able to preserve their special religion for a fairly long time despite their transformation into agriculturists. In such cases, the persecutions were designed to <em>hasten</em> their conversion. What distinguishes <em>religious</em> persecutions from <em>social</em> persecutions (under a religious guise) is their less violent character and the feeble resistance of the Jews. Thus, it appears that in Visigoth Spain the Jews were in part agriculturists. Consequently, the Visigoth kings never thought of expelling them, as Ferdinand and Isabella did later. On the whole, purely religious persecutions must be considered as exceptional.</p>
<p class="information"><a href="#f39" name="n39">39.</a> Werner Sombart, <strong>L’Apogée du Capitalisme</strong> (Paris 1932), vol. 1, p. 430.</p>
<p class="information"><a href="#f40" name="n40">40.</a> “The economic progress of the principal European countries in the last quarter of the nineteenth century arrested the flow of emigration, but there soon began a second wave, comprising for the most part emigrants from the agrarian countries of Europe.” Vladimil Voitinski, <strong>Tatsachen und Zahlen Europas</strong> (Vienna 1930), p. 60.<br>
</p>
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</body> | Abram Leon
The Jewish Question
ONE
The premises for a scientific study of Jewish history
The scientific study of Jewish history is yet to transcend the stage of idealist improvisation. Serious historians have boldly attacked the field of history as a whole in the spirit of Marx, and have in large measure conquered it for the materialist outlook. Jewish history, however, still remains the chosen land of the “god-seekers” of every variety. It is one of the few fields of history where idealist prejudices have succeeded in entrenching and maintaining themselves to so great an extent.
How many oceans of ink have been spilled to celebrate the famous “miracle of the Jew!” “What a strange spectacle are these men who have, in order to preserve the sacred trust of their faith, braved persecutions and martyrdom,” exclaims Bédarride. [1]
The preservation of the Jews is explained by all historians as the product of their devotion through the centuries to their religion or their nationality. Differences among these historians begin to appear only when it comes to defining the “goal” for which the Jews preserved themselves, the reason for their resistance to assimilation. Some, taking the religious point of view, speak of the “sacred trust of their faith”; others, like Dubnow, defend the theory of “attachment to the national idea.” “We must seek the causes for the historical phenomenon of the preservation of the Jewish people in their national spiritual strength, in their ethical basis, and in the monotheistic principle,” says the General Encyclopedia which contrives in this way to reconcile the various viewpoints among the idealist historians. [2]
But while it is possible to reconcile these idealist theories with one another, it is hopeless to try to find some ground for reconciling these same theories with the elementary rules of historical science. The latter must categorically reject the fundamental error of all idealist schools, which consists of putting under the hallmark of free will the cardinal question of Jewish history, namely: the preservation of Judaism. Only a study of the economic role played by the Jews can contribute to elucidating the causes for the “miracle of the Jew.”
To study the evolution of this question is not exclusively of academic interest. Without a thorough study of Jewish history, it is difficult to understand the Jewish question in modern times. The plight of the Jews in the twentieth century is intimately bound up with their historical past. Every social formation represents a stage in the social process. Being is only a moment in the process of becoming. In order to undertake an analysis of the Jewish question in its present phase of development, it is indispensable to know its historical roots.
In the sphere of Jewish history, as in the sphere of universal history, Karl Marx’s brilliant thought points the road to follow “We will not look for the secret of the Jew in his religion, but we will look for the secret of the religion in the real Jew.” [3] Marx thus puts the Jewish question back on its feet. We must not start with religion in order to explain Jewish history; on the contrary; the preservation of the Jewish religion or nationality can be explained only by the “real Jew,” that is to say, by the Jew in his economic and social role. The preservation of the Jews contains nothing of the miraculous. “Judaism has survived not in spite of history, but by virtue of history.” [4]
It is precisely by studying the historical function of Judaism that one is able to discover the “secret of its survival in history. The struggles between Judaism and Christian society, under their respective religious guises, were in reality social struggles. “We transmute the contradictions of the state with a specific religion, like Judaism, into the the contradiction of the state with specific secular elements.” [5]
The general pattern of Jewish history is presented (with various slight nuances) somewhat as follows according to the reigning idealist school: Up to the destruction of Jerusalem, as late as the rebellion of Bar Kochba, the Jewish nation was in no wise different from other normally constituted nations, such as the Roman or the Greek. The wars between the Romans and the Jews resulted in dispersing the Jewish nation to the four corners of the world. In the dispersion, the Jews fiercely resisted national and religious assimilation. Christianity found no more rabid adversaries in its path and despite all its efforts did not succeed in converting them. The fall of the Roman empire increased the isolation of Judaism which constituted the sole heterodox element after the complete triumph of Christianity in the West.
The Jews of the Diaspora, in the epoch of the barbarian invasions, did not at all constitute a homogeneous social group. On the contrary agriculture, industry, commerce were widely prevalent among them. It was the continuous religious persecutions which forced them to entrench themselves increasingly in commerce and usury. The Crusades, by reason of the religious fanaticism they engendered, violently accelerated this evolution which transformed the Jews into usurers and ended in their confinement in ghettos. Of course, the hatred against the Jews was also fanned by the latter’s economic role. But the historians attribute only a secondary importance to this factor. This condition of Judaism continued up to the French Revolution, which destroyed the barriers that religious oppression had raised against the Jews.
Several important facts challenge the truth of this pattern:
1. The dispersal of the Jews does not at all date from the fall of Jerusalem. Several centuries before this event, the great majority of Jews were already spread over the four corners of the world. It is certain that well before the fall of Jerusalem, more than three-fourths of the Jews no longer lived in Palestine. [6]
For the great masses of Jews dispersed in the Greek empire, and later in the Roman empire, the Jewish kingdom of Palestine was of completely secondary importance. The tie with the “mother country” was manifested solely in religious pilgrimages to Jerusalem, which played a role similar to that of Mecca for the Moslems. Shortly before the fall of Jerusalem, King Agrippa said to the Jews: “There is no people upon the habitable earth which have not some portion of you among them.” [7]
The Diaspora was consequently not at all an accidental thing, a product of acts of violence. [8] The fundamental reason for Jewish emigration must be sought in the geographic conditions of Palestine. “The Jews in Palestine were the possessors of a mountainous country which at a certain time no longer sufficed for assuring its inhabitants as tolerable an existence as that among their neighbors. Such a people is driven to choose between brigandage and emigration. The Scots, for example, alternately engaged in each of these pursuits. The Jews, after numerous struggles with their neighbors, also took the second road ... Peoples living under such conditions do not go to foreign countries as agriculturists. They go there rather in the role of mercenaries, like the Arcadians of antiquity, the Swiss in the Middle Ages, the Albanians in our day; or in the role of merchants, like the Jews, the Scots, and the Armenians. We see here that a similar environment tends to produce similar characteristics among peoples of different races.” [9]
2. The overwhelming majority of Jews of the Diaspora unquestionably engaged in trade. Palestine itself since very remote times constituted a passageway for merchandise, a bridge between the valleys of the Euphrates and the Nile. “Syria was the inevitable highway of the conquerors ... Trade and ideas followed the same route. It is easy to see that from a very early date these regions were thickly populated, and possessed great cities whose very situation lent itself to commerce.” [10]
The geographic conditions of Palestine therefore explain both the Jewish emigration and its commercial character. On the other hand, among all nations, at the beginning of their development, the traders are foreigners. “The characteristic of a natural economy is that each sphere produces everything consumed by it and consumes everything it produces. There is consequently no pressure to buy goods or services from others ... Because what is produced is consumed in this economy, we find among all these peoples that the first traders are foreigners.” [11]
Philo enumerates many cities where the Jews were established as traders. He states that they “inhabited countless cities in Europe, in Asia, in Libya, on the mainland and in the islands, along the coasts and in the interior.” The Jews who inhabited the Hellenic islands, as well as the mainland and further to the west, had installed themselves there with commercial objectives. [12] “As well as the Syrians, the Jews were to be found in all the cities, living in small communities; they were sailors, brokers, bankers, whose influence was as essential in the economic life of the time as was the Oriental influence which made itself felt at the same time in the art and the religious thought of the period.” [13]
It is to their social position that the Jews are beholden for the wide autonomy granted them by the Roman emperors. The Jews, “and they only were allowed to form, so to speak, a community within the community and – while the other nonburgesses were ruled by the authorities of the burgess body – [they were permitted] up to a certain degree to govern themselves.” [14] Caesar advanced the interests of the Jews in Alexandria and in Rome by special favors and privileges, and protected in particular their peculiar worship against the Roman as well as against the Greek local priests. [15]
3. Hatred for the Jews does not date solely from the birth of Christianity. Seneca treated the Jews as a criminal race. Juvenal believed that the Jews existed only to cause evil for other peoples. Quintilian said that the Jews were a curse for other people.
The cause of ancient anti-Semitism is the same as for medieval anti-Semitism: the antagonism toward the merchant in every society based principally on the production of use values. “Medieval hostility toward merchants is not solely of Christian or pseudo-Christian inspiration. It also has a ‘real’ pagan source. The latter was strongly rooted in a class ideology; in the disdain which the leading classes of Roman society – the senatorial gentes as well as the provincial curia – felt, out of a deep peasant tradition, toward all forms of economic activity other than those deriving from agriculture.” [16]
However, while anti-Semitism was already strongly developed in Roman society the condition of the Jews, as we have seen, was quite enviable there. The hostility of classes that live from the land toward trade does not eliminate their dependence upon the latter. The landowner hates and despises the merchant but he cannot get along without him. [17]
The triumph of Christianity did not bring any notable changes in this regard. Christianity, at first the religion of the slaves and the downtrodden, was rapidly transformed into an ideology of the ruling class of landed proprietors. It was Constantine the Great who laid the foundation for medieval serfdom. The triumphal march of Christianity across Europe was accompanied by an extension of feudal economy. The religious orders played an extremely important role in the progress of civilization, which consisted in that epoch of developing agriculture on the basis of serfdom. There is little astonishing in the fact that “born in Judaism, formed at first exclusively of Jews, Christianity nevertheless nowhere during the first four centuries found more difficulty than among them in acquiring partisans for its doctrine.” [18] As a matter of fact, Christian mentality during the first ten centuries of our era viewed everything connected with economic life from the basic standpoint “that a merchant can with difficulty do work pleasing to God” and that “all trade implies a greater or lesser amount of cheating.” [19] The life of the Jews appeared completely incomprehensible to St. Ambrose who lived in the fourth century. He despised the wealth of the Jews profoundly, and firmly believed that they would be punished for it by eternal damnation.
The fierce hostility of the Jews toward Catholicism and their determination to preserve a religion which admirably expressed their social interests are therefore quite natural. It is not the loyalty of the Jews to their faith which explains their preservation as a distinct social group; on the contrary it is their preservation as a distinct social group which explains their attachment to their faith.
Nevertheless, like the hostility in antiquity toward the Jews, Christian anti-Semitism in the first ten centuries of the Christian era never went to the extreme of demanding the annihilation of Judaism. Whereas official Christianity mercilessly persecuted paganism and heresies, it tolerated the Jewish religion. The condition of the Jews continued to improve during the decline of the Roman empire, after the complete triumph of Christianity and up to the twelfth century. The more economic decay deepened, all the more did the commercial role of the Jews grow in importance. In the tenth century, they constituted the sole economic link between Europe and Asia.
4. It is only from the twelfth century on, parallel with the economic development of Western Europe, with the growth of cities and the formation of a native commercial and industrial class, that the condition of the Jews begins to worsen seriously, leading to their almost complete elimination from most of the Western countries. Persecutions of the Jews take on increasingly violent forms. As against this, in the backward countries of Eastern Europe, their condition continued to flourish up to a fairly recent period.
From these few preliminary considerations, we can see how false is the general conception prevailing in the sphere of Jewish history. Above all the Jews constitute historically a social group with a specific economic function. They are a class, or more precisely, a people-class. [20]
The concept of class does not at all contradict the concept of people. It is because the Jews have preserved themselves as a social class that they have likewise retained certain of their religious, ethnic, and linguistic traits. [21]
This identification of a class with a people (or race) is far from being exceptional in precapitalist societies. Social classes were then frequently distinguished by a more or less national or racial character. “The higher and lower classes ... are in many countries the lineal representatives of the peoples conquering and the peoples conquered of an anterior epoch .... The race of the invaders ... formed a military nobility ... the invaded race ... not living by the sword but by the compulsory labor of their hands ....” [22] Kautsky speaks in the same vein: “Different classes may assume the character of different races. On the other hand, the meeting of many races, each developing an occupation of its own, may lead to their taking up various callings or social positions within the same community: race becomes class.” [23] [24]
There is evidently a continuous interdependence between racial or national and class characteristics. The social position of the Jews has had a profound, determining influence on their national character.
There is no contradiction in this idea of a people-class; and it is even easier to show the correspondence between class and religion. Whenever a class attains a certain degree of maturity and consciousness, its opposition to the ruling class takes on religious forms. The heresies of the Albigenses, the Lollards, the Manichaeans, the Cathari, and other innumerable sects that swarmed in medieval cities, were the initial religious manifestations of the growing opposition to the feudal order by the bourgeoisie and the people as a whole. These heresies nowhere reached the level of a dominant religion because of the relative weakness of the medieval bourgeoisie. They were savagely drowned in blood. It was only in the seventeenth century that the bourgeoisie, increasing in power, was able to bring about the triumph of Lutheranism and above all of Calvinism and its English equivalents. [25]
Whereas Catholicism expresses the interests of the landed nobility and of the feudal order, while Calvinism (or Puritanism) represents those of the bourgeoisie or capitalism, Judaism mirrors the interests of a precapitalist mercantile class. [26] [27]
What primarily distinguishes Jewish “capitalism” from genuine capitalism is that, by contrast with the latter, it is not the bearer of a new mode of production. “The merchant’s capital is pure, separated from the extremes, the spheres of production, between which it intervenes.” “The trading nations of the ancients existed like the gods of Epicurus in the intermediate worlds of the universe or rather like the Jews in the pores of Polish society.” “Both usury and commerce exploit the various modes of production. They do not create it, but attack it from the outside.” [28]
The accumulation of money in the hands of the Jews did not arise from a special mode of production, from capitalist production. Surplus value (or surplus product) came from feudal exploitation and the lords were obliged to yield part of this surplus value to the Jews. Hence the antagonism between the Jews and feudalism, but hence likewise came the indestructible bond between them.
As for the lord, so too for the Jew, feudalism was mother earth. If the lord needed the Jew, the Jew also had need of the lord. It is by reason of this social position that the Jews were nowhere able to rise to the role of a ruling class. In feudal economy, the role of a merchant class could only be a clearly subordinate one. Judaism could only remain a more or less tolerated cult. [29]
We have already seen that the Jews in antiquity had jurisdiction over their own community. The same was true in the Middle Ages. “In the plastic society of the Middle Ages, each class of men lived according to its own customs, and under its special jurisdiction. Outside the judicial organization of the state, the church had its ecclesiastical courts, the nobility its feudal courts, and the peasants their manorial courts. The burghers in their turn, obtained their échevins’ courts.” [30]
The specific organization of the Jews was the Kehillah. Each cluster of Jews was organized into a community (Kehillah) which lived its own social life and had its own juridical organization. It was in Poland that this organization attained its highest degree of perfection. According to an ordinance issued by King Sigismund II in 1551, the Jews had the right to choose judges and rabbis whose duty it was to administer all their affairs. Only in actions between Jews and non-Jews did the Voyevoda courts intervene. Each Jewish community was free to choose a community council. The activities of this council, called Kahal, were very extensive. It collected taxes for the state, apportioned the general and special taxes, directed the elementary schools and high schools (Yeshibot). It had jurisdiction over all questions concerning trade, artisanry, charity. It took care of settling conflicts between members of the community. The power of each Kahal extended to the Jewish inhabitants of surrounding villages.
With time the various councils of Jewish communities made a practice of assembling regionally at regular intervals to discuss administrative, juridical, and religious questions. These assemblies thus assumed the aspect of miniature parliaments.
On the occasion of the great fair of Lublin, a sort of general parliament assembled in which the representatives of Great Poland, Little Poland, Podolia, and Volhynia participated. This parliament was called Vaad Arba Aratzoth, or the “Council of the Four Lands.”
Traditional Jewish historians have not failed to discern a form of national autonomy in this organization. “In old Poland,” says Dubnow, “the Jews constituted a nation having autonomy, with its own internal administration, courts and a certain juridical independence.” [31]
Clearly, it is a gross anachronism to speak of national autonomy in the sixteenth century. This epoch knew nothing of the national question. In feudal society, only the classes had their special jurisdictions. Jewish autonomy is to be explained by the specific social and economic position of the Jews and not at all by their “nationality.”
Its linguistic evolution also reflects the specific social position of Judaism.
Hebrew disappeared very early as a living language. The Jews everywhere adopted the languages of the peoples among whom they lived. But this linguistic adaptation generally occurred in the form of a new dialect in which we again find some Hebraic expressions. There existed at various times in history Judo-Arabic, Judo-Persian, Judo-Provençal, Judo-Portuguese, Judo-Spanish, and other dialects, including, of course, Judo-German which has become present-day Yiddish. The dialect thus expresses the two contradictory tendencies which have characterized Jewish life; the tendency to integration in the surrounding society and the tendency to isolation, deriving from the socioeconomic situation of Judaism. [32] [33]
It is only where the Jews cease constituting a special social group that they become completely assimilated in the surrounding society. “Assimilation is no new phenomenon in Jewish history,” states the Zionist sociologist Ruppin. [34]
In reality, while Jewish history is the history of the preservation of Judaism, it is at the same time the history of the assimilation of large sections of Judaism. “In Northern Africa, in pre-Islamic times, great numbers of Jews were engaged in agriculture, but of these, too, the vast majority have been absorbed by the local population.” [35] This assimilation is explained by the fact that the Jews by turning agriculturists ceased to constitute a separate class. “Could they at all have taken to agriculture, they could hardly have done so without scattering through the country and its numerous villages, which, in spite of the difference in religion, would probably in a few generations have resulted in complete assimilation. Engaged in commerce and concentrated in towns, they formed agglomerations and developed a social life of their own, moving and marrying within their own community.” [36]
Let us also recall the numerous conversions of Jewish landed proprietors in Germany in the fourth century; the complete disappearance of the Jewish warrior tribes of Arabia; the assimilation of the Jews in South America, in Surinam, etc. [37]
The law of assimilation might be formulated as follows: Wherever the Jews cease to constitute a class, they lose, more or less rapidly, their ethnical, religious, and linguistic characteristics; they become assimilated. [38]
It is very hard to trace Jewish history in Europe at several important periods, because the economic, social, and political conditions were so different in various countries. Whereas Poland and the Ukraine were completely feudal at the end of the eighteenth century, in Western Europe we witness an accelerated development of capitalism during this same period. It is easy to understand that the situation of the Jews in Poland bore far more resemblance to the situation of the French Jews in the Carolingian Era than to that of their coreligionists in Bordeaux or Paris. “The Portuguese Jew of Bordeaux and the German Jew of Metz are two absolutely different beings,” wrote a French Jew to Voltaire. The rich bourgeois Jews of France or Holland had virtually nothing in common with the Polish Jews who constituted a class in feudal society.
Despite the marked differences in conditions and in the tempo of economic development of the various European countries inhabited by the Jews, a careful study permits the delineation of the following main stages of their history:
1. Precapitalist period
This was also the period of the greatest prosperity of the Jews. Commercial and usurious “capital” found great possibilities for expansion in feudal society. The Jews were protected by the kings and princes, and their relations with other classes were in general good.
This situation lasted up to the eleventh century in Western Europe. The Carolingian epoch, the culminating point of feudal development, was also the apex of Jewish prosperity.
Feudal economy continued to dominate Eastern Europe till the end of the eighteenth century. And the center of Jewish life shifted more and more to that area.
2. Period of medieval capitalism
From the eleventh century on, Western Europe entered a period of intensive economic development. The first stage of this evolution was characterized by the creation of a corporative industry and a native merchant bourgeoisie. The penetration of mercantile economy into the agricultural domain determined the second stage.
The growth of cities and of a native merchant class brought with it the complete elimination of the Jews from commerce.
They became usurers whose principal clientele consisted of the nobility and the kings. But the mercantile transformation of agricultural economy resulted in undermining these positions as well.
The relative abundance of money enabled the nobility to throw off the yoke of the usurer. The Jews were driven from one country after another. Others became assimilated, being absorbed mainly by the native bourgeoisie.
In certain cities, principally in Germany and in Italy, the Jews became primarily loan-makers to the popular masses, the peasants, and the artisans. In this role as petty usurers exploiting the people, they were often the victims of bloody uprisings.
In general, the period of medieval capitalism was that of the most violent Jewish persecutions. Jewish “capital” came into conflict with all classes of society.
But the unevenness of economic development in the Western European countries operated to alter the forms of anti-Semitic struggles.
In one country, it was the nobility which directed the struggle against the Jews; in others, it was the bourgeoisie, and in Germany, it was the people who unleashed the movement.
Medieval capitalism was practically unknown in Eastern Europe. There was no separation between merchants capital and usurious capital. In contrast to Western Europe where “Jew” became synonymous with “usurer,” the Jews in Eastern Europe remained mainly traders and middlemen. Whereas the Jews were progressively eliminated from the countries of the West, they constantly strengthened their position in Eastern Europe. It was only in the nineteenth century that the development of capitalism (it is no longer corporative capitalism this time, but modern capitalism, which appears on the scene) began to undermine the prosperous condition of the Russian and Polish Jews. “The poverty of the Jews in Russia dates only from the abolition of serfdom and of the feudal regime in rural property. So long as the former and the latter existed, the Jews found wide possibilities for subsisting as merchants and middlemen.” [39]
3. Period of manufacture and industrial capitalism
The capitalist period, properly speaking, began in the epoch of the Renaissance and manifested itself at first by a tremendous expansion of commerce and the growth of manufactures.
To the extent that the Jews survived in Western Europe – and only a few were left there – they took part in the development of capitalism. But the theory of Sombart, who attributes a decisive activity to them in the development of capitalism, belongs to the sphere of fantasy. Precisely because the Jews represented a primitive capitalism (mercantile and usurious), the development of modern capitalism could only prove fatal to their social position.
This fact does not at all exclude – far from it – the individual participation of the Jews in the creation of modern capitalism. But wherever the Jews were integrated into the capitalist class, there they were likewise assimilated. The Jew, as a great entrepreneur or shareholder of the Dutch or English India Company, was already on the threshold of baptism, a threshold, moreover, which he crossed with the greatest of ease. The progress of capitalism went hand in hand with the assimilation of the Jews in Western Europe.
If Judaism did not completely disappear in the West, it was owing to the mass influx of Jews from Eastern Europe. The Jewish question, which is now posed on a world scale, therefore results primarily from the situation of Eastern Judaism. This situation is, in turn, a product of the lag in economic development of this part of the world. The special causes of Jewish emigration are thus linked with the general causes behind the emigration movement of the nineteenth century.
The general emigration of the nineteenth century was caused in large measure by the failure of capitalist development to keep pace with the crumbling of feudal economy or manufacture economy. The ranks of the English peasants, evicted by the capitalization of rural economy, were swelled by the artisan or manufacturing workers displaced by machines. These peasant and artisan masses, eliminated by the new economic system, were driven to seek a livelihood across the ocean. But this situation was not indefinitely prolonged. Because of the rapid development of the productive forces in Western Europe, the section of the population deprived of its means of subsistence was presently able to find sufficient work in industry. That is the reason why, in Germany, for instance, emigration to America, which was very strong in the middle of the nineteenth century, dwindled almost completely toward the end of the century. The same applies to England and other countries of Western Europe. [40]
While the disequilibrium between the crumbling of feudalism and the development of capitalism was disappearing in Western Europe, it was growing worse in the backward Eastern European countries. The destruction of feudal economy and primitive forms of capitalism proceeded there much more rapidly than the development of modern capitalism. Increasingly greater masses of peasants and artisans had to seek their road of salvation in emigration. At the beginning of the nineteenth century, it was principally the English, the Irish, the Germans, and the Scandinavians who formed the bulk of immigrants to America. The Slavic and Jewish element became dominant toward the end of the nineteenth century among the masses streaming to the New World.
At the beginning of the nineteenth century, the Jewish masses sought new roads of immigration. But at first it was toward the interior of Russia and Germany that they headed. The Jews succeeded in penetrating the great industrial and commercial centers where they played an important role as merchants and industrialists. Here we come upon a new and important fact: For the first time in centuries a Jewish proletariat was born. The people-class began to differentiate socially. The Jewish proletariat, however, remained concentrated mainly in the sector of consumer goods industry. It was primarily of the artisan type. In the same measure as large-scale industry expanded its field of exploitation, the artisan branches of economy declined. The workshop was superseded by the factory. And it thus turned out that the integration of Jews into capitalist economy still remained extremely precarious. It was not alone the “precapitalist” merchant who was forced to emigrate, but also the Jewish artisan worker. Jewish masses streamed in ever larger numbers from Eastern Europe to the West and to America. The solution of the Jewish question, that is to say, the complete absorption of the Jews into economic life, thus became a world problem.
4. The decline of capitalism
By socially differentiating Judaism, by integrating the latter into economic life, and by emigration, capitalism has laid the bases for the solution of the Jewish problem. But capitalism has failed to solve it. On the contrary, the fearsome crisis of the capitalist regime in the twentieth century has aggravated the plight of the Jews to an unparalleled degree. The Jews, driven from their economic positions under feudalism, could not be integrated into a capitalist economy in utter decay. In its convulsions, capitalism casts out even those Jewish elements which it has not yet completely assimilated.
Everywhere is rife the savage anti-Semitism of the middle classes, who are being choked to death under the weight of capitalist contradictions. Big capital exploits this elemental anti Semitism of the petty bourgeoisie in order to mobilize the masses around the banner of racism.
The Jews are being strangled between the jaws of two systems: feudalism and capitalism, each feeding the rottenness of the other.
* * *
Notes
1. I. Bédarride, Les juifs en France, en Italie et en Espagne (Paris 1867), p. i.
2. General Encyclopedia (Yiddish) (Paris 1936), vol. 3, pp. 454–55. Article of Ben-Adiron anti-Semitism.
3. On the Jewish Question, Selected Essays by Karl Marx (New York 1926), p. 88.
4. ibid., p. 92.
5. ibid., p. 52.
6. See Arthur Ruppin, The Jews in the Modern World (London 1934), p. 22.
7. Flavius Josephus, Works (London 1844), p. 693.
8. “In the first place we know of no hostile power which might have forced our people before the final destruction of Jerusalem to spread out through all of Asia Minor, the Mediterranean islands, Macedonia, and Greece.” Dr. L. Herzfeld, Handelsgeschichte der Juden des Alterthums (Braunschweig, 1879), pp. 202–3.
9. Karl Kautsky in Neue Zeit.
10. Adolphe Lods, Israel from Its Beginnings to the Middle of the Eighth Century (London 1932), p. 18.
11. Lujo Brentano, Die Anfänge des Modernen Kapitalismus (Munich 1916), pp. 10, 15.
12. Herzfeld, op. cit., p. 203.
13. Henri Pirenne, Mohammed and Charlemagne (New York [1939]), pp. 18–19.
14. Theodor Mommsen, The Provinces of the Roman Empire (New York 1887), vol. 2, p. 179.
15. Theodor Mommsen, The History of Rome (London 1911), vol. 4, p. 509.
Sombart, in his work of such uneven value, The Jews and Modern Capitalism (London 1913), wherein the worst of absurdities are mixed with highly interesting researches, states: “I think that the Jewish religion has the same leading ideas as capitalism.” (p. 205) This affirmation is correct provided we understand by “capitalism,” – precapitalist trade and usury (As we shall see later [chapter 4], it is false to attribute a preponderant role to the Jews in the building of modern capitalism.) In support of his thesis, Sombart cites many passages from the Talmud and other Jewish religious books which reflect this close connection between the Jewish religion and the commercial spirit. Here are, for example, several of these quotations: “He that loveth pleasure shall be a poor man, he that loveth wine and oil shall not be rich.” Proverbs, 2 1: 17. “Thou shalt lend unto many nations, but thou shalt not borrow.” Deuteronomy, 15:6. “The righteous therefore is prosperous here, and the wicked here suffers punishment.” “Rabbi Eleazar said: The righteous love their money more than their bodies.” Sota xiia. “And Rabbi Isaac also taught that a man always have his money in circulation.” Baba Mezia, 42a.
It is naturally difficult to get a complete picture from a confused welter of texts, written and supplied with commentaries at different epochs and in different countries. The imprint of the commercial spirit is nevertheless clearly discernible in most of these writings. The work of Sombart is in this sense only an illustration of the Marxist thesis that religion is an ideological reflection of a social class. But by maintaining that it is religion which must have been the primary factor, Sombart, like other bourgeois scholars, strives to invert the causal relation.
16. Henri Laurent, Religion et affaires, Cahiers du libre examen.
Aristotle says in his Politics (Jowett translation, Oxford, 1885, vol. 1, p. 19): “The most hated sort [of moneymaking], and with the greatest reason, is usury which makes a gain out of money itself, and not from the natural use of it. For money was intended to be used in exchange, but not to increase at interest. And this term, usury which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of making money this is the most unnatural.” Further (p. 221), “citizens ... must not lead the life of mechanics or tradesmen, for such a life is ignoble and inimical to virtue.”
17. Contrary to the opinion of some historians, ancient economy was, despite a fairly important development of commercial transactions, based essentially on the production of use values. “This system [of home or family economy] prevails not only in primitive societies but even in those of Antiquity .... Under this system ... each group suffices unto itself, consuming hardly anything but what it has itself produced, and producing almost nothing beyond what it will consume.” Charles Gide, Principles of Political Economy (Boston 1905), p. 132.
18. Jean Juster, Les Juifs dans l’empire Romain (Paris 1914), vol. 1, p. 102.
19. Laurent, op. cit..
20. “The peasant and the lord during the Middle Ages are not producers of merchandise ... It is true that they exchange their surpluses on occasion, but exchange is for them something fundamentally alien, an exception. Thus, neither the lord nor peasant generally possesses large sums of money. The greatest part of their wealth consists of use values, of wheat, cattle, etc. ... Circulation of merchandise, circulation of money-capital, and money economy in general are fundamentally alien to this form of society. Capital lives, according to the clear expression of Marx, in the pores of this society. It is into these pores that the Jew penetrated.” Otto Bauer, Die Nationalitätenfrage und die Sozialdemokratie (Vienna, 1907), p. 367.
21. Pirenne explains the preservation of the national character by the Germans in the Slav countries as follows: “The principal explanation [of this preservation] is the fact that among the Slays they were the initiators and for long centuries par excellence the representatives of the urban life. The Germans introduced the bourgeoisie into the midst of these agricultural populations, and the contrast between them was, perhaps, from the very first, that of social classes rather than national groups.” Henri Pirenne, A History of Europe (London 1939), p. 328.
22. Augustin Thierry, History of the Conquest of England by the Normans (London 1856), vol. 1, pp. xix–xx.
23. Karl Kautsky, Are the Jews a Race? (New York 1926), p. 58. My emphasis. Inasmuch as the divisions between the various classes in precapitalist times are airtight, it often happens that national differences persist for a very long time. They manifest themselves particularly in language differences. The language of a conquered people used to be demoted to the role of a despised popular tongue, while the language of the conquerors became the language of “high society”. In England, the Norman aristocracy continued for many centuries to use French while the people spoke Saxon. It is from the fusion of these two languages that modern English was formed. In the long run, the language differences faded away. The Burgundians, the Franks, and other barbarians quickly started speaking the language of their subjects. On the other hand, the Arab conquerors imposed their own language on conquered peoples. These language differences between classes disappeared completely only with the advent of the bourgeoisie to power.
24. “Some classes, the ruling, the peasant and the merchant classes, for instance, arose from the union of different ethnological elements ... their characteristic differences are original. Such classes antedate the state and are the more easily maintained in it because their differences are both anthropological and moral.” Ludwig Gumplowicz, The Outline of Sociology (Philadelphia 1899), p. 134.
25. This scientific view has been perforce accepted for a long time by all serious historians.
26. “... Jewish capitalism was speculative pariah-capitalism, while Puritan capitalism consisted in the organization of citizen labor.” Max Weber, General Economic History (New York 1927), p. 381.
27. The correspondence between class and religion is, naturally, not absolute. All of the gentry were not Catholics, nor were all adherents of Calvinism bourgeois. But the classes do leave their imprint on religion. Thus, “revocation of the Edict of Nantes at the end of the seventeenth century exiled about 100,000 Protestants, almost all inhabitants of the cities and belonging to the industrial and commercial classes; for the Huguenot peasants, converted only in name, hardly left the kingdom.” Henri Sée, Economic and Social Conditions in France during the Eighteenth Century (New York 1927), p. 9.
28. Karl Marx, Capital, Kerr Edition, vol. 3, p. 716.
29. The sole known exception was a Mongol tribe, the Khazars, on the shores of the Caspian Sea, who adopted Judaism in the eighth century. Was there perchance a relation between the commercial function of this tribe and its conversion to Judaism?
30. Henri Pirenne, Belgian Democracy (London 1915), p. 46.
31. Lecture by Dubnow at a meeting of the Ethnographic Historical Society of St. Petersburg. [See also S.M. Dubnow, History of the Jews in Russia and Poland (Philadelphia 1916), vol. 1, p. 103. – Tr.]
32. As early as the fifth century before Christ, the Jews of the Diaspora spoke Aramaic. Later, they mainly used Greek. “The inscriptions [in the Jewish cemeteries in Rome] are mainly in Greek, some written in an almost unintelligible jargon; some are in Latin, none in Hebrew.” Ludwig Friedlander, Roman Life and Manners under the Early Empire (London 1910), vol. 3, p. 178.
33. It would be interesting to investigate why the Jews in the Slavic countries kept the German dialect (Yiddish) for so long a time.
34. Ruppin, op. cit., p. 271.
35. Ruppin, op. cit., p. 132.
36. Ruppin, op. cit., p. 132.
37. In the epoch of the development of capitalism, from the sixteenth to the nineteenth century, assimilation in Western Europe generally meant penetration into the Christian capitalist class. The penetration of the Jews into the capitalist class may be compared to the “capitalization” of feudal properties. In the latter case, too, the struggle of the bourgeoisie against feudalism terminated in some cases with the total expropriation of the feudal class (as in France), and in other cases with the penetration of feudal elements into the capitalist class (as in England and Belgium). Capitalist development has had a similar effect upon the Jews. In some cases they were assimilated; in others they were eliminated.
38. As a general rule the persecutions of the Jews were social in character. But the lag of ideology behind the social superstructure can account for certain purely religious persecutions. In some regions, the Jews were able to preserve their special religion for a fairly long time despite their transformation into agriculturists. In such cases, the persecutions were designed to hasten their conversion. What distinguishes religious persecutions from social persecutions (under a religious guise) is their less violent character and the feeble resistance of the Jews. Thus, it appears that in Visigoth Spain the Jews were in part agriculturists. Consequently, the Visigoth kings never thought of expelling them, as Ferdinand and Isabella did later. On the whole, purely religious persecutions must be considered as exceptional.
39. Werner Sombart, L’Apogée du Capitalisme (Paris 1932), vol. 1, p. 430.
40. “The economic progress of the principal European countries in the last quarter of the nineteenth century arrested the flow of emigration, but there soon began a second wave, comprising for the most part emigrants from the agrarian countries of Europe.” Vladimil Voitinski, Tatsachen und Zahlen Europas (Vienna 1930), p. 60.
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